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:
Good morning. Welcome to the program. It is not the first Wednesday of the month, but we are going live and we are going to the bottom of the hour with Dave Nelson. Good morning, Dave.

David Nelson:
Good morning, Gary. Happy to be here today.

Gary Determan:
Yeah, I’m glad to have you aboard. And again, someday we’re going to get you back in the studio, right?

David Nelson:
Yeah. I look forward to that as well.

Gary Determan:
Okay. How are things going at the office?

David Nelson:
Yeah, they’re going great. I mean, relative to what’s taken place, we’re having a few folks come in. Most folks we’re still visiting over the phone, it’s working out, but yeah, it’s a trying time for so many people and, again, so many jobs, part of the discussion today that I want to talk about is the stimulus packages that are being negotiated. And again, our line of work we’ve been certainly affected. Our lives have gotten much busier and much more difficult trying to navigate through what’s taking place.

David Nelson:
In the olden days, it used to be just navigating the markets. Now you’ve got to try to interpret as far as what the potential cures and the medicines, the impact that they’re going to have and what that will mean positively or negatively as far as to the markets. So, yeah, it’s been a challenge, but compared to many people out there that find themselves sitting at home not wanting to be at home because of the layoffs, what have you, this is a really tough time for many, many individuals.

Gary Determan:
You know, Dave, not to stray off where you wanted to go, but you mentioned about the chemical, the medicines. What about putting your money into those right now?

David Nelson:
Yeah, so the challenge always, I used to have, and I don’t know why I still remember this, but I guess it was that significant that we had enough people that came in. They’d walk in with a magazine called Money Magazine back in the day, the publication doesn’t even exist today. And they would put it in front of me and say, “This publication says that I should buy this. This was X, Y, Z mutual fund, X, Y, Z stock.” And then I had to as nicely and delicately as I could try to explain to them that they, I think, perceived themselves and had a belief that maybe they had a little inside track as far as to make some good money and quick money, what have you.

David Nelson:
So then I have to go through, and again, unwind this thing and part of the unwinding that I had to do to not try to say, “You shouldn’t be doing this,” just abruptly, to say, “You know the person that wrote that article, that’s the editor of that publication, tell me what their prior job was. They’re giving you advice as far as money, what was their prior job?” To their amazement, what I would tell them the writer that puts together that particular piece, their prior job was at Popular Mechanic. Yep. I said, popular mechanics, and now they’re writing to tell people how they should handle their money.

David Nelson:
So that’s number one. Number two, that publication went out to hundreds of thousands of people, so to think you had the upper hand, what’s that have to do with your question about, should people be investing in that stuff right now? Any of them that have legitimate potential as far as working, the stock price has already been inflated in a massive way.

David Nelson:
Just to give you an idea, there’s a product out there that we’re a fan of and we’ve owned for quite some time, as far as for our clients. Unfortunately, we don’t have every penny into this thing, but literally they’re trying to break through all the data and try to pick the winners and trying to avoid the losers. That particular product is up over 100% year to date, like 109%, 110%, I think as the market opens this morning.

David Nelson:
So the point being, most, not most, almost all of the good news and probably more has already been priced into most of those stocks. So again, should people then throw up their arms and say, “There’s nothing that I can do?” I didn’t say that either. I’m just saying that many of those obvious opportunities are gone. And what we have to do is to have the courage to buy stuff that hasn’t had the run and in that space, buying into, say, a diversified mutual fund that invests in healthcare or a diversified ETF, exchange traded fund, which are kind of similar in theory would probably be a better approach as far as for most individuals listening.

Gary Determan:
Okay. Very good. Well, thank you. Thank you on that. So, popular mechanics to Money Magazine.

David Nelson:
Isn’t that wild?

Gary Determan:
Yeah.

David Nelson:
I never would have believed it had I not looked it up and I just… It’s a rare day, Gary and I say this with all sincerity. I’m good at what I do, that isn’t bragging, but it’s just the reality, it’s a fact. But as far as constructing and putting together something in writing that maybe a publication, there is no way I could do it on my own. I got to lean on the experts.

David Nelson:
So to find somebody that understands money and how to invest, how to focus on taxes, what does this do as far as my estate plan is concerned, et cetera, et cetera? To know all that and be a good writer, I don’t think that person exists. So the point being, this coming from Popular Mechanics, that person got the job, not because of their money intellect, they got it because they were a good writer. And so, the publication no longer exists, I’m not saying it’s because of that, but certainly that had to contribute to it. And you can only throw out there periodically at individuals as far as, “Buy this today.” The headlines always used to be, “Buy these six mutual funds today. Buy these 10 stocks.” Every month, it was something different. And again, if you follow that advice, I just question whether you made a penny or not. You probably lost your share is basically what it boils down to.

Gary Determan:
I’m visiting with Dave Nelson and we’re going to go to the bottom of the hour. Dave, I know you make a lot of travel plans. How has this affected you?

David Nelson:
Yeah. In a big, big way. The game plan, we’ve got clients in over 40 states and the agreements that we have with them is that they come our direction every other year and we go there every other year. We’ve got a branch office [inaudible 00:07:12] in Honolulu. We’ve got a branch office north of Chicago. I haven’t been to either one of those locations in probably now I would say a year. So certainly the six months, the nine months, whatever it’s been as far as in this crisis, seems like five years. But anyway, six, seven, eight months, whatever it’s been, again, that clearly you couldn’t go there and don’t want to go there and get on the plane, what have you, and as far as the Chicago trip is concerned, it’s just opening ourself up for potential health issues, them as well as us.

David Nelson:
So yeah, it’s significant and I feel bad. I mean, every client understands, they don’t want to come here and clearly, I don’t want to go to many of those places. Not that they’re bad places, it’s just you’re increasing your odds of having issues. So yeah. Stay at home and try to do the best you can and again, just communicate with people as far as being the phone has been very useful. We’ve done a ton of Zoom calls. For those that don’t know what that is, it’s just kind of like a video teleconference where you’re getting on and chatting with folks. And it’s not the same as sitting across from them, having a cup of coffee or a water as far as together, and not only just talking business, but just getting updates as far as how they’re doing. I miss that a lot. And hopefully within six months, that’s a reality as far as that that can take place.

Gary Determan:
Yeah. That would be great. Setting up appointments, how do you do that now with the Zoom meetings and things along those lines?

David Nelson:
Good talented people, one Val Hill as far as that used to be working with you folks up there. She just does a terrific job. The technology that exists today, I mean, again we’re supporting ballpark-ish between the quad cities, Clinton and the Dubuque offices, roughly 1,500 clients. And I think we’re north of 24 people as far as that work in this area, as far as our offices here in the Midwest between the tax office and as far as the wealth management office. But yeah, coordinating is a big, big part of the job. And Val and Michelle have done a terrific job as far as trying to make that stuff happen. And I mean, literally, I would say in a normal day around here, there’s probably eight to 10 of those calls that take place between myself and other advisors as far as communicating with clients.

Gary Determan:
I know I go down there periodically, everybody’s got their mask on, you guys are doing your best at the office at NelsonCorp here in Clinton. We’re going to be taking a break for the weather here. What are we going to be talking about in the second half of the program today, Dave?

David Nelson:
Well, what I want to get into, and I’ve got two items, one is talking about markets as far as a concept called a Breadth Thrust, and it’s basically fired, which is a fancy way of saying there’s been tremendous upside volume compared to downside volume here relatively recently. So almost always that’s really good news. The other is just the stimulus discussion. I talked a lot about that in various mediums. The good news to that, the bad news to that, and the different viewpoint, I guess is probably as much as anything. Should we add more stimulus to it? Or shouldn’t we? So I think we can hit those in the remaining minutes as far as on the program.

Gary Determan:
All right. Very good. Let’s take that break for the weather now, presented by Frary Lumber.

Eric Sorensen:
Going to be with you here on a Wednesday. This is going to be the warmest that we have here planned for you, but also the windiest. We could have some wind gusts up to 45 miles per hour today, and that means a very high fire danger. So be very careful outside today. We don’t want to put our firefighters in harm’s way. A windy, very warm otherwise, a good deal of sunshine. 78. Tonight down to 5, a quiet front comes through, still breezy though. And then maybe a shower or two on Thursday with a abrupt high temperature, 55 tomorrow. Weather conditions all the time, wqad.com. I’m StormTrack 8 meteorologist, Eric Sorenson.

Speaker 5:
Thanks so much, Eric. Right now, generally overcast. We see some cloud cover out there. Current temperature, 52 degrees. Right now, the winds are out of the southeast. Currently on average about 15 miles per hour. Our update brought to you by Frary Lumber.

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Gary Determan:
Financial focus, continuing to the bottom of the hour, of course presented by NelsonCorp Wealth Management. We’re on the line with Dave Nelson. So Dave, let’s get started here in the second half.

David Nelson:
Sure. So I think the topic that certainly is of interest to a lot of folks out there, and I don’t know if you, Gary, I imagine you are just like probably most people out there, sick and tired of politics and politicians, I should probably say. The battles that have basically taken place and we’re dealing with people’s day-to-day life and the impact that it’s having, the negative impact that it’s having on so many people out there as far as with this COVID. Whilst nobody’s fault, and yet it’s really having a negative impact on so many people.

David Nelson:
So we’ve done stimulus and as I’ve been very vocal as far as in any medium said that we were quick and it was big, as far as day one. So the federal reserve intervened first, and then we had the politicians get into the game. And we’ve had trillions of dollars that have been pumped into the system. Now, there’s some that question as far as what we’ve already done, that it went to the right organization. You have many large corporations that got large sums of money and was that right? And you look at the airlines and say, “I mean, are they going to make it without subsidies?” I know that there are targets that both sides like the pick on.

David Nelson:
“Oh no, they mismanagement, they should be able to make it on their own.” Well, you go from how many flights they had one day to the next, I mean, just look up in the sky someday and see how many planes you see flying today, in comparison to what we saw, say, a year or so ago. It’s just stunning. Again, I’m not taking sides here, I’m just trying to give the argument of both sides, but does it make sense? So that’s one example. And if you own a hotel, you’re cooked. I talked to a gentleman yesterday that’s in the racing business and he threw in the towel. If you’re in the racing business, you’re cooked.

David Nelson:
So anyway, there’s just a lot of still bad stuff. Average people that are finding themselves not working today because of what’s taken place. So Washington is battling over, “Should we do more stimulus?” And I think both sides have agreed that we should. Now the question is size and then who gets the money? And that’s what we’re trying to sort through and that has just been a football being tossed back and forth at each other. And again, we’re getting nowhere. So the argument for more money being pumped into the system pretty much centers around that theory is it’ll be cheaper in the long run and it’ll also start generating more tax revenue quicker. That’s the main part of the argument to do it.

David Nelson:
Now, if I’m on the other side of it, they’re arguing that, no, there’s a lot of companies out there that are wobbling already, were wobbling before the crisis. And if we give them money, it’s just going to extend that and they’re eventually going to go out of business anyway. So why would we throw good money at a bad problem? Now, to follow up a little bit further as far as on that issue, we have the most for the third quarter, I want to make this real clear. The third quarter, going way back through the entire history of the United States, there has been more bankruptcy in the third quarter than we’ve ever seen in the third quarter. And that’s a pretty stunning statistic.

David Nelson:
Now, if you go back and you look at the financial crisis, ’07, ’08, ’09, 2007, 2008, 2009, and if you look at that, the peak of the crisis then was March 9th of ’09. The market bottomed that day, that bankruptcies peak during that quarter and the market took off from there. Now, the bankruptcy levels were still elevated into 2010, but they were significantly lower. So the hope with the argument for more stimulus is that we peaked this quarter and it’s probably, hopefully going to be the peak and we want it to be the peak and the way to pretty much ensure that it’s going to be the peak is to do more stimulus. That’s what’s being discussed in a big, big way right now in Washington. And again, time will tell. Bankruptcies aren’t going to end, there’s companies that are wobbling, that’s going to continue. But again, the hope is that the peak of all of the bankruptcies during this particular cycle will be done and behind us and we can move forward.

Gary Determan:
It’s very interesting as you pointed out there, pluses, minuses on both sides of this argument.

David Nelson:
There are. And again, it’s turned into just one of these issues as far as the Democrats and Republicans acting like a bunch of babies. And I’m tired of sugarcoating stuff and trying to make excuses for both sides. Just I’m stunned with the number of people that I talk to that close their eyes to, their side can’t do anything wrong. And I mean, we’ve got a lot of people that are really making some really bad decisions for the country. And the end result is that it’s all about protecting their turf. In other words, their party. And I think that’s just crazy. I told people for years, I’m even telling more, I think we need more independence in this world and the idea that I’m going to vote for my party just because is, in my opinion, ridiculous.

David Nelson:
What we should do is we should evaluate the human being that wants that position and evaluate that human being on an ongoing basis to determine, are they doing the best they can for the country? Not necessarily for my pocket book, but for the country? Because we are digging a massive hole, as far as from an economic standpoint, printing money day after day after day. And at some point, this becomes a problem, probably not for our generation, Gary, but it’s clearly going to be a massive problem for the next generation.

David Nelson:
And again, just to turn our head to it is crazy. And again, the verbiage that comes out of people’s mouth sometimes, I got to challenge them on it and just say, “So-and-so and so-and-so,” I said, “we put him there. Okay? We voted him in. Stop pointing the finger at these people. We put him there.: So we’ve got to look at that and we’ve got to make a determination, are we comfortable with what they’re doing? If they’re not, then we get them out of there and we keep searching for people that are going to look out for the good of all, not just their own party.

Gary Determan:
Again, visiting with Dave Nelson of NelsonCorp Wealth Management. Got about six minutes left in the program, Dave. The next time we visit will be on Wednesday, November 4th. And of course, election day will be over. May not know who wins with the write ins and different things, not the write ins, but the mail-in balloting. So what do you think November 4th might bring?

David Nelson:
Yeah. Well, if we look at, and we believe the markets, which more often than not are right, what it appears to be saying today, again this is just today, this can change in a week, it can change in two weeks. I mean, big events have taken place prior to elections and flipped the side, but what the markets are basically saying today is there won’t be a contested election, that the gap has opened up and it’s significant enough and the market has now rallied, and it has been rallying the last two weeks, basically saying that it’s going to be a new president and it’s going to be an uncontested, because there’s a big enough gap as far as between the two.

David Nelson:
That’s not me saying that. That’s the interpretation of the market as far as what’s taken place out there. I don’t have the foggiest idea. Again, what I’m hoping for is that we can get back to working together. Again, I sound like I’m 95 years old when I make comments like this, but I remember a day where we could talk and communicate and not despise the other side just because. And that’s what it is today. Again, people can say otherwise. Look at the facts. The facts are that both sides are heavily entrenched and will not give in any way and the end result is we’re moving nowhere fast.

David Nelson:
When you’re not moving forward, you’re really moving backwards and that’s what’s taking place today. And so, we’ve got to have leadership from, not just the White House, but we’ve got to have leadership from the House and the Senate as well. And again, I talked to people so many times, they bring up as far as change in term limits and whatever. I’m not smart enough to know what the answer is, but what I do know is what I see today is just appalling. And it has been for quite some time, it’s not just the last 10 minutes.

David Nelson:
But I’m hopeful, Gary. I really am. And I think that we as Americans, we’re the envy of the world and have been and continue to be, yeah, we have a little lull here, but we’re going to get through this thing and there’s going to be some good days ahead. The market has told us just the last two weeks there’s been, I hinted at earlier what’s called a Breadth Thrust and a Breadth Thrust is just, again, a term used in our industry that’s implying that you have pretty good volume on the upside and you have very little volume on the downside. When you get those, and you don’t get those very often, that generally is a very good indication as far as going forward, that things probably are going to be better as far as stock market returns. Not individually, we’re just generically looking at the market.

David Nelson:
Now, again, I’m not making that prediction. I’m just saying we had some short term Breadth Thrusts that kicked in several months back. We’ve had a really nice rally since. We’ve had the long term Breadth Thrust kick in, which is also very good news. And generally speaking, months out, you’re higher than you were as far as today. Not saying that’s going to happen, I want to make that clear folks, but I am saying the odds of that happening are better than 50/50.

Gary Determan:
Dave, always great to have you on. And before we wrap things up, you touched upon this earlier in the program. People are hurting, some people are. And NelsonCorp Wealth Management has always been so generous helping people out. What do you got planned as we get closer to the holidays?

David Nelson:
Yeah, it’s a challenge because like our Christmas party, we generally bring in lots and lots of food and lots and lots of gifts, as far as toys, as far as for kids. We haven’t quite figured that out, Gary. We briefly made a pretty significant donation as far as to a charity in town that distributes to many smaller charities. We’ll probably be doing more as far as in that area. It’s important. I mean, again, I’m a local, I’ve lived here almost my entire life and I care about this area immensely. And so we’re going to do our part, we put stuff like this out, we talk about it as much as we do because we’re trying to encourage those like us that have truly been blessed, and I think have a responsibility as far as to do something significant and to give back.

David Nelson:
And we’re in a position right now where again, business has been good. Nobody’s put anything in our lap, I don’t want to imply that, we work really hard and continue to work hard, but there’s a lot of other people out there working hard that haven’t had the grace that we’ve had. And so, we’ll continue to do that. We’re trying to figure it out without having gatherings where we can amass a whole bunch of stuff. We’re going to have to probably dig deeper as far as into our pockets and make up the difference ourselves, because it does matter. And there’s individuals out there that are in tremendous need and we want to do our part.

Gary Determan:
Dave, again, thank you so much for your time. Looking forward to visiting with you on November 4th. You take care, okay?

David Nelson:
Absolutely. You as well, Gary. Thank you very much.

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 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. For more information, visit our website at www.nelsoncorp com.