EP. 147 More Knowledge, More Wealth: AM 590 Radio Show

June 25th Podcast

[00:00:00] gabe: Good afternoon. This is Gabriel Shahin certified financial planner, and your host of "More Knowledge, More Wealth" here on every weekend. Talking about all important topics of personal finance. Our goal is to give you the knowledge you need to increase your wealth. Now to the listener, you can always reach out to myself or any one of our colleagues here at Falcon Wealth Planning.

[00:00:22] Our phone number is (855) 963-2526 that's (855) 96-FALCON like the bird, or visit our website at falconwealthplanning.com. That's falconwp.com for short. Now I'm a principal here at Falcon Wealth Planning a registered investment advisory firm. We are a fee only financial planning firm that do investment management as well.

[00:00:48] But folks, we talk about everything that involves a dollar sign that talks about where you are today. How retirement looks like talks about investments, insurance, estate, planning, taxes, folks, you name it. We can help with it. And we would love to relate this show to your specific situation. so we are offering a free financial assessment.

[00:01:07] Typically it's one to two meetings, one to two hours of our time and we want to give it to you complimentary and we help people all across the country and would love to have you take advantage of it. Our phone number is (855) 963-2526. That's (855) 96-FALCON like the bird we look forward to helping you put together a customized plan with questions that you may have that you've been desiring to have because look at everything that's going on right now, we're talking about the brink of having a recession, talking about high interest rates, low bond prices, low cryptocurrency, low stock market, war in Ukraine, and Russia guys.

[00:01:49] There is no shortage of discussions of what's going on and you may have questions on that. What I'm everly concerned about, is not what's going on outside your home. It's what's going on inside your home. Not what's going on outside, but inside. And the reason that's important is you should be not worried as much of what's going on outside, but what's going on inside because right now you have to change your frame of mind reference.

[00:02:20] And that is you have to look at the positivity of what's going on right now. Your money, wasn't a hundred percent invested or at least it shouldn't have been, it should be diversified portfolios because when you look at the markets right now, down 20 to 35 plus percent, depending if you're looking at the S and P 500, we're looking at the NASDAQ.

[00:02:41] I know the Dow Jones is down about 15%, 16%, 17%, depending on the day. I know you're looking at small cap, midcaps international, and so on, in essence, across the board. The markets are down. I think that's a fair general statement, but why are you so upset about it? Do you need the money today? Do you need a hundred percent of the money today? Okay. Oh, but you're retired. You don't have enough time to make this up at 60, 70, or even 80 years old? I don't think that's true because average recoveries take less than 11 months. Look at Covid, in less than four months, it was already up. Heck the stock market had started to drop in February of 2020 by December of 2020, you were up 20%. Now the interesting thing about COVID was the rebound and recovery and amount of inflow. How many people invested when the market was down 30+ percent. Let me have some numbers for you. If, and I'll just talk big picture. If the market is down 50%- five zero. You're $100k is worth $50k.

[00:03:52] Okay? So you're upset, right? You're angry. You're not happy. And even if it recovers 50%, you're not back at a hundred thousand, because you made 50% on 50. So you're at $75k. Alright? Makes sense? Versus if you're down 10% and up 10%, you're at $99k, right? Because the $100k dropped to $90k, and if you make 10% on $90k you're at $99k.

[00:04:17] But right now we're looking at maybe a down 30% territory to put that in a context is if you're a $100k is now $70k, the recovery you need to make 43% to get back to $100k. If it drops 40%, you need to make 67% to get back to your original principle. The reason that's important guys is because this is a buying opportunity.

[00:04:41] If you have part of your money in cash, this could be a good time to buy, assuming you don't need the money for the next year or two. Why am I saying year or two? Because I don't know, it could take up to three years for the market to recover fully. During 2008 from the top of the market to the full recovery, took about three years and that was a pretty bad time.

[00:05:03] Some compared it to the great depression. What's my point? You should be excited, especially if you have some money in bonds or other asset classes where you can rebalance- reallocate more importantly, rebalancing people get that you could do that automatically in your 401k, but a reallocation is huge.

[00:05:22] That's where you could take money and reallocate it to what has suppressed the most. And please, we're not talking about individual stocks here because those guys can go to zero. By the way folks, if you're just joining me, you're listening to Gabriel Shahin, certified financial planner, and your host of "More Knowledge, More Wealth" here on every weekend talking about all important topics of personal finance.

[00:05:43] And right now I wanted to just share with you about the positivity of the market. The only person in America, excited right now that the markets are down great. Our clients are down millions of dollars across the board. I mean, we manage half a billion of assets roughly, and so when our clients lose money, we lose money.

[00:06:02] So we're not happy about that, but you have to look at the opportunity and what percentage of the clients that lost the money can afford it. All of 'em. I'm not saying they can afford to lose money, just burn money. No, but the way it's invested is known, it could recover. Individual stock can go to zero.

[00:06:19] It could easily go to zero. Jeff Bezo says it about Amazon. Amazon will be out business one day, his job, or what his job used to be to keep it in business as long enough, as long as possible. Every company will be out of business eventually. Look at GE. They used to be the powerhouse of the world, and now look at them. They're split up.

[00:06:41] They're small. market capitalization, it used to be a mutual fund in itself. It used to be worth hundreds of billions of dollars, and now it's a fraction of that. So when you invest in markets, it's not like that. See individual stocks can make you a lot of money really quick and also lose your money equally as quick, if not faster.

[00:07:02] Cause when things are bad, they're really bad. When things are good they're really good. But when you look at the global markets, it's in general, it's how the economy's doing as a whole. So you're not gonna get your hundred percent returns like you did with Apple, Amazon, and Tesla or thousand percent returns.

[00:07:19] You're gonna get historically speaking, 10% plus return on your money. That's important to note because companies are designed to grow and they're designed to go through recessionary periods and certain companies do well in recessionary periods. And I know you're probably gonna say , there's not one company that's doing right now.

[00:07:38] That's not true. How is Chevron doing? How's Exxon doing? How's all the oil and gas doing? You get my drift? Being properly diversified, you will always have something that is up and most people don't understand that they put there's money in their FAANG stocks, the Facebook, Amazon, Apple, Netflix, and Google.

[00:08:02] They put their money in the meme stocks. I call them Reddit stocks, that game stop and AMC theater. How that makes sense? I don't know, but it sure sounds cool. Until it's not until you lose a boatload of money. This is where you have to be smart. You can make a lot of money with individual stock. You can create wealth very well with that, but you keep it through diversification and you have to do that at times like this, because we are looking at a fantastic buying opportunity right now.

[00:08:33] The markets are down 20+, 30+ percent from their high. This should be something you should be excited about. You should be salivating over. We don't get this option or often, and we were blessed enough to get it during COVID. And so many people that bought in at a down 30%, they didn't make 30% when it rebounded, they made 40%, almost 45% when they just got back to the principal amount where the market used to be, look at it this way.

[00:09:01] If you put money in now, you're getting it without having to lose 30%. You're getting in. There are risks and reward to investing. The risks are losing money. If you get money in now, there are no risks. And yet I see people being sold annuities. You should have bought an annuity when the market was at an all time high, not when it's a low because you're losing out on the rebound.

[00:09:25] It makes no sense to do that, and sadly, I see people do it all the time. I see people in individual stock that should have taken their profits last year. Heck it may still make sense for you to take your profits now and reallocate to something safer. You have to understand the markets of where they are, and this is why there's no substitute professional.

[00:09:43] You have to look at where the markets are, how the governments are looking at our current expansion period. Where interest rates are. All of these play a part of the tech boom exploding that is very similar to what we had during the early two thousands. During the ".com" bubble, we experienced something very similar to that with low rates and private equity firms and hedge funds putting money in to markets because it was so cheap to do it made no sense to go ahead and invest in the stock market when you can leverage out like crazy.

[00:10:17] I'm not recommending that you do that. What I'm recommending is that you understand, you get an opinion, you take advantage of something that may look dire or not pleasant, and you might be upset of multiple things. I've had people focus on the political climate at times like this. So let me understand.

[00:10:33] You were upset when Trump's in while the markets were up by the way, but let's not digress. And now you're upset that your guy's in. If you can't have your cake and eat it too, you can't just, maybe you're just always upset. Maybe you're just that person that has the saying for the sake of argument. Are you just wanting to argue, are you just wanting to argue for the sake of arguing?

[00:10:55] That's what the sake of argument is? So please be positive. There is so much to be positive right now in America. There is so much to be positive right now where the markets are right now, businesses are open. Businesses are making money and the markets right now are going through repricing. Take advantage.

[00:11:15] And if you need help with this, give us a call would be happy to help. Our phone number is (855) 963-2526. That's (855) 96-FALCON like the bird guys. We're gonna go on a quick break. We'll be right back after a few words.

[00:11:37] Welcome back folks. This is Gabriel Shaheen certified financial planner, and your host of "More Knowledge, More Wealth" here on every weekend. Talking about all important topics of personal finance. And today we are discussing the current stock market. Yes, it's down 20%, 30% depending on the indice. Okay? But look at the positive.

[00:11:54] It's a 20% to 30% sale. We talked about it a few episodes ago, where this is the only industry in the world where people get upset at a sale, but look at it like this. And I gave you some examples earlier of $100k, or it doesn't matter, $1 million, $10 million, $100 million, or $1000 dollars.

[00:12:11] If it loses 50% thousand goes to $500. Wouldn't it be great to put in another $1000 at that time, another $10,000, $1 million, if you're lucky enough to have that sitting in cash. Because once the market rebounds, after a 50% loss, you make double, what does that mean? If you're at a $50k has to go back up to $100k, you have to double the $50k.

[00:12:35] So even though you lost 50%, you make a 100% on the rebound and it's like that no matter what right now, we're at markets depending on the industry down roughly 30%. You need to make a 45% rebound just to get back to where we are. And I'm just gonna make an assumption right now. I bet you, you put $100k and in three years from now, your $100k will be $150k, heck I already said it'll be 45% increase, if it comes back to where it was, let alone in three years from now. I'm not, this is no guarantee, but it's the reality of just knowing where we currently are right now, where markets go up and down and this assumes we invest in general markets.

[00:13:15] This doesn't assume that you buy individual stock that, oh, by the way, can go out of business. It's just interesting about the negativity that I see and the fact that consumer sentiment is so low right now, worse than it was during COVID when, oh, by the way, you were locked down in your house. When you couldn't go somewhere to eat, you had to wear a mask in public, and you could only work.

[00:13:38] If you had a mandatory job, a special trade service job that required you to go to work. And how are you feeling worse now? I understand the high interest rates, I understand the home prices are a lot more, I understand inflation is through the roof. I understand the stock market, the bond market, the crypto market.

[00:13:58] I understand the war that's going on overseas. I understand all that, but my God, you have to understand: one, there's a crazy pandemic where things were shut down for months. To where we are now, where people are still spending and buying money. Go to the car dealership, that's proof, go look at home prices right now.

[00:14:15] There's still multiple offers all across the country. You have to be positive of where you are currently. You have to see the opportunity that's in front of you. Don't fall into the pessimistic society right now that social media just has you feel like everybody's crazy. Sure. Maybe everybody's crazy, but think of the positives to.

[00:14:37] The positives are there are opportunity in markets. The positives are, is you have stability. Dare I say, in America, we're not in a war right now. God willing, we're not ever in the future. We are handling our business through tariffs. They become economic wars. Still got what's lingering with China and eventually Taiwan.

[00:15:04] There are some talks there about America's intervention right now. And there are some tariffs that are currently being released to allow lower pricing and to reduce the inflation that's happening with China 500, 150 or so are released. And so this may continue as well, ESP, especially trying to mend ties with our foreign partners, which the democratic party typically does a good job of historically.

[00:15:32] My point is you could always find something to be complaining about and always something to be positive. I'm always an optimist. Always. There's always some positivity that happens. And that right now with the market so low, you should be positive. You should be optimistic to take advantage of sales. And right now market is on sale.

[00:15:52] I don't care the indice that you have right now, you can take advantage and I can foresee you making money on this long term, as long as you're comfortable putting your money away for at least three years. I and knowing even if it goes down, I'm not saying we're at the bottom. What I'm saying is right now, it's a great sale.

[00:16:13] And so as long as you're comfortable seeing it drop above, seeing it drop and knowing that it will over time recover, then don't worry. Be positive that you're buying in now. If you were happy, six months ago, you should be more happy today. It was over six months ago, the market was over 20% where it is now. You shouldn't be upset today.

[00:16:37] Most people that are, have no strategy. And I don't blame them for that. I don't expect you to this isn't your industry. But to not listen and to stay procrastinating is no longer an excuse in today's day and age, especially if you're tuning in today. And this is why we're offering a free financial assessment.

[00:16:55] And we tell you to take advantage of it. There's no reason not to, if nothing else get a second opinion, we can help nationwide our phone number is (855) 963-2526 that's (855) 96-FALCON like the bird. We'll be happy to put a personalized assessment to help relate this show to your specific situation, by the way, folks, if you're just joining us, you're listening to Gabriel Shahin, certified financial planner and your host of "More Knowledge, More Wealth" here on every weekend talking about all important topics of personal finance.

[00:17:31] And today we're talking about this beautiful market that's down, which isn't why it's beautiful, but because of the discounts that are there. And you should be taking advantage of this volatility that's happening by selling certain aspects in your portfolio and buying others that are down some might say, yeah, but what if it stays down or goes down more or goes to zero?

[00:17:50] If it goes to zero, you're investing in the wrong thing. You shouldn't be investing in something that can truly go to zero. That's crazy. The amount of risk that you're taking is equivalent to Vegas at that point. Think about it, to go to zero? That is a gamble. Versus if you're in an investment, even if you bought into a Denny's or a restaurant or whatever it is, at least there'd be some physical fixtures or furniture or some equipment that is there that you can liquidate.

[00:18:21] You get what I'm saying? Maybe it was just mismanaged. People don't have the courage to say is they've mismanaged, their situation. It's almost like admitting you have a problem. Do you consistently feel you're underperforming the markets that you are not getting that 10% plus rate of return? I'm not guaranteeing you a 10%.

[00:18:41] I'm just saying, when you look at what the market's done over time, if you're not getting market like return, you have to be questioning what you're doing or how you're investing. And if it's appropriate for you, heck the last three years have annualized returns of over 20%. Most people haven't got those returns.

[00:18:58] Why are people still trying to outperform this market? I'll never know professionals can't do it. They claim that they could do great at certain times of the market, whether it's expansion or recessionary periods, they say that they're good at capturing a tech segment of the market or real estate segment of the market or a finance segment or a healthcare segment.

[00:19:20] They're not trying to say they can beat the market. They may show you periods of time they have. That's normal, that's what sectors do. You have to just realize where you're at, what you're trying to achieve. It's shocking, it's funny because we just invest our clients in indicies. So they get index and market-like returns.

[00:19:38] It's crazy. They're not everybody's doing what they're we're doing. It's absolutely shocking. Frankly, it's good for business that not everybody does what we do, but it's easy to explain to our clients when they make money because look at the market. It's easy when they say we lost money. It's of course lost money, look at the market. But it's taking that balance of how much risk and you're comfortable with the reward. Everybody wants to reward but how much of the risk are you comfortable with? There is a science behind it. And I recommend that you get help from a professional, whether it's us or somebody else, just please make sure they're fee only, not fee based, not commission based, not somebody at your local banks, because those are product driven, sales people. Nothing against it.

[00:20:20] I guess there's a place for it, but are you really only wanting advice for somebody who can sell you something and you have to buy that's transactionary? Mean really a fee only advisor is the one that I would get my advice from, because you have to pay them directly, the information they have in their brain, which is why it's so important that we are offering a free financial assessment.

[00:20:39] Cause you won't have to pay for that. We get to show you what you're doing. That's good, what's bad, and really what you should be doing. A lot of people have taken advantage of this. We've done thousands of assessments on an annual basis and we'd love for you to join. We have me and my team of individuals of certified financial planners.

[00:20:58] We can do this for you guys. Give us a call. We can help. We've seen multiple things from real estate owners to business owners, to people looking to retire, or to people that get in into investment. There is no wrong time to call. There is a wrong time to start and that's when it's too late. And the funny thing is most people think that they should have started three to five years ago.

[00:21:20] If that's the case, there is no wrong or early time to start, because there's no cost for you to get information. Give us a call. Our phone number is (855) 963-2526 that's (855) 96-FALCON like the bird or visit our website at falconwealthplanning.com, that's falconwp.com for short. There is no excuses about what's happening in this market, And to be fearful of what's going on. The market already dropped it already dropped, for you to sell now would be guaranteeing and securing those losses. Most people when they sell after a drop, they don't know when to get back in, because they're kicking themselves for selling while it went up, the irony is I need you to sell, why I need you to sell because then the market goes up right after you sell you know how that works, right?

[00:22:16] The world revolves around you. So right when you sell the stock market goes up, you know why it dropped it's probably because you bought into this market. You get what I'm saying? It always seems like that's the case. Maybe because the issue is bigger than what it may actually seem. Get verification of that.

[00:22:35] There's no judging here. There's trying to get the right thing. Our phone number's (855) 963-2526 that's (855) 96-FALCON like the bird, folks.. That was a fast show. I wanna thank you for joining over to us this weekend. You can always reach out to myself or any one of our colleagues at Falcon Wealth Planning.

[00:22:54] Our phone number is (855) 963-2526 that's (855) 96-FALCON like the bird. Reach us, we'll have a personal confidential conversation to give you the knowledge you need to increase your wealth. We want to thank you for listening. Enjoy your week. Have a great weekend. And God bless.