Ep 179: No One-Stop Shop Investment Strategy - More Knowledge, More Wealth
📍 Good day. This is Gabriel Shane, certified financial planner and your host of More Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance. My 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.
Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon wp.com. For sure. Now I'm the president of Fountain Wealth Planning. We are a fee only non-commissioned, true fiduciary, registered investment advisory firm. Folks. We help people all across the country.
We've got offices all over folks. We're headquartered here in Southern California in the beautiful Southern California, by the way, it was snowing in Southern California this past week. Needless to. We would love to help relate the show to your specific situation. Folks, we are offering a free financial assessment where we're offering one to two minutes of our time, one to two hours, excuse me, of our time, one to two meetings, uh, at no cost.
Folks really to help answer the questions you have. This could be where you are today, how your retirement is looking like, talking about taxes. Estate planning insurance. Folks, if you have questions on solar, if you have questions on renting versus leasing, whatever the case is, anything that involves a dollar sign, folks, give us a call.
We would love to help folks. Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon. like the bird folks, we can help answer the questions that you have, that most people cannot. And I know that one of the biggest questions people are asking is the stock market. What's gonna happen now, at my desk, in my office, not far from here, it's very simple.
I have this like magical device. It's a, it's like a circular blackball. There's a number eight on it. And you shake this thing and you ask it a question and something will pop out with an answer saying, try back later. Or, yes, outlook. Good. Uh, someone would call it a magic eight ball, but my point is, That thing has a good enough and is equipped with enough knowledge and information and analytics to give you as much of good response than professionals.
You get what I'm saying with this? I'm joking. By the way, please don't line up at my office so I can shake my Magic eight ball. It said tell you that nobody knows because there is so much information, so much data out there, you don't, there's no way you can have a one stop shop answer to what's gonna happen with the market.
And I'll give you a reason. I'll focus on something like Apple and nobody knows what's gonna happen with Apple cuz there's so many different ways to analyze it. Let me relate this in real terms to you. Let's say you're starting a basketball team, you may want to start it with a seven two African-American.
That's one way of analyzing a basketball player. Somebody tall and potentially athletic could make a lot of sense for you. Let's look at another way where you went to school. Maybe you went to Duke, you played basketball For Duke, somebody might say, you know what? I wanna see their stats. How many points they average, how many assists per game, how many rebounds somebody else might say.
You know, I just want them to play. I wanna watch them play. Let's do an open gym tryout and watch them play basketball. Folks, these are four different ways to analyze a basketball player. And it's the same thing in the stock market. You could have finan, uh, financial analysis, technical analysis, quantitative analysis, aggregated analysis.
Folks, there's so many different ways to analyze the stock, which is why you see on sometimes on tv. One person says Buy apple, and the other person says, sell Apple. They're looking at. Different trigger points, two different analytics. This is the issue. This is the thing, and the problem with this industry and investments, nobody knows.
This is why it's so important to stay disciplined in your investment philosophy. Most people don't have an investment strategy. Most people don't have a proper way of knowing when you should buy and when you should sell. And this is the issue we see with most investors out there. They're going on What Jim Kramer is saying on tv, they're going based on what Warren Buffet is saying in his state shareholder meeting.
These are sure points and these are tools, but this isn't the bible. There is no Bible of investing folks. Some people do value investing. Some people do growth focused. Some people just go on individual stocks and what's the hot stock of the day? This is the improper way for long. investing. You look at what pension funds, endowments, corporations, foundations are doing.
They got trillions of dollars in long-term strategies that make sense. Folks, if a globally diversified portfolio is good enough for trillions of dollars, shouldn't that be good enough for you? I mean, think about that for a second. This isn't rocket science. You gotta figure out what your target rate of return is on your investments.
That's number one. That's goal number one. You may be comfortable taking a ridiculous amount of risk. Wanting to shoot for that 10, 11, 12% returns, depending on the industry, I get it. But you can also lose 30, 40, 50% of your holding in a period of time. You may not need to take that much risk. You may be already won the race of investing and saving for retirement.
So the point is you are not needing to focus on getting a 10, 11, 12% return, so then you might be taking more risk than necessary. On the contrary, you might be too conservative in your. What do I mean by that? You might be too much in cash and bonds and fixed income. That might not make any sense. You might not be able to have a fulfilled, successful retirement where you have enough money to be able to last you for the rest of your life.
You have to figure out what rate of return. You need. By the way, folks, if you're just joining me, you're listening to 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 say we're just talking about the general markets and in general with analysis shows.
And what analysis shows could be different depending on what is out there. This is why other people feel bullish, which feel good about the stock markets. Another feel bad, folks. There's always something bad and always something good. Let's look at today Outside. Go outside. You might be saying, wow, this is terrible weather.
Because it's snowing in Southern California. Other people might say, oh, this is great for change. Somebody else might say, oh, normally this time of the year it's a little bit warm and human. I am so happy for this change of weather. Somebody else might say, oh, this is terrible. The traffic's gonna be bad.
Point of view is important, and while you invest long-term and avoid the noise and ignore all the nonsense that's out there, this will keep the positive and the emotions in check where you're not doing. What bad investors do. Now, what does a bad investor do? What they do in times like this, when the markets are, let's say, down, they'll sell.
What are you supposed to do when the markets are down? Come on. You know the answer. Just say it. I want you to say it out loud, not in your head. What do you do when the markets are down? You don't sell. You buy. What do you do when the markets are high? When they're up, what do you do? Yes, Sal. The point is nobody has a strategy or an identified target.
Of when to buy and when to sell. It's an arbitrary high and low. What's high and what's low? When do you know it's high or low? What's what If it's low now and goes lower tomorrow, you get what I'm saying? Having a proper strategy in place is how the big boys do it. It's how the institutions do it. , this is what I recommend that you do because most of the time people out there, they're blindly saving money into their 401k.
They're dollar cost averaging in which I like that part of it, but they're doing it improperly. They're doing it with stocks and bonds. I can argue it has to be done only with stocks when your dollar cost averaging in for your con attributions. Why? Cuz dollar cost averaging only works when there's volatility and what makes more money long term And what's more volatile?
Stocks. So a lot of people are doing that incorrectly and then they're not re. appropriately when that happens. So you have to take a look at your situation, make sure you're properly doing it and properly allocated, but all starts on what's the target rate of return that you need. And most people don't do it and they don't get it right.
This is the flaw of how people doing it themselves, and this is the flaw of doing it with improper people, giving you advice, trying to sell you crap on what you should be invested in. Folks, this is why we're offering a free financial assessment where we offer one to two. One to two meetings of our time at no cost.
Folks. Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for short. Folks, we got offices all across the country. , we can help with your situation and we can help no matter where you are. And if you really want to come to Southern California, we got our headquarters over here.
We're in a 40,000 square foot building. We'd love to give you a tour and show you what we're all about here, because we are all about the quality. And what we're seeing out there is people are being pitched stories. They're being pitched, false returns, they're being pitched, false narratives that they can't lose money.
And the problem is people don't understand the long-term ramifications and the lock that they're putting their. I could argue this is not, when you look for safe investments, this is what you should look for. I don't wanna say aggressive investments cuz you might buy something crazy, but where you put your money into the stock market yet again, not anything crazy.
That's why there's large cap us. Some people call it the s and p 500. There's mid-caps, there's small caps, there are an international developed markets, emerging markets. You get what I'm saying? There are so many different asset classes that are out there. I could argue this is the best time to do it.
Well, arguably best time is maybe October of last year. , which is 2022 or even earlier in 2022 as well. So you have to identify what makes sense for you, but by doing it alone, there's no partnership there folks. . Now, some people do operate well independently, but then who do you bounce into ideas with? When things change, when tax alls change, when investments change, when markets change, when the economy change, when the feds decide to change things with the interest rates or inflation that's happening, uh, rapidly.
Who do you run that by? The purpose of this is finding a partner. Folks, most successful business starting partnerships Look at. Look at Apple, even Microsoft, and looking at multiple different aspects of who can help build and achieve your vision and your goal. This is why we're offering that free financial assessment.
This is what we do on a daily basis. Folks, imagine what you know now and being able to help yourself. 10 to 20 years ago and whatever it may be. It could be raising a family, it could be working, it could be investing, whatever the case is. Now, think about this. You are entering a new stage in your life, whatever that is, whether it's starting a new job, whether it's moving, whether it's retiring, whatever it is.
guess what? We've been there and we've done that. You get what I'm saying? It's like talking to yourself 20 years ago. Except we are that self that's already experienced. This. We've helped you 20 years from now. You get what I'm saying? Give us a call. We would love to help folks. Our phone number is (855) 963-2526.
That's 8 5 5 96. Like the bird, we can help put a personal assessment for you to help relate the show to your specific situation. Now, I do want to go over with you some numbers here. Now these numbers are gonna be just what's going on with the markets. We're gonna look at some fundamental and technical analysis, but more importantly, it's understanding where we see and feel the markets are going.
Now, history, they. . Some say it repeats itself. Some say it doesn't repeat itself. We are gonna just look at it from the past. It has no guarantee on future returns, folks. I understand that you understand that too, but I think the basis and the logic of all of this is that using just data that's out there currently to see how can this benefit you long term.
I mean, we know the markets go. . We know that companies like Microsoft, Google, Amazon, they're gonna be in business and they're gonna wanna stay in business for a long time. So they're gonna adapt their business models to continue to grow. We get that. And those who can't fail, look at Intel. They just seem to stay stagnant.
They're not, they feel comfortable, no longer innovating anything. You get what I'm saying? And they're big. And we're big in the microchip section. And now Taiwanese microchip has taken over that. So the concept is how. , are we going to analyze that? The eventual growth that's gonna happen because America is capitalist.
We are always looking to increase our money in our pocket, and that includes for you too. You're not restricted by your government on how much you can make. You have the right to continue to grow it. By the way, folks, we're gonna go on a quick break. Okay? We're gonna be right back and we're gonna discuss some fundamental analysis here in a little bit.
We'll be right back after a few.
Hey, what's keeping you up at night? Are you tossing and turning, wondering? Do you have enough to retire? Am I investing correctly to my age? Am I paying too much in taxes? Can I maintain my lifestyle given the skyrocketing inflation? Listen, simplify your life and sleep better at night by getting the answers to your most stress causing financial questions when you listen to more knowledge.
More wealth with me your host, Gabriel Shaheen, certified Financial Planner on we look forward to serving you and follow me@followgabriel.com to become more acquainted with myself and my team at Falcon Wealth Planning.
Welcome back folks. This is Gabriel Sheen, certified financial planner and your host More Knowledge, more Well here on every weekend, talk about all important topics of personal finance. And today I just want to go over some analysis and I like looking at some of these charts here. JP Morgan has a really good chart.
Through, uh, guides to the market. So I'm gonna go over this with you. It's something that I use and I look at on a quarterly basis, and obviously I understand all the data that's there. Now, keep in mind, I know some people have their investments with banks, whether it's Wells Fargo, JP Morgan, or whoever.
Credit unions, just keep in mind, they are not fee only. Okay? These are fee base. They get commission, which means they only get paid if you buy something from them. Sometimes some of 'em are crazy enough to say, oh, you don't pay me. The insurance company pays you well, well, well number one, . Well, why are you doing, you're, you're having questions on investments.
Why are you trying to buy insurance? Right? And a lot of these people get in trouble and they get dinged through the s e C because they're selling insurance that are often misrepresented insurance. You can only make money off insurance if you use it. What do you mean? Well, an insurance definition is to make you whole.
You get what I'm saying? You bur, God forbid your 2000 square foot house burns down, they're not gonna rebuild it with a 20,000 square foot. Give me a break. You go to the doctor cuz you broke your arm and you need to use your insurance. They're not gonna give you a free toaster because you went to the doctor.
You know what I'm saying? You just, they're gonna fix your arm. That's what it's designed to do. They're not gonna give you a hundred dollars gift card to your, your local restaurant. You go and rear-end somebody, or somebody rear-ends you in your Toyota Prius. They're not gonna replace it with a Lamborghini.
They have to fix your Prius or replace your Prius. Health insurance, or excuse me, life insurance is the exact same way. It's the same concept. Everything about it, it's the same. It's designed to make you whole. The only way you make money with life insurance is if you die. Are you serious? Is that what you want to do?
You want to die? No. You don't want to die. So life insurance be should be the only thing you're happy to waste money on. on a monthly or annual basis, depending on how you pay for it, because you live, you get what I'm saying? You should be happy to waste your money on health insurance. You know why?
Because you're healthy. You should be happy to waste your money on house insurance. Why? Cuz your house is intact along with all the things inside of it. You should be happy to waste your money on. Car insurance cuz he didn't get in a car accident and suffer any serious injury. What am I missing here?
What are these sales pitches about? How are they legally allowed to position to you that this is gonna help you for your retirement? That you could just borrow 50% of what you put in tax free? Of course, you taking out 50% of what you overpaid into your policy. You overpaid this into your policy guys.
The insurance, you look at insurance costs is maybe a hundred bucks. You're putting in $1,900, and then over time, as this extrapolates over time and compounds, theoretically in today's dollars, you're able to take out 450 tax free, and the other four 50 is supposed to pay for the interest. Guys, find me somebody who's done this over long periods of time.
Find me seriously. It's garbage. Absolute garbage. And this is sold to people all day long and it upsets me so much. So I went on this digression of commentary of insurance. It doesn't work, folks. Don't be sold insurance products, for God's sake. This is crazy. It's insurance. Right now, if I wanted to get a 50 million life insurance policy, guess.
The insurance company wouldn't give it to me. You know why? Because if I died, my wife wouldn't be so upset. You get what I'm saying? Insurance is designed to make you whole. Do you get that? To make you whole? That's what insurance is designed to do. . So think about that before you look to invest. So let me go back into this analytics we were talking about.
Fundamental analysis, technical analysis, all that fun stuff. Okay, so let's focus on the s and p 500. Everybody knows what that is. Largest 500 companies in America. So doing this, you want to look at price to earnings ratio. What does that mean? Well, it's a price of a stock based on what they earn. Okay, so if you were to sell your.
just your shoe repair store on the corner. You may net your price, uh, of the shares. You might ask for 50,000 to sell it. Well, it better net 25 to 50,000 a year. That's just how it works, guys. That's what your company is worth. Okay? If it's a bigger company, let's say that it could scale. Well, let's say it makes 1 million a year.
You're gonna sell it for maybe 4 million a. . Okay. So that's just how it works now in the stock market. Cause these are global companies, massive known worldwide, especially the largest 500 for most of 'em. Typically, if it makes 1 billion net a year, that's what it earns. The price is roughly 20 billion, roughly 20 times the amount now.
Historical average is not quite that, but I do wanna highlight in the.com bubble because these, all these worthless companies that were worth billions of dollars. The forward price to earnings ratio in March of TW 2000 was over 25 x. Okay? So it was extremely, it was worth 25 times what a company makes. A one year, 25 years later is what it goes for.
Now, when you look in, uh, Of 2000, uh, late 2007 during the Great Recession, uh, it was price earning Ford. The forward price earnings was about a 15 little over 15. Now you go to 2020 during Covid, February 19th, 2020. That was about in 19.2. Now, would you look at last January, January of 2020, it was a 21.
Where are we today, folks? It's an 18. What am I trying to say? When you compare it to some of these earlier, , it's actually, I'm not trying to say it's a good deal. I am just trying to hear, to notate that it is becoming territories of potentially good valuations, and this continues. It doesn't change when you look at the forward PE and the 25 year average is roughly 17.
What we're. The latest one as of the end of the year for 2022 is roughly 18. You get what I'm saying? So there are some options here where we can argue there is some value to the current purchases and when you look at the actual value, versus growth. There is still significant overperformance of value, and a lot of this starts with the energy sector, financial sector, materials, consumer staples, and so when you look at those, there is still significant value.
in there with value companies outperforming growth. In addition to that, when you look at small cap versus large cap stocks, when you look at the size, the mere size, the tech stocks are almost twice over. Twice the size of small. size companies, which is logical to say because larger normally the just the top five large cap, whether it's Apple, when you look at top five, which is Apple, Amazon, Microsoft, Google, and Facebook, that represents almost 20% of the overall market.
You get what I'm saying? So, but here's the thing. When you focus just on tech, which is like my earlier conversations in the past, folks, tech is two times more than small cap. When you look at healthcare, small caps, Larger when you look at financial, small cap is actually larger consumer discretionary.
It's actually larger. When you look at industrial, it's almost two times larger. So a lot of the sectors, including energy, utilities, materials, and real estate are actually larger from a percentage of market capitalization in those sectors. What does this mean? There is still value ad folks. and when you look at still the comparison between value and growth, even from a 10 year annualized value is no longer that under growth.
The large cap still has a large. Growth tilt where it's 14 and a half percent, 10 year annualized growth versus 10.2. But when you look at mid caps and small caps, it's important to be diversified so much so when you look since the peak of February of 2020, since the high value companies have roughly done the same return as growth and has outperformed by almost double in mid-cap and almost quadruple in small.
This is what I'm talking about folks. This is why you want a globally diversify portfolio. It's crucial in the success. Of the reduction of volatility into your portfolio and long-term returns. The question is, once you buy all these mid-cap, large cap, mid-caps and small caps, and then growth and value sub-sectors is, what do you do once you buy 'em?
Do you just sit on them? The problem is, most of the time what we see is people do just sit on them. This is why we're offering a free financial assessment to take a look at your specific situation to let you. What you should do, what you should buy, what you should sell, how much more you need to reallocate in your portfolio.
How much underweighting do you have in international developed markets? Emerging markets? When you look at everything as a whole, it's being able to identify the important concepts of diversification and listen, it's not just the diversification, cuz you do it once, right? It doesn't mean it's gonna be right long term.
You have to continu. Look at this, folks. This is why we're offering one to two meetings of our time, one to two hours of our time at no cost. Folks, give us a call. We'll be happy to. Anything that involves a dollar sign, we can help no matter where you are, folks. Our phone number is (855) 963-2526. That's 8 5 5 96.
Falcon like the bird. Folks, we can help relate to show to your specific situation and we are servicing currently in nine states. We got offices all over the area. Folks, we would love to help you out because the way these. Look, the way these markets are acting folks, they are completely reactory. They react to news that's out there.
This is why it's important for you to be proactive to sell when nobody wants to sell, to buy, when nobody wants to buy. Think about it. Warren Buffet has a famous saying, be fearful when those are greedy. Like like two years ago when the markets were super high and people were just spending money like crazy.
So that's when you want to be fearful and when those are fearful. , that's when you be greedy. Now people are fearful. This is why I'm saying it could be a great time to buy. And if you are a long-term investor, I would say absolutely it is because people are always freaked out folks. People are always gonna have a reason not to do something.
Procrastination is the number one failure of retirement, and it's why people don't. Earlier and you look at the art of compounding, God bless those who started early, and you deserve everything that's coming your way. But now is not the time to try to pretend you're smarter than you really are. And I'm speaking for myself.
Some of the mistakes I made in investments are all based on emotion. Some of the mistakes I made in investments is what I call my Vegas account versus Falcon Wealth Planning. Doing a majority of my investing for me has significantly outperformed my personal a profess. That's rated one of the top financial planners in the country.
Folks from Aria Intel, from wealth management, from City Wire, one of the fastest growing out there. Why? Because of the value that we offer and the knowledge that we give. Plus we have no broker dealer affiliation. It's not like we're working on a Stanley Merrill Lynch, lpl, Edward Jones. We, they're not telling us what we offer our clients money is at the Fidelity.
The Charles Schwabs a TD Ameritrade. We can invest your. Anything we could do, anything anybody else can do. With that being said, if we could choose any investment out in the investment universe, we are having our core holdings being globally diversified ETF portfolios. Think about that. What does that tell you about one of the fastest growing firms of the country, arguably one of the top financial planners in the country.
What does that tell you about the investment philosophy in the market is how I started the. Nobody knows. It's like what I said with the Magic eight ball. You shake that for the answer that you're looking for is just as good as a professional. So why do you hire a professional? Two reasons. What additional value can you provide in addition to investment management?
And number two, to delegate out the discipline management is being able to control the emotional side of investing, to be able to not when it's. to buy. You want to sell when it's high. You don't want to chase just the next shiny thing. You don't want to chase the the top returns. You should have done that earlier.
So what does that mean when things are low? , you don't wanna sell. Sadly, I see a lot of people sell when it's all but you wanna buy. You wanna buy when nobody wants to buy. This is the value that provide. This is how we would want to help folks. Give us a call. We would love to help you in your situation.
Relate this show to your specific situation. Our phone number is (855) 963-2526. That's eight 50. 96 Falcon like the bird. Folks, this was a fast, fast show. I want to thank you for tuning in with us this weekend. You can always get these shows on your local podcasts and Spotify. Just look up more knowledge, more wealth.
Feel free to give us a call. We would love to help you with the questions you have. Anything that involves a dollar sign. Today, I was talking about more analysis and investments, but folks you. Whatever it is you want to discuss would be happy to help folks. We're offered one to two meetings, one to two hours of our time at no cost.
Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the Bird, or visit our website@falconwealthplanning.com. That's Falcon. wp.com for short. We'll have a personal confidential conversation to help relate this show to your specific situation. Folks, we want you to enjoy your weekend. Have a great week and God bless.