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Below is a transcription of the Ask Gregory Podcast 88: Concerned How the Current Market May Affect Your Investments?
Gregory Ricks 00:00
Hey, welcome. I’m your host Gregory Ricks a financial advisor here to answer your questions and help you win with your money.
Podcast Intro / Outro 00:10
On today’s episode of the Ask Gregory podcast, Gregory will be discussing concerns about investments in this current market. And don’t forget, we have a complimentary download waiting for you on this topic. If you go to gregoryricks.com/podcast88 Again, that is gregoryricks.com/podcast88
Gregory Ricks 00:28
What I have done lately, is I anybody that has questions, worried, I just told my team as escalated to me, I’ll talk to him and help him with what’s going on. Typically, it’s, it’s, I’m really worried about my money, I see it going down, you know, I don’t want to run out of money. You know, there was a comment recently, you know, I’m just not going, you know, it might impact me paying off my house. Here, here’s a couple things in preparing for the phone call I look at, I look at their accounts, I have my analyst start pull pulling together numbers, to give them help. So this is kind of the process at our firm. And so, you know, typically we have a hub of people, you know, clients are connected to to Wealth Advisors and analyst and to service people. And then I’m at the center of the hubs. And we’re building out multiple hubs, because we have multiple offices and at some of those office might have multiple hubs to make sure there’s continuity in service, and that the client is connected to more than one person in case somebody leaves and we had a few people leave. And the other day, I had a conversation with someplace if you didn’t tell me, and I’m gonna call him, Fred, you didn’t tell me, Fred left, I said, Nope, I’ve kind of been busy, we’re hiring more people, we are looking out for your money. And I’m here, and I didn’t mean to be smart by it or mean, but I am here. And we’re all following my philosophy. And it’s one firm, one voice, the if an advisor leaves, he didn’t have something special. He spoke as me. And with the people we’re bringing home, I’m telling you, we’re bringing on some tremendous talent, it’s the pendulum has swung in our way that oh, my gosh, we’re improving. So then, in preparing for that, we’re gonna look at the Riskalyze number, we look at their account values, we look at their diversification in asset classes, we’re running numbers of how much are they down across all asset classes. We’re not just having a discussion about the stock market. Because no client of ours has money just in the stock market. If somebody comes to our firm and says, Hey, Gregory, I want you to, I want to put the money with you, but I want you to handle the stocks. They’re not a fit, we will not go forward. Or sometimes that’s not in their best interest. Because, in fact, you know, one of the abuse terms and misunderstood is that where somebody say, Oh, so you’re a fiduciary, and I tell them, it is not a title. But how we’re supposed to act, and always making and justifying decisions that are in your best interest. And if it’s not in your best interest, we’re not going to do it. But we have to believe and reason why. And be capable of answering to that. When there’s an audit and there will be it’s, we’re in a very compliance oversight
Gregory Ricks 04:42
industry, and that’s just kind of how I’m wired to do but it doesn’t always mean we’re a fit and working together. And sometimes that guidance is in a way that also dictates that we don’t go forward and that’s not a bad thing. That’s a good thing, but it is that term once again is an obligation to act in your best interest. You hear me refer to Besson binders, research, and it’s a paper, research paper on the history of the stock market. And he’s done it International, and it’s been updated several times is most, the name of the papers, most stocks don’t outperform 30 Day treasuries, it’s kind of a key part of my philosophy there, so then I get on the phone, and they they state their worries. And then I’ll shift to here. Here’s an example where I pull up somebody’s Risk Number, and it’s a hey, your number is a 57, which, when we set you up a few years ago, you stated that you were okay. With some market movement. And now it sounds like that’s changed. Now share something with you, the listening audience is, yeah, when money starts moving down, yeah, they’re going to change. And then I shift to the portfolio that we’ve built for you has a Risk Number of for an example 20. And there was another example where it was somewhere in the 50s. And I said, and your portfolio shows a 30. I had one discussion where it was in the 80s. And I said your portfolio is actually a 10 in how we manage it, very conservative. And we have four asset classes we utilize its, we like stocks. And we do so through exchange traded funds ETFs. And we use the indices for diversification. We also have you in bonds. But we’ve made adjustment to the bonds, why Feds raising interest rates, bonds don’t like interest rates going up, they moved on it down in value that impacted us a little bit the beginning of the year. But if you look at your statements, you see we’ve been making changes as we have gone along. And on the bonds, we shifted to less interest sensitive holdings inside of that, to where interest rates going up is not going to impact that much. You still need a conservative part of your portfolio. So we’re not going to just cashed that. So we’ve got we hold some stocks. We’re not getting out of those stocks, why I don’t want to interrupt the compounding of your money. And I don’t want to time it. Because we’ve got to solve two problems when to get out. When to get back in to proper time to get in scariest possible moment, bonds are going to be fine. They’re going to cycle through we’ve already made adjustments. We don’t sit here idle. You have tactical, either tak B or tak G. Either way. And let’s say for example you had of your assets, 200,000 and managed money, you’re probably setting with 100,000 in cash right now. Every conversation where they’ve had our quantitative tactical is one of their asset classes, that those holdings are setting in cash at this time, and the other asset class is fixed indexed annuities. And you know, we use those whose growth tools and they are not exposed to downside movement in the market. We only get the upside of the market. So this is one of those times where we put about 50% of your assets and that you have no downside exposure. And an example of looking across all four of your asset classes. You’re down 7.83% for the year. And the markets down 23% bonds are down 10% for the year.
Gregory Ricks 09:31
And even if they stay well, you know what about the stocks? We’re not shifting out of those stocks, but what stocks you were in intact GE or tech b that is now in cash in assets less than 25% of your assets are exposed to the volatility that is going on. You see we manage money knowing this is coming. We had meetings and events and send out notifications. We thought this environment was coming. And we were encouraging people to add the tactical portion, asset class, new clients coming on board do not have that choice, they’re automatically put in all four asset classes, or we don’t go forward in that case. And once you know, and sometimes this is just taking them through that, but I know we’re gonna get a 10% correction every two years every decade or 20%, every 10 years, or thereabout seems a little bit more often now. Sometimes it’s more. And with that said, we are making adjustments and the tactical part the quantitative tactical part hunts for momentum, why is it setting in cash now hold, there’s no momentum at this time, but it is waiting for momentum to come back. And then that money will start being incrementally put back to work to get us more of the upside. And probably if you’re intact B, I’m adjusting you to tack G which is growth. From when momentum picks up, we want to try to make more of the upside. And something else to remember here is after suffering 10 separate bear markets between 1950 and 1921. The s&p recovered and eventually achieved all time closing high. Each time, the average length that took to retrace it steps from a bear market was from a market low to a new Closing High was 25 and a half months, I think we maybe got went, you know two years of pain left, but it is going to come back and we’re going to get better. We’ll make adjustments on income to which asset class we should be taking income. But the purpose of this is to minimize the downturns and take give you the opportunity to have a higher probability of success going forward. So for today, looking at this and talking to you, you’re in great shape. Well, folks, that’s the conversation I’ve had a lot the past few weeks. Thanks so much for listening to Ask Gregory where we answer your financial questions. You can find us anywhere podcasts can be found and on YouTube and Facebook Live every Saturday from 10 to one subscribe, leave a review and tune in next time.
Podcast Intro / Outro 12:42
Don’t forget we have a complimentary download waiting for you on this topic. If you go to gregoryricks.com/podcast88 Again that is gregoryricks.com/podcast88
Gregory Ricks & Associates is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Gregory Ricks & Associates are not affiliated companies. Gregory Ricks & Associates, The Total Wealth Authority is our trademarked tagline, it does not promise or guarantee investment results or preservation of principal nor does it represent a certain level of skill. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This radio show is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Gregory Ricks & Associates is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Gregory Ricks & Associates. Any media logos and/or trademarks contained herein are the property of their respective owners and no endorsement by those owners of Gregory Ricks & Associates is stated or implied Gregory Ricks & Associates has a strategic partnership with tax professionals and attorneys who can provide tax and/or legal advice. AEWM, Gregory Ricks & Associates, WJ Blanchard Law, LLC, J Heath & Co. and Mortgage Gumbo are not affiliated companies. This show is a paid placement.