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[SPEAKER_10]: On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is Invest Talk.

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[SPEAKER_10]: Independent Thinking, shared success.

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[SPEAKER_10]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm, serving clients throughout the United States.

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[SPEAKER_10]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

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[SPEAKER_09]: Good afternoon, fellow investors and welcome back to Invest Talk.

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[SPEAKER_09]: My name is Luke Guerrero and it's Friday, August, twenty-ninth, twenty-five.

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[SPEAKER_09]: It is the last Friday in August, the last trading day of August.

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[SPEAKER_09]: And the next time we see you here after the Labor Day holiday on Monday, it will already be September as we dive deep into the final month of the third quarter

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[SPEAKER_09]: of twenty twenty five.

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[SPEAKER_09]: But in reality, it does not matter.

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[SPEAKER_09]: The date, the month, the year, we here at Invest talk are here each and every day and we have been for decades with one mission that stays consistent over time.

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[SPEAKER_09]: And that mission, our goal is to have you leave this show each and every day a slightly better and slightly more informed investor.

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[SPEAKER_09]: But we can't do it alone.

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[SPEAKER_09]: We do bring you educational items.

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[SPEAKER_09]: We do bring you actionable material.

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[SPEAKER_09]: We bring you stories that matter.

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[SPEAKER_09]: But you contribute as well with your finance and investment questions on our any time listener line over on our YouTube channel on our Instagram page via email on iTunes reviews or hopefully most importantly when you call in live to this show.

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[SPEAKER_09]: Now, just a bit, we will talk about today's market performance and run down these show topics that we brought to the table.

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[SPEAKER_09]: But why don't we tackle this color question now?

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[SPEAKER_06]: Hi, and I have your thought on buying the APF for a long term investment.

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[SPEAKER_09]: F. I. W. Thank you so much.

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[SPEAKER_09]: F. I. W. Is a Feematic ETF.

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[SPEAKER_09]: It is the first trust water ETF.

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[SPEAKER_09]: It's got about two billion under management.

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[SPEAKER_09]: And essentially what it is trying to do here is give you thematic equity exposure.

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[SPEAKER_09]: It's been

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[SPEAKER_09]: around since May of, two thousand seven.

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[SPEAKER_09]: And it tracks the ISE Clean Edge Water Index.

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[SPEAKER_09]: So it focuses on companies that are substantially deriving their revenue from portable water, from wastewater and water infrastructure more broadly.

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[SPEAKER_09]: First thing you always look at.

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[SPEAKER_09]: Any time when you look at these funds, what is the expense ratio of fifty one basis points is what you are going to pay to hold this guy.

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[SPEAKER_09]: In terms of its market cap exposure, pretty split between large and mid-cats, forty-seven to the former forty-nine point eight to the latter, a little bit of small cap exposure, about two point three-four percent, and as you would expect,

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[SPEAKER_09]: Most of the exposure is going to be within industrials, within utilities, and within non-energy materials.

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[SPEAKER_09]: And a lot of its revenue comes to the United States.

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[SPEAKER_09]: It's seventy three point zero seven percent of its revenue comes from the United States.

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[SPEAKER_09]: Now let's look at its diversification here.

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[SPEAKER_09]: It looks like it's got thirty seven total holdings.

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[SPEAKER_09]: The top ten make up about forty point five percent of the portfolio.

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[SPEAKER_09]: So it's not too heavily weighted towards the top ten.

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[SPEAKER_09]: And how do they do this, right?

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[SPEAKER_09]: They do a equal waiting.

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[SPEAKER_09]: It has a tiered equal waiting scheme, so that will inherently boost the weight of small caps and microcap companies and midcap companies relative to large cap companies.

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[SPEAKER_09]: And so I would expect that the weighted average market cap here to be pretty low.

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[SPEAKER_09]: We have twenty two billion dollars.

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[SPEAKER_09]: Divide in a yield about one point one percent divin in a yield price to book.

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[SPEAKER_09]: Let's say mid tier sitting around four point one one four looking price rings about thirty two actually kind of on the growthy side here.

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[SPEAKER_09]: In terms of its performance here to date up twelve point five one percent

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[SPEAKER_09]: And a lot of that is from some pretty strong strength within the sector, within water infrastructure trends, on the back of energy production, on the back of cooling of databases, on the back of what's been driving the industrial space broadly over the past two and a half years.

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[SPEAKER_09]: I tend to

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[SPEAKER_09]: Be the type of person who thinks ETFs are excellent instruments for investment.

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[SPEAKER_09]: But when you get to these expensive, and fifty-one basis points is not super expensive, but it's certainly not cheap.

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[SPEAKER_09]: When you get to these expensive, a thematic ETFs tend to stay away because they highly concentrate a percentage of report folio.

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[SPEAKER_09]: in a sub-industry that is very, very tied to one theme.

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[SPEAKER_09]: That being said, as far as the Matic ETFs go, I would say this is in the media price range.

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[SPEAKER_09]: Certainly been around for a long time.

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[SPEAKER_09]: AUM, pretty solid, fun flows.

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[SPEAKER_09]: I'm actually positive over the past year, about five million in.

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[SPEAKER_09]: And because of its size, liquidity, you know, within an ETF pretty easy to get.

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[SPEAKER_09]: in and out of.

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[SPEAKER_09]: So if you're looking for a thematic water exposure, I think this is a fine way to do it, especially because it's over waiting those small and mid caps.

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[SPEAKER_09]: That is the first trust water ETF to your F, I, W. Now we're going to do a break.

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[SPEAKER_09]: Please remember, you can call anytime and leave your questions on the invest stock voice bank.

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[SPEAKER_09]: In fact, if you're listening via our live stream, or possibly on AM, twelve, twenty in the Bay Area, you can call me now at eight, eight, eight, and ninety nine, check.

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[SPEAKER_09]: Up next, we'll talk about today's market activity.

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[SPEAKER_03]: Okay, gotta get serious with my finances.

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[SPEAKER_03]: I've been working a long time and I know there's still gotta be more that I can do to build my wealth quicker.

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[SPEAKER_03]: I don't wanna have to work forever.

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[SPEAKER_08]: If you are not maximizing your employer-sponsored retirement plan, KPP Financial can help.

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[SPEAKER_08]: With our professional oversight, you can potentially enhance your investment performance by an average of three percent annually.

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[SPEAKER_08]: At KPP Financial, we provide a comprehensive four-of-one K-management program designed to optimize your retirement savings.

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[SPEAKER_08]: Our approach includes creating custom investment allocations tailored to your goals and risk tolerance.

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[SPEAKER_08]: That can make a big difference in your favor.

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[SPEAKER_03]: And maybe it's time to tune up my retirement plan.

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[SPEAKER_08]: For more information on how you can take control of your retirement savings, visit our website KPPFinancial.com KPPFinancial sounds good.

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[SPEAKER_04]: Every investor is working to build a secure financial future.

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[SPEAKER_04]: The more you learn about how the market works, the better your chances for success.

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[SPEAKER_04]: In Vestark, eight, eight, nine, nine chart.

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[SPEAKER_09]: As I mentioned today was the last trading day in the month of August.

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[SPEAKER_09]: So how, how did it go?

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[SPEAKER_09]: Well, broadly lower across the board, the Dow was down twenty basis points, S&P five hundred down sixty four basis points, Nasdaq down one point one five percent, small caps down fifty basis points.

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[SPEAKER_09]: on the day.

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[SPEAKER_09]: Stocks now logging a, I would say modest, weekly pullback despite the S&P, five hundred.

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[SPEAKER_09]: Closing of those fresh record highs of the six, five hundred dollar level yesterday.

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[SPEAKER_09]: What led the way down will big tech was mostly lower in video and Tesla, the notable the climbers on the day.

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[SPEAKER_09]: Other underperformers included semis, semi-caps softwares, machinery names, road and rail, and building products didn't do particularly well the day.

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[SPEAKER_09]: Some outperformers and apologies for the sirens going on outside, included energy, food and beverage, managed care, biotech, media, and insurance.

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[SPEAKER_09]: The bond side, you saw what you've been seeing for, well?

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[SPEAKER_09]: Sometime now, treasury is a bit mixed, the curve steepened yet again, the long end was up five basis points, the twenty or thirty year spread.

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[SPEAKER_09]: And it back near those multi year highs that we first started seeing earlier in the week.

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[SPEAKER_09]: At the same time, dog was flat, gold finished up one point two percent, and crude oil settled down ninety basis points.

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[SPEAKER_09]: The earnings calendar,

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[SPEAKER_09]: bit of an overhang today.

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[SPEAKER_09]: We had some high profile reporters across the board retail names, electronics names, and generally speaking, a bit disappointing.

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[SPEAKER_09]: Terrific headwinds also received a bit of attention, cat and gap guided for a higher tariff impact.

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[SPEAKER_09]: Also a bit more discussion in the financial press about companies increasingly passing costs of these tariffs onto consumers.

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[SPEAKER_09]: The underperformance of tech, which did drag the indices down and focus as well.

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[SPEAKER_09]: You saw some underwhelming results from some of those AI levered names.

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[SPEAKER_09]: You've seen recently, generally more AI scrutiny with the latest batch of headlines, highlighting something we've been talking about, which is the competition.

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[SPEAKER_09]: The concerns about Chinese competition.

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[SPEAKER_09]: elsewhere.

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[SPEAKER_09]: Fed Governor Waller came out with yet another round of rubbish comments calling for not only a twenty five based point rate cut in September, but also additional cuts over the next three to six months at a time when GDP is being revised upward.

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[SPEAKER_09]: Pretty quiet elsewhere I would say.

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[SPEAKER_09]: The economic calendar largely a non-factor core PC inflation was in line with expectations on a sequential annual basis.

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[SPEAKER_09]: Final Michigan University of Michigan consumer sentiment for August did drop a dip from the flash reading particularly in the expectations component.

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[SPEAKER_09]: inflation expectations dropped at both the one and five year time horizons, but the trade deficit, which has been a focus of this administration, widened yet again much more than expected to one hundred and three point six billion in July.

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[SPEAKER_09]: Looking ahead to next week as a reminder, Monday will be a best of show as it is the Labor Day holiday, but as for the rest of the week, big macro week, culminating with the August non-farm payrolls on Friday.

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[SPEAKER_09]: All right, let's keep things moving and answer a question that came in from the comment section of the Invest Hawk YouTube channel.

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[SPEAKER_09]: And this one is on a company called Three Eye Group.

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[SPEAKER_09]: The ticker is, you got it, three eyes.

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[SPEAKER_09]: So I, I, I could guess that one.

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[SPEAKER_09]: And the question is, I was trying to recession proof

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[SPEAKER_09]: My portfolio.

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[SPEAKER_09]: Sorry, I'm a computer's freezing a bit here.

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[SPEAKER_09]: It happens in the video live show.

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[SPEAKER_09]: Let's try to recession proof my portfolio.

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[SPEAKER_09]: What do you think about three eye group as a diversified defensive position?

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[SPEAKER_09]: Figure I, I, I, on the London Stock Exchange.

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[SPEAKER_09]: I hope you can access the technicals on this one.

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[SPEAKER_09]: If a US recession is looming, three eyes European focus and strengthen low cost consumer channels means it could perform as consumers trade down in favor discount options like action during economic stress.

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[SPEAKER_09]: Action is a private equity and three eyes major holding.

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[SPEAKER_09]: Okay, three eye is a British private equity firm pull something up over here.

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[SPEAKER_09]: It is a British private aid confirm as billions under management.

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[SPEAKER_09]: They've been operating for sixty-five years and they have several partnerships, investments with trusts, mutual funds, all sorts of businesses.

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[SPEAKER_09]: It is a forty-ish billion dollar market cap company.

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[SPEAKER_09]: You're today that's up twelve point seven, seven percent up fifty, or sorry, twenty-six point eight, two percent over the past fifty-two weeks.

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[SPEAKER_09]: Compared to its industry,

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[SPEAKER_09]: Well, I guess they really don't market against its industry here, but compared to the footsie all cap index, or all shares index.

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[SPEAKER_09]: It's not performed every year since, twenty, twenty, two.

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[SPEAKER_09]: It's currently within the mid range of its valuation over the past five years.

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[SPEAKER_09]: It's revenue, grown fifty seven point two percent on an annualized basis from one point six nine one billion in March of last year, projected to grow to six point eight six six eight billion in twenty twenty five.

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[SPEAKER_09]: margins, crazy margins.

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[SPEAKER_09]: But again, it's a levered private equity company.

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[SPEAKER_09]: The difficulty and the problem with, generally investing in private equity companies in a downturn is the reason they tend to perform better, or appear to perform better is because they don't have to mark their assets to market like public equities do, right?

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[SPEAKER_09]: And so you have this smoothing effect that you say, okay, over this ten year period that looked like a recession, volatility was lower.

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[SPEAKER_09]: Well, volatility was lower because so long as there is no run on capital within the fund itself,

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[SPEAKER_09]: They don't have to address the falling value of the holdings of that private equity fund.

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[SPEAKER_09]: And so, you know, is it the case that you're going to benefit from holding some of these private equity funds?

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[SPEAKER_09]: Maybe?

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[SPEAKER_09]: You know, generally speaking, I've seen research that return on private equity funds over long period of time, twenty-thirty years, doesn't necessarily beat public equities.

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[SPEAKER_09]: The problem is sometimes you can get trapped in a fund with toxic stuff and you just don't even note.

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[SPEAKER_09]: that is at three-eye group PLC, ticker I-I-I.

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[SPEAKER_09]: We're moving into a break, so to come my main focus point, and more answers to your questions, I encourage you to call now at eight, eight, eight, and ninety-nine chart.

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[SPEAKER_04]: You are listening to an invest talk, best of caller questions compilation program.

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[SPEAKER_04]: Your comments and questions are always welcome, call anytime, eight, eight, ninety nine chart.

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[SPEAKER_04]: That's eight, eight, nine, nine, CHART.

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[SPEAKER_00]: Hi, this is Elizabeth from Washington DC.

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[SPEAKER_00]: I came across a website called Quiver Quantitative.

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[SPEAKER_00]: Their brand is to trade like an insider.

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[SPEAKER_00]: They track

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[SPEAKER_00]: politicians and congress members and their trading patterns.

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[SPEAKER_00]: I was just curious about your perspective on that and they let you track JD bands or Marjorie Taylor Green or Nancy Pelosi and congress trading patterns.

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[SPEAKER_00]: And I was curious if you think that's a good strategy to try to benefit from their insider knowledge and sort of get ahead of the game by following their moves or if you think that's a bad strategy.

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[SPEAKER_00]: I would just love your opinion on their trading patterns and if that's a good strategy to follow.

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[SPEAKER_00]: Thank you so much.

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[SPEAKER_00]: I'll be listening for your answer on the show.

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[SPEAKER_09]: So that's a good question.

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[SPEAKER_09]: I think oftentimes people are very interested in how insiders and companies or in government are trading.

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[SPEAKER_09]: Now I don't know this specific website, so I'm not going to comment on its ability to actually diagnose what's going on in terms of how people are trading, but I will say that it is just one of many signals.

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[SPEAKER_09]: that you would want to pay attention to, right?

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[SPEAKER_09]: It doesn't necessarily mean that there is going to be a definitive move in either direction.

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[SPEAKER_09]: If someone from Congress is buying a stock, right?

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[SPEAKER_09]: If you look at all people in Congress, there are some people who have made some very portraits.

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[SPEAKER_09]: I would also say that as far as I'm aware, generally, disclosure is maybe within a forty five day period when the trades are made, correct me if I'm wrong at home, but you're not going to know as they're making the trades.

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[SPEAKER_09]: Additionally, one of the biggest drivers of Nancy Pelosi and your husband making a lot of money in the past couple years from trading was like buying in video calls.

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[SPEAKER_09]: And at a time when everybody else was buying and video calls as well.

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[SPEAKER_09]: And so there is certainly, and don't confuse me with somebody who thinks that, you know, politicians should be able to do this.

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[SPEAKER_09]: I think that using your inside information should be completely banned to trade stocks.

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[SPEAKER_09]: I don't think they should be able to do that.

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[SPEAKER_09]: I don't think that a great strategy is to always take it as a given that if these people are buying companies, well, then those companies are going to outperform.

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[SPEAKER_09]: And so, as always, use it as just another piece of information when you're doing your research and making your informed investment decisions.

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[SPEAKER_09]: Thanks for the call.

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[SPEAKER_06]: Thank you, Dad, for one quick and I have a question about CD.

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[SPEAKER_06]: If I purchase a three year CD, but I get a tax document at the end of each of the three years or what I just get in the cumulative one at the end of the third year.

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[SPEAKER_08]: Thanks.

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[SPEAKER_08]: You should get a tax document every year.

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[SPEAKER_08]: It's income to you.

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[SPEAKER_08]: You earn it and you have to be taxes on it.

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[SPEAKER_08]: So it's honestly like a bond if you buy a bond, you buy a discount, and those rise over time, there's some complexities there in a taxable account.

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[SPEAKER_08]: But for CD, it's very straightforward.

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[SPEAKER_08]: You get a yield, get that paid out to you throughout that time period, and each year you get taxed on that income.

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[SPEAKER_08]: So yeah, it's not at the end of the term of the CD.

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[SPEAKER_08]: That could be a no interest CD, right?

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[SPEAKER_08]: We're not paying you out of an interest rate.

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[SPEAKER_08]: It's like a zero cup coupon bond.

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[SPEAKER_08]: You buy it at discount and then you eventually get the money back at maturity.

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[SPEAKER_08]: I've seen a lot of those CDs.

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[SPEAKER_08]: Those tend to be fairly rare.

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[SPEAKER_08]: It's most CDs pay out an interest rate.

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[SPEAKER_08]: But yeah, you're paying taxes each year on an interest rate.

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[SPEAKER_07]: Just wanted to ask you guys kind of a general money to ask real estate question, I guess.

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[SPEAKER_07]: I'd carry out to be like, you know, in today's environment, I just wanted you guys to talk a little bit on cash out refinancing.

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[SPEAKER_07]: And I was also curious, if you were looking to create some freedom income to stay purchasing investment property, is there like any sense or any scenario where borrowing against a four or one or a four fifty seven makes sense, especially if you have twenty twenty five thirty years left in your career, to make that money up,

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[SPEAKER_07]: So just wanted to shoot that your way, get you guys a pretty insect block, love your shells, of granite.

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[SPEAKER_09]: So let's start with the cash out refinance equation.

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[SPEAKER_09]: So for those of you who don't know a

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[SPEAKER_09]: Cash out refinance is where you take out a larger loan on your home, you refinance your mortgage.

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[SPEAKER_09]: It replaces your existing mortgage with a new bigger one and then you take out the difference in cash.

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[SPEAKER_09]: So you borrow more than you owe on your home and the excess goes to a lump sum payment to you and then you pay that off over time just like you would your mortgage.

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[SPEAKER_09]: Oftentimes people use it for debt consolidation because they make it lower interest rates, home improvement, large expenses, maybe this investment property,

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[SPEAKER_09]: When so the risk is it increases your balance and therefore increases your payments.

19:31.424 --> 19:42.114
[SPEAKER_09]: If your financial circumstances change such that you can no longer afford it, well then you end up in some hot water, maybe your home's value drops, you took out too much of a loan, then you could end up having negative equity, right?

19:42.134 --> 19:48.580
[SPEAKER_09]: You may own more than you have, or rather than the house's worth.

19:49.501 --> 19:53.505
[SPEAKER_09]: And so tune extend as long as you're not doing it too dramatically, right?

19:53.525 --> 19:55.246
[SPEAKER_09]: This is also a time of economic uncertainty.

19:55.586 --> 19:56.527
[SPEAKER_09]: I don't know what your job is.

19:56.567 --> 19:58.149
[SPEAKER_09]: I don't know how secure that is.

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[SPEAKER_09]: You could find yourself if really you have real assets start to nose dive downward that you have negative equity on your home.

20:06.336 --> 20:07.497
[SPEAKER_09]: So that's certainly something to consider.

20:07.517 --> 20:12.361
[SPEAKER_09]: But in the right circumstances, they can be useful as can taking a loan out on your four one.

20:12.381 --> 20:12.621
[SPEAKER_09]: Okay.

20:13.182 --> 20:14.863
[SPEAKER_09]: You know, I actually

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[SPEAKER_09]: You know, like this for somebody who has a secure job that they won't be leaving because again, if you do leave and you can't pay back the loan immediately, you do have to pay a ten percent penalty.

20:29.225 --> 20:31.727
[SPEAKER_09]: If under fifty nine and a half, it is a taxable distribution.

20:32.307 --> 20:42.476
[SPEAKER_09]: But the reason why I actually like for one K loans for people that aren't going to leave their job can pay it off is because interest rates tend to be lower, but also you're paying back yourself.

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[SPEAKER_09]: rather than paying back to a bank borrowing from another entity.

20:47.941 --> 20:50.663
[SPEAKER_09]: And so if you have a short term need, you can repay it quickly.

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[SPEAKER_09]: You are a career safe and secure.

20:52.525 --> 20:57.789
[SPEAKER_09]: They can be an excellent tool just as cash out refinances if you use them correctly.

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[SPEAKER_04]: Thanks for the call.

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[SPEAKER_04]: This is an invest talk best of caller questions compilation program your comments and questions are always welcome call anytime eight eight eight ninety nine chart that's eight eight nine nine CHA RT

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[SPEAKER_10]: This is a special invest talk, best of caller questions, compilation program.

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[SPEAKER_10]: Remember, the invest talk phone lines never close.

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[SPEAKER_10]: Please call with questions.

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[SPEAKER_10]: Eight a day, ninety nine chart.

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[SPEAKER_13]: I had a question regarding how to judge the health of dividends and whether a company can sustain it or not.

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[SPEAKER_13]: I know a lot of folks who buy the dividend payout ratio, but I also wanted to ask about free cash flow to see how you could judge if a dividend is sustainable based on those two criteria.

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[SPEAKER_13]: Specifically, I was looking at Pfizer.

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[SPEAKER_13]: I know it's been beaten down.

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[SPEAKER_13]: And also, I guess, another variable that would enter that equation for Pfizer would be apparently supposed to be saving seven billion over the next couple years, at least that's what they're saying.

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[SPEAKER_13]: But yeah, if you could just kind of talk about how a few measures are held companies that consistently take their victims and mothers are able to sustain it.

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[SPEAKER_08]: This is a company that says seven half percent dividend.

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[SPEAKER_08]: That is not the issue, right?

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[SPEAKER_08]: The issue here is not just that it's paying as a high dividend yield because high dividend yields in the other themselves aren't automatic notes, right?

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[SPEAKER_08]: It can be other reasons, usually confounding factors that bring you to saying that that yield is too high or that yield is likely to be cut.

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[SPEAKER_08]: Now, the first thing that you have to pay attention to is the debt, right?

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[SPEAKER_08]: Because when a company has a lot of debt on its balance, it needs a service status.

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[SPEAKER_08]: Otherwise, the company goes by by.

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[SPEAKER_08]: It does not care about you, the shareholder.

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[SPEAKER_08]: It cares about its bondholders.

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[SPEAKER_08]: Number one, because they have the highest claim on your assets, other business.

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[SPEAKER_08]: And so when a company has a lot of debt, your dividend can easily be cut and will easily be cut to pay those bondholders.

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[SPEAKER_08]: And so that's the number one factor you have to watch out for is debt on its balance sheet.

23:31.083 --> 23:36.285
[SPEAKER_08]: When there's no debt and a company pays a dividend, there's a lot of levers that can be pulled, right?

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[SPEAKER_08]: You can borrow more money in order to continue to pay out that dividend.

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[SPEAKER_08]: And a lot of companies do do that over time.

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[SPEAKER_08]: And ultimately, that is a road to ruin.

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[SPEAKER_08]: It's a road to too much leverage.

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[SPEAKER_08]: And eventually, down the line, maybe it's a decade or two down the line, but that dividend being cut.

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[SPEAKER_08]: So you don't want a company taking on debt to paid dividend.

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[SPEAKER_08]: And that's where the cash flow goes in.

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[SPEAKER_08]: It comes in.

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[SPEAKER_08]: And that's what you were talking about is, hey, cash flow, whether that's positive or negative, is enough to pay the dividend.

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[SPEAKER_08]: And that's where not just payout ratio comes in, but cash dividend payout ratio.

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[SPEAKER_08]: I mean, are they producing a cash flow in the business to actually pay that dividend?

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[SPEAKER_08]: Because we look at just payout ratio.

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[SPEAKER_08]: That's earnings.

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[SPEAKER_08]: But as you know, earnings can be manipulated a lot more.

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[SPEAKER_08]: And companies don't pay.

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[SPEAKER_08]: You in earnings, they pay you in cash, okay?

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[SPEAKER_08]: And that's why cash flow is so important.

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[SPEAKER_08]: So yes, the balance sheet is number one.

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[SPEAKER_08]: That's the number one thing you have to consider is how sustainable is that balance sheet?

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[SPEAKER_08]: Are it is a balance sheet highly levered?

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[SPEAKER_08]: Or do they have a very modest small amount of debt?

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[SPEAKER_08]: Number two, is that cash flow?

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[SPEAKER_08]: Do they have the consistent money flowing in to pay you the shareholder?

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[SPEAKER_08]: And number three is the cyclicality of their business, the type of business that they might have.

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[SPEAKER_08]: Is it a business that abs and flows or does there a strong consistency to it?

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[SPEAKER_08]: That's why, you know, when you look at, quote unquote, blue chip names, you think of proctor and gamble and coke and, you know, these big names that, you know, they're not task growers, but, you know, the business rolls in year after year, kind of no matter what the economy's doing.

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[SPEAKER_08]: Now, that doesn't just apply to big, hundred billion dollar companies, it can also apply to manage small caps.

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[SPEAKER_08]: There are plenty of smaller names that serve niches, right?

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[SPEAKER_08]: That are not cyclical.

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[SPEAKER_08]: They're not growing a lot because that niches is small, but they're able to have consistency of the cash flow consistency of their earnings through the economic cycle.

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[SPEAKER_08]: And there's not a lot of worries of disrupting their ultimate business.

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[SPEAKER_08]: and their business model.

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[SPEAKER_08]: That's another factor.

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[SPEAKER_08]: It's not just a cyclicality of that business, but is it in the tech space where their leadership can be usurped by a competitor very easily that comes out with a new more innovative product, right?

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[SPEAKER_08]: You have to look at that as well.

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[SPEAKER_08]: So what are the risks to that business over the longer term?

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[SPEAKER_08]: So that's the general framework to that you need to unpack whether a dividend is sustainable or not.

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[SPEAKER_05]: I was just wondering, I took some profits and have been sitting on maybe thirty, thirty, five percent of my portfolio in cash and was just wondering, when do you think would be the best time to consider putting that back into the market?

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[SPEAKER_05]: Should I be slowly doing that now?

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[SPEAKER_05]: Should I wait till later in the summer?

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[SPEAKER_05]: Just whatever advice you can give me on that, I would appreciate.

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[SPEAKER_05]: Thank you.

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[SPEAKER_09]: So it's difficult to give you a direct

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[SPEAKER_09]: Answer to an important question.

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[SPEAKER_09]: And that is because I don't know anything about you.

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[SPEAKER_09]: I don't know how much of your portfolio is in cash.

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[SPEAKER_09]: I don't know how old you are, which means how long your time horizon is.

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[SPEAKER_09]: I don't know a type of account you have.

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[SPEAKER_09]: And so I'll give general advice here.

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[SPEAKER_09]: I have said over the past months.

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[SPEAKER_09]: and more recently that it can be our strategies currently have higher elevated cash levels because in times of market volatility, you benefit from being able to take advantage of those big downward movements that become more possible.

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[SPEAKER_09]: And so, you know, let's assume that you have more than an elevated cash position.

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[SPEAKER_09]: Let's say you have more than fifty percent of your portfolio in cash.

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[SPEAKER_09]: Well, have you of a long time horizon?

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[SPEAKER_09]: It makes the most sense for you to reinvest in the market while the market is dipping the reason being that if you pull out on a chart of US market over time, it in the long run moves upward and there is a higher probability that it will move upward to be longer your time horizon is then you'll have a positive investment experience.

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[SPEAKER_09]: And you know, I talked to a client about this today in that

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[SPEAKER_09]: Just because the market is down does not mean there is not a possibility positive performance.

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[SPEAKER_09]: The market is down five percent in a year.

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[SPEAKER_09]: You can certainly have positive performance.

27:59.015 --> 28:00.435
[SPEAKER_09]: The market is down twenty percent in a year.

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[SPEAKER_09]: They're oftentimes is nowhere to run and hide.

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[SPEAKER_09]: But in general,

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[SPEAKER_09]: All of this uncertainty, all these market fluctuations, all the volatility, doesn't mean there aren't any opportunities out there.

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[SPEAKER_09]: It just narrows the opportunity set of it, meaning that the rules by which you invest for companies with strong balance sheets, for companies with robust revenue growth, for companies with strong margins, just has to be more strict in this type of market environment.

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[SPEAKER_09]: And so overall, I would say if you took some profits, which you should certainly do,

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[SPEAKER_09]: All the time, regardless of if the market is moving the way it has over the past month or so, the best time to start to reinvest is now.

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[SPEAKER_09]: Not by fully investing all of your cash in once, but by dollar cost averaging or value cost averaging back into the market.

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[SPEAKER_09]: So long as your time horizon is long enough to take advantage of the benefits of long term investing.

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[SPEAKER_09]: Very, very important question.

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[SPEAKER_09]: Thanks for the call.

28:56.413 --> 28:59.195
[SPEAKER_04]: Have you heard about the new Invest Talk Store?

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[SPEAKER_04]: That's right, you'll find great merch for the Savvy Investor.

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[SPEAKER_04]: It's all there for you now at InvestTalkStore.com.

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[SPEAKER_08]: Now, I always struggle this question.

29:21.492 --> 29:24.415
[SPEAKER_08]: And Stephen, I had a little bit of a difference of a philosophy.

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[SPEAKER_08]: And that's okay.

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[SPEAKER_08]: I get this all the time, it's like, oh, Steve said one thing, you said another thing, and Luke said one thing, you see another thing with different sub opinions.

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[SPEAKER_08]: That can happen.

29:35.084 --> 29:40.668
[SPEAKER_08]: The conservative way to look at it, when it comes to Steve's viewpoint, was always

29:41.709 --> 29:46.011
[SPEAKER_08]: Find an index fund, you get instant verification, and you can follow the markets from there.

29:46.411 --> 29:54.634
[SPEAKER_08]: And I think that's fine, for certain people, if their goal is not to ever make another type of a decision for themselves, right?

29:54.674 --> 29:55.374
[SPEAKER_08]: The investment front, right?

29:55.394 --> 29:59.175
[SPEAKER_08]: They're always going to index, they're just going to keep it simple, and that can be fine.

29:59.855 --> 30:09.599
[SPEAKER_08]: But if you want to learn, I always say, by a position, by a company, by a company you like, you know, do a little research, learn your lessons.

30:10.772 --> 30:35.705
[SPEAKER_08]: your lessons will come cheap because you don't have a lot of money better than you build it up over thirty years then you get bored and you start trying to buy individual stocks and make a bunch of mistakes and you know you did that with hundreds of thousands of dollars sell a bigger fan of your new your eighteen your working with five hundred dollars now commissions are free you know back in the day you know commissions would be eight ten fifteen dollars and eat up

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[SPEAKER_08]: a lot of profit on anyone trading now, commissions are effectively free.

30:40.395 --> 30:52.765
[SPEAKER_08]: You know, go buy a share here, go buy a share there, start to diversify your portfolio, continue to save and build over time and learn about companies, industries, how earnings events, dividends happen, all of this.

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[SPEAKER_08]: And the best way to do it is doing it yourself.

30:55.948 --> 31:02.032
[SPEAKER_08]: Now that's if you want to go down that journey, you want to learn, you want to get better, you want to be savvy, or you want to just index.

31:02.899 --> 31:03.960
[SPEAKER_08]: different strokes, different folks.

31:04.480 --> 31:09.724
[SPEAKER_08]: So it's kind of up to you, but I'm the bigger fan of the individual position half.

31:10.305 --> 31:10.825
[SPEAKER_08]: Thanks for the call.

31:10.845 --> 31:18.511
[SPEAKER_09]: Looks like we've another live called Jacob from Santa Rosa, asking about gold and listening on AM-twelve-twenty.

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[SPEAKER_14]: I had a question about silver as a relate to gold and it's been run up.

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[SPEAKER_14]: I knew it was recently that the gold is just silver ratio has gone past one hundred, which from my understanding.

31:31.413 --> 31:34.501
[SPEAKER_14]: I've only happened about three times in the past one hundred years.

31:35.497 --> 31:54.652
[SPEAKER_09]: So we've seen over time over the past year or so, really year and a half or so, that there has been a divergence from this traditional relationship between gold and silver, where gold tends to climb and appreciate and price pretty quickly, and then silver tends to track that in a more step-wise way.

31:55.092 --> 32:02.318
[SPEAKER_09]: And so with past year or so, what you've seen is really a disconnection of dislocation from this relationship, and I think that it has to do with

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[SPEAKER_09]: What they really are used for, right?

32:05.381 --> 32:07.123
[SPEAKER_09]: Gold is a safe haven asset.

32:07.163 --> 32:11.449
[SPEAKER_09]: It has been seen as one for some time at this point, right?

32:11.749 --> 32:16.895
[SPEAKER_09]: The US government used to mark there a really control for the price of the dollar relative to gold.

32:16.915 --> 32:19.678
[SPEAKER_09]: A lot of countries used to do that for the currencies as well.

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[SPEAKER_09]: And so gold tends to respond faster to inflation and monetary policy and fiscal policy as well.

32:28.169 --> 32:40.560
[SPEAKER_09]: It also is far more because of this, liquid in terms of its trading through ETFs, their ETFs are more liquid because of the volume and the physical gold is more liquid than physical silver as well.

32:41.081 --> 32:46.906
[SPEAKER_09]: And so in uncertain times, like we have now, high levels of uncertainty, people tend to flock towards gold.

32:47.466 --> 32:54.392
[SPEAKER_09]: Now, silver on the other hand doesn't really offer that kind of historical, safe haven levels at the same levels.

32:54.412 --> 32:55.974
[SPEAKER_09]: It has more of an industrial use.

32:56.634 --> 33:04.061
[SPEAKER_09]: And so over time, over the past couple of years, what we've seen is that divergence is likely due towards silver being more of that industrial metal.

33:04.701 --> 33:08.305
[SPEAKER_09]: And having those industrial uses such that when the economic outlook is weak,

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[SPEAKER_09]: The price of it doesn't appreciate to the degree that gold does by its safe haven pressures metal nature.

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[SPEAKER_09]: And so that's something we've seen and something we're likely I would expect to see continuing moving forward.

33:21.498 --> 33:24.741
[SPEAKER_09]: That is the relationship between silver and gold, a great question.

33:24.861 --> 33:25.662
[SPEAKER_09]: Thanks for calling Jacob.

33:26.342 --> 33:30.825
[SPEAKER_04]: On radio, on YouTube, streaming live on at vestalk.com.

33:31.006 --> 33:37.010
[SPEAKER_00]: My question today is about HDMI equipment services and for our podcast subscribers.

33:37.390 --> 33:46.317
[SPEAKER_04]: If you're willing to take the risk in vestalk, if you're okay with that risk, with host and financial advisor, Justin Klein and that volatility.

33:46.677 --> 33:47.037
[SPEAKER_04]: Go for it.

33:47.297 --> 33:50.700
[SPEAKER_04]: And co-host and portfolio manager, Luke Guerrero.

33:51.040 --> 33:52.401
[SPEAKER_04]: This company is falling like a rock.

33:52.461 --> 33:54.723
[SPEAKER_04]: It's down, fifty-two percent in vestalk.

33:56.864 --> 33:59.605
[SPEAKER_04]: Every body wants a secure financial future.

33:59.866 --> 34:06.469
[SPEAKER_04]: Richard, you have a question about TOL, but getting there takes strategy, discipline, and the right information.

34:06.649 --> 34:08.370
[SPEAKER_08]: What are what you think of the price of it?

34:08.550 --> 34:14.373
[SPEAKER_08]: Go to Chris in Maine, looking at I, E, X. Hey Justin, I own it.

34:14.753 --> 34:16.014
[SPEAKER_13]: Just seeing what you thought of it.

34:16.214 --> 34:19.596
[SPEAKER_04]: Invest talk is made better by listener contributions.

34:20.056 --> 34:22.337
[SPEAKER_04]: So don't forget to call, eight, eight, nine, chart.

34:24.741 --> 34:27.423
[SPEAKER_02]: Hi guys, this is Kent and Texas again.

34:28.123 --> 34:33.266
[SPEAKER_02]: I'm calling for us old guys in their seventies that are getting along in the tooth.

34:33.687 --> 34:49.697
[SPEAKER_02]: What I want to know is what y'all recommend us as far as our spouses like mine of over fifty years and as far as involving individual stocks in the ETFs or mutual funds, y'all kind of tell us to

34:50.192 --> 34:59.878
[SPEAKER_02]: get farther into the ETL, some mutual funds, and out of individual stocks when they're, where they're far down the road, the white cluster to the end, and then we all are the beginning.

35:00.498 --> 35:02.339
[SPEAKER_02]: All right, my friends, that's the question.

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[SPEAKER_02]: Thanks a lot, bye-bye.

35:03.300 --> 35:16.768
[SPEAKER_09]: Well, that's a great question, because hopefully for each and every one of you, this becomes an important topic, meaning that you have reached the point in your life where you were trying to preserve capital, where you're spending rather than saying.

35:17.389 --> 35:18.750
[SPEAKER_09]: And so as you move into that time,

35:19.530 --> 35:20.451
[SPEAKER_09]: I think two things happen here.

35:20.491 --> 35:23.513
[SPEAKER_09]: You want to reduce your risk on the equity side.

35:23.673 --> 35:36.262
[SPEAKER_09]: And that means investing in more value oriented businesses, ETFs, which are generally hopefully broadly diversified ones that have low basis point expense ratios, but also move more towards fixed income.

35:37.042 --> 35:38.844
[SPEAKER_09]: You should be thinking about preservation.

35:39.465 --> 35:44.529
[SPEAKER_09]: Equities are in the long run for capital growth, but they can be far more volatile than bonds.

35:44.570 --> 35:45.290
[SPEAKER_09]: We all know this.

35:45.971 --> 35:51.296
[SPEAKER_09]: And so as you're approaching retirement, as you're approaching, we need to actually be spending rather than saving.

35:51.937 --> 35:58.063
[SPEAKER_09]: You want to glide path that allocation more towards fixed income and further away from risky equities.

35:59.892 --> 36:02.515
[SPEAKER_04]: You've got two for the price of one.

36:03.056 --> 36:09.704
[SPEAKER_04]: Justin Klein and Luke Guerrero are here, and they're taking your financial investment questions now.

36:15.103 --> 36:20.065
[SPEAKER_09]: From time to time, we receive investor questions via web forms from investor.com.

36:20.085 --> 36:21.925
[SPEAKER_09]: And here's one that came in earlier.

36:21.945 --> 36:28.207
[SPEAKER_09]: It says, hello, long time listener, heard a question a few days ago on your podcast in regards to education plans.

36:28.728 --> 36:35.350
[SPEAKER_09]: I have a guarantee education tuition plan in Washington State that my parents made a soon after I was born, nineteen ninety five.

36:36.200 --> 36:40.182
[SPEAKER_09]: The plan is soon to roll over and become income for myself in twenty twenty nine.

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[SPEAKER_09]: You mentioned rolling it into a Roth.

36:42.543 --> 36:48.406
[SPEAKER_09]: How did I go about doing that since I'm in the process of achieving a bachelor in social work in twenty twenty eight.

36:49.046 --> 36:51.207
[SPEAKER_09]: And so we haven't mentioned this before.

36:51.367 --> 36:59.952
[SPEAKER_09]: This is a relatively new thing where you are potentially eligible to roll your unused funds from a five twenty nine plan.

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[SPEAKER_09]: into a Roth IRA.

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[SPEAKER_09]: Now, there's some rules here, right?

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[SPEAKER_09]: To be eligible, your five twenty nine has to be open for at least fifteen years in your case.

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[SPEAKER_09]: My quick math tells me that it has.

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[SPEAKER_09]: The funds also must be in an account where your name is the beneficiary.

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[SPEAKER_09]: Lastly, any contributions made in the past five years.

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[SPEAKER_09]: cannot be rolled over.

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[SPEAKER_09]: And so the steps you want to take is confirm you're the five, twenty nine benefit share.

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[SPEAKER_09]: Ensure you have earned income in the role over a year and coordinate with a plan administrator to process a direct roll over to a Roth IRA in your name.

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[SPEAKER_09]: It can be a complicated process.

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[SPEAKER_09]: If your parents or if you have a tax person or financial advisor, I certainly recommend consulting with them because again, it can be a little bit complicated.

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[SPEAKER_09]: Thanks for submitting that web form.

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[SPEAKER_04]: You are listening to an invest talk, Vest of Caller Questions compilation program.

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[SPEAKER_04]: Your comments and questions are always welcome.

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[SPEAKER_04]: Call anytime.

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[SPEAKER_04]: Eight, eight, ninety nine chart.

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[SPEAKER_04]: That's eight, eight, nine, nine, CHART.

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[SPEAKER_04]: This is an invest talk best of caller questions compilation program.

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[SPEAKER_04]: Your comments and questions are always welcome.

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[SPEAKER_04]: Call anytime.

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[SPEAKER_04]: Eight, eight, eight, ninety nine chart.

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[SPEAKER_04]: That's eight, eight, eight, nine, nine, CHART.

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[SPEAKER_01]: I have a question regarding your remark that USA is turning into an emerging market.

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[SPEAKER_01]: which you said following my question on the emerging markets bond ETF.

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[SPEAKER_01]: I was wondering if you could expand on that.

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[SPEAKER_01]: Since it means a lot when I think about investing in American assets, you know, there's no way I can invest in you as assets without taking the currency risk in regards to the dollar.

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[SPEAKER_01]: And as you would say, the government in America seems to be becoming increasingly likely to

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[SPEAKER_01]: undermine the stability of the economy or stock market.

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[SPEAKER_01]: But let me hear what you think of a very much appreciated.

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[SPEAKER_01]: Thank you for your good show.

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[SPEAKER_08]: Well, I say that we're becoming more like an emerging market because of the way markets are reacting to a weaker economy.

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[SPEAKER_08]: You know, before you used to be, hey, the market sells off.

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[SPEAKER_08]: There's a fight to safety.

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[SPEAKER_08]: Money flows into the dollar goes up.

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[SPEAKER_08]: Money flows into treasuries.

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[SPEAKER_08]: Braids go down treasuries rally, right?

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[SPEAKER_08]: That's, that's, that's the, the flight to safety type of

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[SPEAKER_08]: reactionary mechanism that happens in an economy that still has long-term tailwinds, that has rule of law, that has the stability that the United States kind of has had for, you know.

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[SPEAKER_08]: my lifetime and beyond.

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[SPEAKER_08]: In typical emerging markets where there's a lot of debt, a weaker economy actually does the opposite, right?

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[SPEAKER_08]: Money flows out of that economy because there's less, there's more concern over potential economic collapse, a political collapse, right?

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[SPEAKER_08]: Which you've seen throughout the years in many of these emerging markets like Brazil and

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[SPEAKER_08]: that many in Asia, et cetera.

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[SPEAKER_08]: So when you have a cell off in the markets that we had, post liberation day, early last month, and originally rates are out, rates fell on's rallied for thirty six hours roughly, and then they reversed and rates went up and the dollar went down.

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[SPEAKER_08]: So it was very different type of reaction than we're used to hearing the states.

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[SPEAKER_08]: And that's because our fiscal situation, along with a political environment that is becoming more polarized, more toxic, more volatile, I think all of that lens to an environment that is more akin to an emerging market, as opposed to a stable ecosystem that has been

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[SPEAKER_08]: kind of the basis for the United States for a long time, right, many decades.

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[SPEAKER_08]: And so that's how it's shifting into a more of an emerging market economy.

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[SPEAKER_15]: Hi, from this, Dick from Hawaii.

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[SPEAKER_15]: Could you tell me what you used to determine price support?

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[SPEAKER_15]: Do you use a simple moving average?

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[SPEAKER_15]: And if so, what units do you use such as the one under day moving average?

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[SPEAKER_15]: But do you draw or use support lines or some other method?

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[SPEAKER_15]: It would be helpful.

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[SPEAKER_15]: I know you mentioned on the show, but it would be helpful to know how you determine that.

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[SPEAKER_15]: And very much enjoy your show.

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[SPEAKER_15]: Thank you.

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[SPEAKER_15]: Bye.

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[SPEAKER_08]: Well, it's a great question.

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[SPEAKER_08]: And I am going to on the Army YouTube channel.

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[SPEAKER_08]: I'll show you a chart here, and it's the S&P.

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[SPEAKER_08]: But I use the hundred a, two hundred a, fifty, and the twenty-day moving averages.

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[SPEAKER_08]: So those are the four moving averages that I use

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[SPEAKER_08]: And those often are support levels.

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[SPEAKER_08]: And so that's number one, those of the simplest other support levels can be what call Fibranacci retraces.

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[SPEAKER_08]: They're kind of natural Evan flows.

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[SPEAKER_08]: And if you look at Fibranacci is a mathematician from

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[SPEAKER_08]: I think the Fourteenth Century and what he observed was that in nature there are natural movements and ratios that appear regularly whether that's the spiral in a rose or how hurricanes move, etc.

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[SPEAKER_08]: These are just natural patterns that we observe and you observe the markets as well.

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[SPEAKER_08]: That's another tool that we use.

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[SPEAKER_08]: And if you're looking at the charts on YouTube, you'll see I have a free trace tool drawn here on the S&P.

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[SPEAKER_08]: Those are aspects you can also look at previous bottom.

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[SPEAKER_08]: So for example, if we ever go back to our April lows than the S&P, that will be support.

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[SPEAKER_08]: Support levels usually hold the first second time.

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[SPEAKER_08]: But as you hit on those support levels multiple times, it does tend to weaken and eventually break.

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[SPEAKER_08]: So you want to take support levels with a grain of salt, as well as you also want to line up different support levels.

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[SPEAKER_08]: So now there's four levels would be a previous breakout level.

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[SPEAKER_08]: So if a market or stock consolidated in a previous range and a broke out of that range and then returned back to that range,

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[SPEAKER_08]: The high end of that previous range would be support.

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[SPEAKER_08]: So there are various area-free-use ways to recharge and find support levels for different asset classes.

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[SPEAKER_08]: Thanks for the call.

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