[SPEAKER_12]: This is a special in Vestock, best of caller questions compilation program.

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[SPEAKER_11]: We're going to talk to John from O'Rindek, California.

[SPEAKER_11]: Are you doing dog?

[SPEAKER_11]: Hi there.

[SPEAKER_17]: Really well.

[SPEAKER_17]: I have a bond that was just called, and so I now have some money I'm going to need to reinvest in some bonds, and I have another one, uh, maturing at the end of July that I'll once again have to deal with having to reinvest it.

[SPEAKER_17]: Would you recommend going with non-collable bonds as I'm trying to replace these considering

[SPEAKER_17]: rates may be coming down.

[SPEAKER_11]: Well, if you have bonds that are callable, they can be replaced if rates drop considerably.

[SPEAKER_11]: Now, the bigger question is, will they have the ability to refinance at lower rates?

[SPEAKER_11]: Just because the Fed cuts rates does not necessarily mean that bond rates on the

[SPEAKER_11]: Remember, that's just the short end.

[SPEAKER_11]: And most bond issuance happens at least four years out, you know, three to four in that range and oftentimes, you know, 5, 6, 7, 10 years out and beyond.

[SPEAKER_11]: So there's no guarantee that rates on those maturitys will fall dramatically, especially if

[SPEAKER_11]: lower bond, lower fed funds rate, shall we say sparks say you further decline in the dollar and worries about inflation, et cetera.

[SPEAKER_11]: I could see the yield curve steepening dramatically in that sense.

[SPEAKER_11]: So, you know, I would focus more on, I'd be fine with a callable bond.

[SPEAKER_11]: I don't really have a lot of issues with that, because I don't necessarily think that it's going to

[SPEAKER_11]: be something that is a huge risk going forward.

[SPEAKER_11]: Now it does depend on the name.

[SPEAKER_11]: It depends on what rate it's paying, et cetera.

[SPEAKER_11]: Obviously, if that coupon rate is very high, then yeah, maybe I would avoid a callable note on Fort Fort with a high coupon.

[SPEAKER_11]: But if it's around 4.5% or so, in that range, 6%, I probably wouldn't be too worried about the callable nature of a bond.

[SPEAKER_17]: do you as KPP, do you have access to different funds than you as consumers?

[SPEAKER_11]: Yeah, we do.

[SPEAKER_11]: So there are different platforms that aggregate the bonds from institutions and bond demand for sales and purchases.

[SPEAKER_11]: And so not only do we access to different bonds than average retailer has access to, but we often get better prices as well.

[SPEAKER_11]: So we use different platforms or multiple platforms that we can and do use.

[SPEAKER_11]: Market access is a good example to one,

[SPEAKER_11]: it's a public company so you can kind of look at it in KTX.

[SPEAKER_11]: So that's where institutions want to kind of aggregate purchases and sales and you get better pricing on those platforms and better opportunities kind of before the average investor gets it.

[SPEAKER_11]: So simple answer to your question is yes, is it dramatically more?

[SPEAKER_11]: Is it double triple quadruple?

[SPEAKER_11]: This size of

[SPEAKER_11]: Yeah, I'm sure.

[SPEAKER_17]: All right.

[SPEAKER_17]: Thank you very much.

[SPEAKER_17]: You do appreciate it.

[SPEAKER_13]: No problem.

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[SPEAKER_15]: even include the home you live in as part of the portfolio.

[SPEAKER_15]: It includes retirement accounts and taxable accounts.

[SPEAKER_15]: What all is included in the entire portfolio when you're determining what percentage of that portfolio should be invested in a particular asset?

[SPEAKER_15]: Thank you.

[SPEAKER_10]: That's a great question.

[SPEAKER_10]: And the reason why it's a good question is because I often talk about thinking about your investments holistic, right?

[SPEAKER_10]: Not just diversifying in your 401k and diversifying in your IRA and diversifying in your broker account, but understanding that your investments are the sum total of everything you own within your portfolio.

[SPEAKER_10]: And so really it's just one portfolio with different tax treatments.

[SPEAKER_10]: And so with that in mind, you should look across, across boundaries.

[SPEAKER_10]: and understand the correlations of everything together.

[SPEAKER_10]: And so the question brings in, what about your home?

[SPEAKER_10]: I would say if you're primary residents, you can think of it as real estate exposure, but to me, a home, a primary home's utility, I want to get people away from thinking as of property, their home, their primary residence as an investment, and think of it as utility.

[SPEAKER_10]: Now if you have investment property,

[SPEAKER_10]: So, in short, to make a long answer short, think of your investment portfolios just that, the assets that you own for investment purposes.

[SPEAKER_10]: It includes your 401k and includes your IRA and includes your investment property, your brokerage accounts, everything you do, your CDs, everything.

[SPEAKER_10]: But personally, and again, this is just a personal choice.

[SPEAKER_10]: I think given that your primary home is primarily utility, I wouldn't necessarily include that as a real estate exposure for your investment portfolio.

[SPEAKER_10]: Great question, thanks for the call.

[SPEAKER_03]: my question is, 46 years old, I've got a fair amount of stocks, but I've also got a decent amount of credit card debt, and I'm trying to chop away my credit card debt.

[SPEAKER_03]: Do you think it would be wise to pull out my stocks?

[SPEAKER_03]: Stay off my credit card debt, chop up my credit cards, and never use them again, and then start building my portfolio.

[SPEAKER_03]: I know the interest is costing me

[SPEAKER_03]: could answer that question.

[SPEAKER_03]: I would be grateful to have a great day and again, thank you for the show.

[SPEAKER_10]: Well, I think you answered the question for yourself.

[SPEAKER_10]: You said that the interest that it's costing you towards these cards is more than what you're making in the market.

[SPEAKER_10]: And that's because credit card debt in particular is can create a stranglehold on your finances.

[SPEAKER_10]: And that's because the interest rates are so astronomically high.

[SPEAKER_10]: Generally speaking, when you're thinking about the debt picture in terms of do I want to pay this off,

[SPEAKER_10]: to go to pay off over time, credit cards are always, unless it's a introductory offer or something that's particularly low.

[SPEAKER_10]: One of those things you should pay off, can be in the 20% the 30% but generally the math comes down to can you make more investing elsewhere, then paying this off earlier.

[SPEAKER_10]: Who's the example?

[SPEAKER_10]: Say you have an auto loan.

[SPEAKER_10]: Say you have a mortgage.

[SPEAKER_10]: So you're lucky enough to have one of those 3% mortgages.

[SPEAKER_10]: If you have the money to pay that all off today, should you do it?

[SPEAKER_10]: Or should you invest it?

[SPEAKER_10]: You could put it in the SKF, you could put in a money market fund, you could make more than that 3% and so you put the money in the money market fund, you'd make your 4.5% you do the monthly payments, at the end of the day you'd end up with positive money compared to just paying it off right then and there.

[SPEAKER_10]: That's not the case with credit cards.

[SPEAKER_10]: So what you should do is do all you can to pay off those credit cards, then once you're in a position where the debt is not accumulating greater than the returns you're getting in the market,

[SPEAKER_13]: Thanks for the call.

[SPEAKER_13]: You are listening to an invest talk best of caller questions compilation program.

[SPEAKER_13]: Your comments and questions are always welcome.

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[SPEAKER_08]: It's Nick from Washington DC.

[SPEAKER_08]: I have a real big question for you, guys.

[SPEAKER_08]: The common regards for co-operative or co-op, gives them currently a rencing isn't a co-op, and I've been thinking about buying, buying it in my building.

[SPEAKER_08]: I don't know what a co-operative is versus owning the property outright.

[SPEAKER_08]: I've been reading it online, still can't fully grasp it.

[SPEAKER_08]: So you guys are great at breaking down these topics, so it's one I can get help me out understand this.

[SPEAKER_08]: Thank you very much.

[SPEAKER_08]: Have a good one, guys.

[SPEAKER_11]: Well, co-ops are common in bigger cities where costs the prices are high, and there's more ability to create this communal relationship between those that really buy into a co-op, and you're not really buying into it, you're really buying a share in a non-profit corporation

[SPEAKER_11]: You know, you'll receive stock instead of tidal, like you will with traditional home purchase.

[SPEAKER_11]: And it makes it unique, okay?

[SPEAKER_11]: But it's very different.

[SPEAKER_11]: I wouldn't think of it as really an asset.

[SPEAKER_11]: It's not going to be worth this much, obviously, you don't have as much say as you do with your own property.

[SPEAKER_11]: You're going into it with a bunch of other people and they have their own rules and you may agree with that or you may not.

[SPEAKER_11]: If you look at the bylaws, you know, these people that you really want to tie yourself to in a living situation.

[SPEAKER_11]: And so that's the way I would think of it.

[SPEAKER_11]: Don't think of it as really a piece of real estate, because once you can't just do whatever you want with it, like you can with most real estate.

[SPEAKER_11]: So

[SPEAKER_11]: Could work for you if that's the, from a lifestyle perspective, which you want, you do want that community, do want that the lower cost that it comes buying into a co-op, or do you want more complete control?

[SPEAKER_11]: Thanks for the call.

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[SPEAKER_16]: I would call and visit a couple of questions real quick.

[SPEAKER_16]: I just have a daughter, not too long ago, and I also have a two-year-old, are at least open up an account for them and start investing for them.

[SPEAKER_16]: And with that said, the owner, what kind of account would be best for them?

[SPEAKER_16]: Especially in this market right now.

[SPEAKER_16]: I just want to get you guys the opinion on that and I appreciate you guys.

[SPEAKER_16]: Thank you.

[SPEAKER_10]: Well, first and foremost, congratulations on your new baby and it is great that you are thinking about how best to start saving for them.

[SPEAKER_10]: And so you got a couple options here.

[SPEAKER_10]: Right?

[SPEAKER_10]: You got a 529 plant.

[SPEAKER_10]: 529 plans can help you save for education expenses.

[SPEAKER_10]: They offer tax-free growth and withdrawals as long as it's a qualified expense.

[SPEAKER_10]: You can have a UGMA or UTMA which is an account for a minor with flexible savings that you can get your child can get access to when they reach a certain age.

[SPEAKER_10]: If your kid goes into modeling my child child acting, something like that, if they have earned income as what I'm getting at, then you could open up a Roth account for them, but only if they have earned income.

[SPEAKER_10]: But if I was going to start somewhere, you got to start at the 529.

[SPEAKER_10]: It has so many tax benefits, not just the tax or the tax regrowth, but tax-free withdrawals as well.

[SPEAKER_10]: And so start there.

[SPEAKER_10]: If you max it out, maybe start to open up one of those more flexible accounts.

[SPEAKER_05]: Question about investing in bonds right now.

[SPEAKER_05]: I have a mixed portfolio with about 30% in bonds.

[SPEAKER_05]: And my question is, how should I look at bonds right now with the

[SPEAKER_05]: and what's the benefits, first cons of shifting more to equities?

[SPEAKER_05]: Thank you very much.

[SPEAKER_10]: Yeah, so that's a good question.

[SPEAKER_10]: I think the first thing that's important to know is how old you are.

[SPEAKER_10]: Right if you're further along in your life cycle, then you do want to hold more bonds.

[SPEAKER_10]: Because you're preserving that capital, you need income, you're going to spend it down.

[SPEAKER_10]: Now, in terms of this current market environment, you're seeing it with government yields.

[SPEAKER_10]: You're seeing it with the 10 and 30 year yields rising.

[SPEAKER_10]: The bond market...

[SPEAKER_10]: bond vigilantes, the market is pricing in, the likelihood the potential, maybe not the likelihood after this week, but the potential for a blowout in fiscal deficits, meaning the cost of financing the dead of the United States goes up.

[SPEAKER_10]: If the benchmark rate goes up, everything else goes up.

[SPEAKER_10]: And so although we're talking about the potential for a Fed rate cut this year, you still have to understand what the long end looks like and if the long end gets blown out, you wanna stay short on the curve.

[SPEAKER_10]: Because with bonds, a bond's price is going to go down a current bond.

[SPEAKER_10]: Price is going to go down if rates go up.

[SPEAKER_10]: Why?

[SPEAKER_10]: Because you can get new on the run issues at higher rates.

[SPEAKER_10]: Conversely, if rates go down, the current bond's price is going to go up.

[SPEAKER_10]: Because the new issued bonds have lower interest rates.

[SPEAKER_10]: Now, if we're talking over a long investment horizon, because you said, when you would you want to invest in equities, it's really if you have that long investment horizon.

[SPEAKER_10]: There are periods, one, three-year periods, where you do see bonds out before equities.

[SPEAKER_10]: Pull back though, five, 10, 15-year periods.

[SPEAKER_10]: Nearly every time, equities out before form.

[SPEAKER_10]: So it's a risk-return thing, it's an investment horizon thing, and it's a what stage in your life you are thing.

[SPEAKER_10]: Thanks for calling that is a great question about bonds.

[SPEAKER_13]: You are listening to an invest talk best of caller questions compilation program.

[SPEAKER_13]: Your comments and questions are always welcome call anytime 88899 chart that's 88899 CHART

[SPEAKER_13]: You are listening to an invest talk best of caller questions compilation program.

[SPEAKER_13]: Your comments and questions are always welcome.

[SPEAKER_13]: Call anytime.

[SPEAKER_13]: 88899 chart.

[SPEAKER_13]: That's 88899 CHART.

[SPEAKER_11]: Let's go talk to Dave in Fremont, and he wants to talk about a best thing in the country of Morocco.

[SPEAKER_14]: Dave, yes, I really enjoy your show.

[SPEAKER_14]: Thanks for all you do.

[SPEAKER_14]: Appreciate it.

[SPEAKER_14]: Just a quick question.

[SPEAKER_14]: Yeah, I've heard that there are a lot of companies doing a lot of moving and growing companies in Morocco right now, and the Morocco could possibly be, you know, like the

[SPEAKER_14]: of America, California has blossomed, a lot of stuff is growing right now happening in Morocco and I'm curious which of good way to get in and invest into a whole new

[SPEAKER_14]: a country of growth and how to get in, how to get my money into something that would grow maybe like an S&P of Rocco or I really don't know anything about investing in foreign countries.

[SPEAKER_14]: So do you have any advice about that?

[SPEAKER_14]: Well, thanks.

[SPEAKER_11]: no problem.

[SPEAKER_11]: Thanks for the call.

[SPEAKER_11]: Now, uh, that is a challenge because Morocco is such a, a emerging market, a some very small country, and you have heard great things.

[SPEAKER_11]: It's actually on my list to go go visit.

[SPEAKER_11]: And so I agree with that to find ways to get exposure to countries like get exposure to Morocco.

[SPEAKER_11]: There's no real, I don't know if any ETF or anything like that.

[SPEAKER_11]: I'd have to dig in, there's probably some foreign

[SPEAKER_11]: companies that are listening on other exchanges that you might be able to purchase, and you can go do that figure broker, you know, buy those, those foreign entities, but I don't know any off top of my head, there's, you know, there's ETFs like the Vanic Africa ETF.

[SPEAKER_11]: I'm not seeing any exposure to Morocco, though.

[SPEAKER_11]: in this.

[SPEAKER_11]: As I can see in Morningstar, what countries it's exposed to with mainly South Africa, actually has some UK Canada, Australia, those are the main exposures.

[SPEAKER_11]: So I don't see a direct exposure trading on full on domestic markets.

[SPEAKER_11]: So I would have to just do a deep dive and I've never done that for Morocco, but I would encourage you to do it.

[SPEAKER_11]: Thanks for the call.

[SPEAKER_11]: I love those questions unique.

[SPEAKER_11]: Those are some of the plays that can be the most rewarding because there's not really money allocated there.

[SPEAKER_11]: If you're early on in that and that becomes a common theme of investing in Morocco and it's kind of the in the Mediterranean on the North coast of Africa and could be a great investment but thanks for the insights.

[SPEAKER_10]: So we have plenty of time to at least play another question, so let's tackle this one now.

[SPEAKER_04]: This is Mike from Tracy.

[SPEAKER_04]: How do you guys determine a value stock?

[SPEAKER_04]: And does the value stock change in different economic conditions?

[SPEAKER_04]: Great show.

[SPEAKER_04]: Have it listener.

[SPEAKER_04]: And I greatly appreciate you guys.

[SPEAKER_04]: Have a great day.

[SPEAKER_04]: And let's forward to hearing your answer.

[SPEAKER_04]: Bye.

[SPEAKER_10]: Great question, because people throw around words like value and growth all the time.

[SPEAKER_10]: And value means that you are paying less for the company on a relative basis.

[SPEAKER_10]: It's a relative price calculation.

[SPEAKER_10]: Now, in the empirical research, if you go back to FOMA French with a three factor model and the five factor model, what they did is what is called a regression based on characteristics of companies.

[SPEAKER_10]: And so they sorted them.

[SPEAKER_10]: based on their value characteristics where they use was price to book.

[SPEAKER_10]: And so this is called a relative price calculation.

[SPEAKER_10]: The price that somebody is paying in the market, right?

[SPEAKER_10]: It's price on the stock exchange.

[SPEAKER_10]: Relative to its book value, the value of its assets.

[SPEAKER_10]: If a company has a lower ratio of what people are paying versus what it has, it's assets.

[SPEAKER_10]: What's the value of your name?

[SPEAKER_10]: If it's higher, well, that is a growth name.

[SPEAKER_10]: The reason why is because growth companies, your tech companies, tend to have the potential for high profits in the future, whereas those value companies are more established.

[SPEAKER_10]: Now, now we use price to book, we use enterprise value to eat, but we use all sorts of calculations, we even use some that include cash flow, which tends to bleed into profitability, but that's a different question.

[SPEAKER_10]: But the main point here is that generally speaking with that research found and what subsequent research has found is that it doesn't really matter what multiple you're using if it's a market price to company specific multiple to judge relative price.

[SPEAKER_10]: You get generally the same type of answer.

[SPEAKER_10]: The usefulness of them tend to be different and from a trading perspective, but the key here, the key here is that when we talk about value, we're talking about relative price.

[SPEAKER_10]: How much of my

[SPEAKER_10]: Thanks for the great question.

[SPEAKER_11]: Let's go with another YouTube question.

[SPEAKER_11]: Daniel says, what's there between a 4a3b and a regular 401k?

[SPEAKER_11]: Well, put simply, a 4a3b is typically in relation to some sort of non-profit, okay?

[SPEAKER_11]: Some sort of five one C3, non-profit, or some sort of public school, for example.

[SPEAKER_11]: So if you work for, if you're a teacher, you probably have a four or three B. If you work for some sort of nonprofit, tax exempt organization, you also will have a four or three B. But from church, right, you work for church, for example, public college, university, high school, et cetera.

[SPEAKER_11]: And their rules are largely very similar to a 401k.

[SPEAKER_11]: They're just not run by a for-profit institution.

[SPEAKER_11]: You do the same thing with a 401k as you do with a 4-3B from an investment standpoint, you know, there's usually a set of investment options.

[SPEAKER_11]: You can roll that into an IRA once you leave that job and

[SPEAKER_11]: no task consequences, et cetera.

[SPEAKER_11]: Some of them have rough options, I believe, for three beasts, but don't as well.

[SPEAKER_11]: But for all intents of purposes, they're the same, which is who's the important.

[SPEAKER_13]: This is an invest talk best of caller questions compilation program.

[SPEAKER_13]: Your comments and questions are always welcome call anytime 88899 chart that's 88899 CHART

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[SPEAKER_11]: Well, let's touch a bit on the consumer, and more specifically, the young consumer.

[SPEAKER_11]: Now, in store and online purchases for 18 to 24 year olds.

[SPEAKER_11]: So the very young, in college, just at a college, I felt 13% year over year between January and April.

[SPEAKER_11]: While spending five older cohorts continue to rise, and it's really about, there's two factors here.

[SPEAKER_11]: One is, it's very difficult to find a job at a college right now.

[SPEAKER_11]: It's a microcosm of what's happening in the economy.

[SPEAKER_11]: Companies are not laying off a lot, but the vast majority out there are either very hesitant to hire or on a complete hiring freeze because of the lack of clarity in the business community and the broader markets.

[SPEAKER_11]: They don't not only maybe directly impacted by tariffs, but almost every business is at least

[SPEAKER_11]: And so that uncertainty is causing a lot of companies to just not hire, and that's what you're seeing the continuing unemployment claims just continue to rise.

[SPEAKER_11]: And all the hard data once again is looking pretty negative.

[SPEAKER_11]: So it's hard to get from them to get a job, and then student loan payments are also restricting millions of borrowers.

[SPEAKER_11]: used to be, they were on forbearance.

[SPEAKER_11]: And now, as of just a few months ago, they have to pay.

[SPEAKER_11]: Instead of money going into the economy, it's going to repay these loans.

[SPEAKER_11]: Now, credit card delinquencies have risen to the highest point since before the pandemic.

[SPEAKER_11]: And there are about the highest for 18 to 29 year olds, okay?

[SPEAKER_11]: Now where they've stopped, where have they stopped spending?

[SPEAKER_11]: According to Wells Fargo categories that have fallen the most, a peril 11%.

[SPEAKER_11]: Accessories 18%.

[SPEAKER_11]: Technology, 14% that's interesting, you know, cutting.

[SPEAKER_11]: digital services, like Netflix, etc.

[SPEAKER_11]: And then small appliances, 18%.

[SPEAKER_11]: And they come America found that for Gen Z and Millennials, so you're talking about those that are in their 20s, 30s, and all the way into early 40s, because Millennials go into the early 40s, between May of 2023 and May of 2025, they're down 1%.

[SPEAKER_11]: Think about that.

[SPEAKER_11]: Think about where the equity

[SPEAKER_11]: asset prices, home prices, etc.

[SPEAKER_11]: It's not benefiting that cohort.

[SPEAKER_11]: And I think this is also kind of accelerating the political divide in the country as well, because those younger people generally they're the ones that are spending more each year.

[SPEAKER_11]: Unless it's usually the older generation.

[SPEAKER_11]: Those that are in retirement, they're the ones that are spending less because they're their health.

[SPEAKER_11]: Often, doesn't allow them to travel more or, you know, move a lot, right?

[SPEAKER_11]: Most people when they hit 60, 70 years old.

[SPEAKER_11]: They slow down a little bit, they don't travel as much, they definitely don't move, they don't buy new furniture, not as much at least as younger people who are forming homes, right, buying new homes, moving into new apartments, traveling with their friends, going to concerts and shows, things like that, things that a lot of younger people tend to do.

[SPEAKER_11]: But those people over two year period, actually negative growth in their spending.

[SPEAKER_11]: Pretty amazing.

[SPEAKER_11]: All in line sales and accessories like I said down dramatically, certain companies are seeing 30% drops in the first three weeks of June.

[SPEAKER_11]: So it's accelerating in this month as well.

[SPEAKER_11]: And there are a lot of them are trading down.

[SPEAKER_11]: So they may be buying

[SPEAKER_11]: So buying, but they're buying the cheapest, as opposed to something that might be better and more expensive.

[SPEAKER_11]: One thing they're spending more money on though, which is interesting, is a lot of people are coming in, socially women, that are trying to do more things at home, right, die their hair, do their nails, et cetera, and try to save money that way, and then they mess up, and they go to a professional to fix it.

[SPEAKER_11]: So that's what's actually been picking up.

[SPEAKER_11]: But the point here is that in general,

[SPEAKER_11]: The system is not working for that cohort.

[SPEAKER_11]: So it's very important to understand that from a long-term perspective, from a political and social cohesion standpoint.

[SPEAKER_11]: And if you're wondering what's going on with the younger generation, it's showing up in the labor statistics, showing up in the spending statistics, and it's something I think we all need to think about.

[SPEAKER_10]: All right, let's roll another question.

[SPEAKER_10]: And now this one on mid or small cap stocks.

[SPEAKER_06]: Hello, it's Jordan from Minnesota.

[SPEAKER_06]: I'm just wondering, and today is market environment.

[SPEAKER_06]: If you'd recommend investing in large cap, mid cap or small cap stocks, or if you'd kind of do a mix of all three, thanks, appreciate everything you do.

[SPEAKER_10]: Large, mid, and small cap stocks.

[SPEAKER_10]: So we're covering the whole, the whole Shabang here, if you will.

[SPEAKER_10]: And so I think this question is in two, I think it's two different answers here.

[SPEAKER_10]: Historically speaking, small companies tend to outperform mid-cap companies that tend out from large-cap companies.

[SPEAKER_10]: Why it's because investors tend to demand more return for higher risk and smaller names are riskier than margin names.

[SPEAKER_10]: I like to give the example that if I go out to take a loan, Warren Buffett goes out to take a loan.

[SPEAKER_10]: I'm probably going to get a higher interest rate.

[SPEAKER_10]: I imagine, or the person who's underwriting the loan is not doing their job.

[SPEAKER_10]: Now, that means that if you have a long investment horizon, times where maybe in the short-term small caps are underperforming, they're more negative than large caps.

[SPEAKER_10]: Can be for somebody who's investing for a decade or beyond, a great time to pick it up.

[SPEAKER_10]: But in this type of environment where interest costs are rising yields are trending upward though they are down today on the back of the potential for the big beautiful billmath pass.

[SPEAKER_10]: In an environment where capital is more expensive, where money isn't free, large caps do tend to do a little bit better.

[SPEAKER_10]: And so, if you're thinking about the shorter, I would be more tilted towards a large cap.

[SPEAKER_10]: So it doesn't mean not the investment small and mid caps, but it means to understand how the market dynamics are affecting things in the three different time frames over which we invest, short, medium, and long.

[SPEAKER_10]: Either way, the best type of strategy is a well diversified strategy.

[SPEAKER_13]: Have you heard about the new Invest Talk Store?

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[SPEAKER_07]: I have a question in the four Roth IRA.

[SPEAKER_07]: I know after the five years of having the account open, you can go ahead and withdraw your actual investment.

[SPEAKER_07]: But I was wondering, if you had dividend stocks,

[SPEAKER_07]: within that profile, when you receive those dividends after five years, can you also withdraw those?

[SPEAKER_07]: Thank you.

[SPEAKER_11]: No.

[SPEAKER_11]: It's only the contributions to your Roth IRA.

[SPEAKER_11]: Remember, dividends are part of the...

[SPEAKER_11]: return profile of equity investments.

[SPEAKER_11]: It's not just capital appreciation, it's dividends as well.

[SPEAKER_11]: And so just because they're paying you a dividend doesn't mean that doesn't cause a contribution.

[SPEAKER_11]: So Roth IRAs are, become more popular than I think that's great because of that,

[SPEAKER_11]: kind of rainy day fun that it's easy to make them into after five years and you can go and take that money, still invest it while you're waiting and living your life and if anything bad happens you can go and and take that money out and so that's a great thing, a great future of Roth IRAs but no the dividends do not count as contributions and that's not part of what you can take out tax and penalty free.

[SPEAKER_10]: It's like we have our first live call of the day art from San Jose.

[SPEAKER_10]: How can we help you?

[SPEAKER_09]: Oh, um, this is art Wagner.

[SPEAKER_09]: I'd like to ask a question for change, for her dividend stock.

[SPEAKER_09]: I'm looking at something put out by Wells Fargo.

[SPEAKER_09]: I'll wfc.pr.d And I understand that you buy a share and it's part of a large repository.

[SPEAKER_09]: have shares in the interest rate of 6.0 to 6.25%.

[SPEAKER_09]: I know you don't like high interest high yield and I'm wondering what is your comment on this kind of purchase?

[SPEAKER_10]: Don't mistake chasing yield with purchasing a yielding security, right?

[SPEAKER_10]: And so when we say don't chase yield, we mean if you're looking at the common stock market,

[SPEAKER_10]: and you're seeing a company that has 11, 12% yield, it could be because the price has fallen a lot.

[SPEAKER_10]: That's not the case with preferred shares and preferred dividend shares.

[SPEAKER_10]: These are instruments that you're purchasing that don't really see much price appreciation at all if any that are far less liquid whose sole purpose is to provide you with dividends and income.

[SPEAKER_10]: And so they can be good sources of income for somebody who is needing that in their portfolio.

[SPEAKER_10]: I don't have much detail on this specific preferred dividend, but generally speaking, preferred dividends, preferred shares, or for income investors, don't expect capital appreciation, expect lower liquidity as well, sometimes even locked in, but don't confuse that with chasing yield.

[SPEAKER_10]: This is investing for yield, not chasing yield.

[SPEAKER_10]: Thanks for the call.

[SPEAKER_13]: On radio, on YouTube, streaming live on at vestalk.com.

[SPEAKER_13]: My question today is about HIV, equipment, services, and... And for our podcast subscribers, if you're willing to take the risk, in vestalk.

[SPEAKER_13]: If you're okay with that risk, with host and financial advisor, Justin Klein, and that volatility, go for it.

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[SPEAKER_13]: This company is falling like a rock, it's down 52% Invest talk.

[SPEAKER_13]: Have a simple teenage.

[SPEAKER_13]: Everybody wants a secure financial future.

[SPEAKER_13]: Richard, you have a question about TOL, but getting there takes strategy, discipline, and the right information.

[SPEAKER_11]: What are what you think of the price of it?

[SPEAKER_11]: Go to Chris in Maine looking at I.E.X.

[SPEAKER_09]: Hey Justin, I own it.

[SPEAKER_09]: Just see what you thought of it.

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[SPEAKER_13]: Hey.

[SPEAKER_00]: Invest talk.

[SPEAKER_00]: This is Steven from Learn's California.

[SPEAKER_00]: 10-year listener.

[SPEAKER_00]: And I really really enjoy the show.

[SPEAKER_00]: It gained so much information from listening over the years.

[SPEAKER_00]: I wanted to ask a question today as to why the doubt index is used so often and referring to the general data-day movement of the market.

[SPEAKER_00]: I would think the S&P 500 and NASDAQ would be a more appropriate gauge of what's actually happening in the market based on more companies, if you have any insights into that.

[SPEAKER_00]: I'd love to hear your answer on the show.

[SPEAKER_00]: Thanks, guys.

[SPEAKER_00]: Bye.

[SPEAKER_11]: Yeah, I agree.

[SPEAKER_11]: I think you'd never hear me talk about the Dow.

[SPEAKER_11]: The Dow is it's been around longer than the S&P.

[SPEAKER_11]: So it does have that history, but it's only 30 names.

[SPEAKER_11]: It's price-weighted.

[SPEAKER_11]: It's not market cap-weighted.

[SPEAKER_11]: So, you know, the company has a split.

[SPEAKER_11]: It lowers the waiting within the particular, within that index.

[SPEAKER_11]: So that doesn't really make a whole lot of sense, because the stock split has no relevancy to the value of the business.

[SPEAKER_11]: So, and I think the main reason it's used is number one that history being around longer than the S&P.

[SPEAKER_11]: But also the large number.

[SPEAKER_11]: And so when there's a market move, a thousand points on the Dow used to be a huge market move.

[SPEAKER_11]: Now, a thousand points, it's only about two and a half percent, and that's not that crazy.

[SPEAKER_11]: But when it comes to the news,

[SPEAKER_11]: non-financial news outlets, it just sounds better to say the Dow was up or down a thousand points versus the S&P was up or down a hundred points with 300 points, right?

[SPEAKER_11]: So 300 points on the S&P is pretty big.

[SPEAKER_11]: That's about five percent.

[SPEAKER_11]: But 300 points on the Dow is

[SPEAKER_11]: minimal.

[SPEAKER_11]: If that 300 points on the SMB is much bigger move than a thousand points on the doubts, but double.

[SPEAKER_11]: So to me, that's the reason.

[SPEAKER_11]: It just sounds coolers, sounds more interesting, sounds like it has more impact.

[SPEAKER_11]: Now, I also think the NASDAQ is probably not a good gauge either.

[SPEAKER_11]: It's better, there's a hundred names, but it's not the doubt.

[SPEAKER_11]: I'm sorry, the SMP excuse me.

[SPEAKER_11]: or it's 500 names.

[SPEAKER_11]: I would even go further than that.

[SPEAKER_11]: I like even broader indices.

[SPEAKER_11]: I like things like the Russell 3000, which is 3000 largest names.

[SPEAKER_11]: And I will be talking six times the size of the S&P.

[SPEAKER_11]: You have things like the NYC Composite Index.

[SPEAKER_11]: That's been around a very long time as well.

[SPEAKER_11]: That's about 2500 names.

[SPEAKER_11]: So I think there's even improvements beyond just the S&P.

[SPEAKER_11]: But overall, I'm not sure why they still use it.

[SPEAKER_11]: I know we don't use it.

[SPEAKER_11]: We never look at it.

[SPEAKER_11]: We look at mainly NASDAQ, S&P, NYSE, Russell 3000, Russell 2000, Russell 1000, things like that.

[SPEAKER_11]: Those are the ones that we tend to look at to get kind of a broad view of what's happening in the market.

[SPEAKER_13]: You've got two for the price of one.

[SPEAKER_13]: Justin Klein and Luke Guerrero are here and they're taking your financial investment questions now.

[SPEAKER_13]: 888-99 chart.

[SPEAKER_10]: Secretary of the live call, it's going to tearth and send Jose.

[SPEAKER_10]: You have a question about your 401k?

[SPEAKER_01]: Yeah, hi.

[SPEAKER_01]: Thanks for taking my call.

[SPEAKER_01]: So I recently changed my job and I have 401k with my Olemplower, which I want to roll over.

[SPEAKER_01]: So I want to look at information like what would be a better option between the traditional IRA or Roth IRA and like I'm also happy to answer like any relevant information from my side It can help with this decision.

[SPEAKER_01]: So like I'm 30.

[SPEAKER_01]: I don't need that money for a long long time I do expect to get in like higher text like it as I move forward in my career

[SPEAKER_01]: But yeah, and I have like five years worth of like 401k amount in my like old-old account.

[SPEAKER_10]: Okay.

[SPEAKER_10]: Yeah.

[SPEAKER_10]: So, the first thing I would do is I would want to roll it over into a traditional IRA, probably nearly immediately.

[SPEAKER_10]: And the reason why is because when you keep something in A 401k account, you could be paying a plan fee, right?

[SPEAKER_10]: Sometimes companies swallow those fees, sometimes they don't swallow those fees, but they tend to be more expensive and your options tend to be far more limited.

[SPEAKER_10]: Now, if you wanted to do a Roth conversion, you don't have to convert to the full amount all at once, right?

[SPEAKER_10]: And so one of the strategies for converting from a traditional IRA into a Roth IRA is to only do it as much each year such that you don't push yourself into a higher tax bracket.

[SPEAKER_10]: And so as we just mentioned, you know, to a previous question,

[SPEAKER_10]: The key here is about minimizing the amount of taxes that you are paying.

[SPEAKER_10]: And so for some people, it also makes sense to just keep it in a traditional IRA because they aren't going to be earning any income in retirement, and so they're going to be in a far lower tax bracket.

[SPEAKER_10]: And so this is a question that is very person-specific that you would likely be best advised to consult with a tax professional who can look at your full situation and give you

[SPEAKER_10]: But we need to see all of their information in front of us.

[SPEAKER_10]: And then we have tools that help us decide the amount and whether or not we're going to delay or do it all immediately.

[SPEAKER_10]: But the first thing I think you want to do is get it out of that 401k into a traditional IRA.

[SPEAKER_10]: Give you more investment options and save you some money potentially from those plan fees.

[SPEAKER_13]: Good.

[SPEAKER_13]: Thank you.

[SPEAKER_13]: Thanks for the call.

[SPEAKER_13]: You are listening to an invest talk best of call or questions compilation program.

[SPEAKER_13]: Your comments and questions are always welcome.

[SPEAKER_13]: Call anytime 88899 chart.

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[SPEAKER_02]: This is great from Illinois.

[SPEAKER_02]: Very much appreciate the podcast and everything you teach your listeners.

[SPEAKER_02]: I have a question about fractional shares.

[SPEAKER_02]: A lot of the online brokers are advertising fractional shares.

[SPEAKER_02]: I was wondering, from your standpoint, if they're at downside in buying fractional shares versus whole shares,

[SPEAKER_02]: Just thinking in terms of investing in round dollar amounts as opposed to specific number of shares when buying selling stocks.

[SPEAKER_02]: If you couldn't let me know, I would appreciate it.

[SPEAKER_02]: Thank you.

[SPEAKER_11]: But simply, no.

[SPEAKER_11]: There's not really any downside unless there's some additional costs for the broker.

[SPEAKER_11]: I haven't seen that.

[SPEAKER_11]: I don't see that.

[SPEAKER_11]: I think there's just a feature they've rolled out where you can buy fractional shares.

[SPEAKER_11]: Now I don't know how they do that kind of behind the scenes.

[SPEAKER_11]: But.

[SPEAKER_11]: Yeah, I think it's a great way to gain exposure to companies that, especially if you don't have a small dollar amount.

[SPEAKER_11]: And you can't afford it, though, from a, especially if you have a diversification standpoint, used to be, oh, it's a $10,000 account.

[SPEAKER_11]: And I go bye.

[SPEAKER_11]: A company that's trading for $1,000 per share and there's plenty out there and a lot of them are cheap even though they look at $1,000 per share You might sound that sounds like a lot, but remember, it's always in relation to earnings and cash flows etc So, you know, they have to buy one share and now the 10% of the portfolio and then I do too much now You can buy fractional shares by 0.1% of a share and now that's only $100 Now that's reasonable as a percentage of the overall portfolio So I think it's great.

[SPEAKER_11]: I think it's it's

[SPEAKER_11]: Outside of free trades, it's probably the next best thing the brokerage community has rolled out over the last, you know, five, ten years or so is the ability to buy fractional shares.

[SPEAKER_11]: So you know, downside to it at least from my point of view and it's a good way to kind of accumulate shares companies you might like and not have to worry about it getting too much of becoming too much of your portfolio.

[SPEAKER_11]: So great question and hope that helps.

[SPEAKER_12]: Got a question for Justin or Luke?

[SPEAKER_12]: You're the best person to ask it.

[SPEAKER_08]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stocks?

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[SPEAKER_10]: Now from time to time, we receive investor questions over there on our YouTube channel in the comment section of any one of our many videos that we put out for you on a daily basis.

[SPEAKER_10]: And this is one of some Nicholas Collins 42 60.

[SPEAKER_10]: It's as one of your thoughts.

[SPEAKER_10]: on the growth to value trade.

[SPEAKER_10]: I was wondering what your thoughts were on the growth to value trade, the charge show, the growth stocks, that perform value stocks more drastically.

[SPEAKER_10]: I think that's of us to say in recent decades, then they used to.

[SPEAKER_10]: Is this something that is most likely to continue?

[SPEAKER_10]: And if so, which index would be better to invest in the short of medium term?

[SPEAKER_10]: Okay, so historically speaking, if you go back to the 1920s, which is all the available data we have, empirically, you've seen out performance of value relative to growth.

[SPEAKER_10]: Why is that?

[SPEAKER_10]: Well, it's a sensibility perspective, right?

[SPEAKER_10]: If you think about a stocks return, it's expected returns, as the demand investors have for taking on excess risk, and you consider two companies that are exactly the same, their prices are the same,

[SPEAKER_10]: But one of them has higher book value, well, then in order to make that equation equal, the discount rate has to be higher for the one that has a lower relative price.

[SPEAKER_10]: And so that's a lot of finance, mumbo jumbo, I just threw it with you, but essentially, companies that are trading and a lower valuation relative to what their assets are, historically, have outperformed.

[SPEAKER_10]: Now, that hasn't been the case in the past decade.

[SPEAKER_10]: And if you wanna dive into this, we actually did a webinar in this years ago, it's on YouTube.

[SPEAKER_10]: That hasn't really been the case.

[SPEAKER_10]: And one of the reasons why it could be a skew from a couple tech companies that have done really well shift in the US economy towards those services sectors towards those technology companies, or it could be indicative of zero interest rate phenomenon that really hasn't happened.

[SPEAKER_10]: For as long a period as it did in the 2010s, then you've started to see some of a reversal there a little bit, but I haven't fully convinced that the economic sensibility perspective of what is going on, why inherently it makes sense that value securities outperform.

[SPEAKER_10]: I don't think that's really broken down in a way.

[SPEAKER_10]: Now you can judge value versus growth in many, many ways.

[SPEAKER_10]: The research, the pharmaceutical research, did it on price to book.

[SPEAKER_10]: The reason why they did that is because it tends to be more stable over time if book value will make changes once a quarter.

[SPEAKER_10]: Well, then you're not really having a lot of turnover in your portfolio, but you can look at price to cash flow and a price value, even to you can look at all sorts of valuations.

[SPEAKER_10]: Then again, over the long sample, tell you that value has still outperformed.

[SPEAKER_10]: And so going forward, if you're looking on a long basis, I'm still not seeing anything that suggests that the market has broken down in such a way that what drives

[SPEAKER_10]: So for me, being a value investor is still a good side of the trade to be on.

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[SPEAKER_12]: It's important for the listener to understand that not all comments made will apply to them.

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[SPEAKER_12]: or shell statements on this program be considered an offer to buy or sell security.

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