[SPEAKER_08]: This is a special invest talk, best of caller questions, compilation program.

[SPEAKER_08]: Remember, the invest talk phone lines never close.

[SPEAKER_08]: Please call with questions.

[SPEAKER_08]: 888, 99 chart, 888, 99, C-H-A-R-T.

[SPEAKER_08]: They will be played and answered on an upcoming Invest Talk podcast.

[SPEAKER_11]: Let's go talk to Orlando in San Bernardino.

[SPEAKER_11]: I want to talk about an IRA.

[SPEAKER_05]: Hi, so I have an account from my old job that I never rolled over.

[SPEAKER_05]: I do make over a hundred thousand a year and I recently got married my wife makes around 30 so I think it would be a good year to actually

[SPEAKER_11]: put it into my Roth IRA that I have with Dan Gordon right?

[SPEAKER_11]: Well, that's, that's a broader tax question and what tax bracket you're in.

[SPEAKER_11]: Putting money into a Roth IRA or 401k doesn't matter, it matters less about what your tax rate is today and more about what it is compared to the future.

[SPEAKER_11]: If in the future you're going to have, and it being a lower tax bracket that you want to wait, keep it in an IRA or traditional 401k, and then you roll it into that Roth IRA.

[SPEAKER_11]: later do a Roth conversion.

[SPEAKER_11]: So what I would say is roll it into an IRA, simple as that, and remember, you don't have to do it all.

[SPEAKER_11]: You can say, okay, I'm going to roll it into an IRA, and then I'm going to convert $3,000 into a Roth, and then $3,000 will hit your adjusted gross income that year.

[SPEAKER_11]: Okay, so it's not an all or another proposition.

[SPEAKER_11]: Yeah, it's not it's not I do it all right in in one or do all in another You do it all into an IRA and then you can piecemeal it over time into a Roth IRA.

[SPEAKER_11]: Do you know how much is on that old 401k?

[SPEAKER_05]: to put a thousand, it's not a whole lot.

[SPEAKER_11]: Okay, so I would roll it into an IRA.

[SPEAKER_11]: I would talk to do you have a CPA or a tax advisor?

[SPEAKER_11]: No, not yet.

[SPEAKER_11]: Okay, so I would have a plan for it.

[SPEAKER_11]: I wouldn't just do it just to do it.

[SPEAKER_11]: I would talk to probably an tax advisor if you have a financial advisor building a plan for you.

[SPEAKER_11]: What we do for clients is gonna figure out when that should go into the Roth.

[SPEAKER_11]: Typically, the best time to do it is between retirement.

[SPEAKER_11]: and taking social security.

[SPEAKER_11]: That's time where most people, they've, they've a master nest egg, they, and any retire, they no longer work, and they don't have much income, if at all, and they're very, very low tax bracket, and then they can start converting their tax deferred accounts, like 401ks and IRAs to a Roth IRA.

[SPEAKER_11]: Slowly, right, a little bit over time, just to fill you up to that next tax bracket and then do more of the following year.

[SPEAKER_11]: So remember, Roth conversions are not all or nothing.

[SPEAKER_11]: You can do it slowly over time.

[SPEAKER_11]: And that's usually the best strategy based on years that you're in a low tax bracket.

[SPEAKER_12]: Oh, great advice.

[SPEAKER_12]: Thank you, Justin.

[SPEAKER_11]: No problem.

[SPEAKER_12]: Right.

[SPEAKER_12]: It's got a Roger.

[SPEAKER_12]: It's calling in from the Bay area.

[SPEAKER_12]: There's a question about 401k.

[SPEAKER_12]: It's how can you help your Roger?

[SPEAKER_00]: I love the fact that it's taking my call.

[SPEAKER_00]: But my question is regarding the from signing an executive order today to make it easier for the 401k plans to offer private equity investing.

[SPEAKER_00]: What is the watcher take on that?

[SPEAKER_00]: And on the phone lines, I was in fact thinking for long and looking to add

[SPEAKER_00]: a folding in the private equity space and was looking at either black stole or a polar global management, any take on either of these two and what would be a better choice because and what price when I get in because I feel currently they are overvalued.

[SPEAKER_12]: Yeah, I'll talk about the first question to spend too much time on all of these, but I think the more important part of your question was about the executive order for 401k's, which is supposed to give a more exposure

[SPEAKER_12]: Um, two alternative assets make it so you can get more exposure alternative assets within 401k plan the reason why that wasn't the case before is well There's a lot of interesting liability between the employer and the employee when the employer offers certain funds right employers can be sued for not

[SPEAKER_12]: offering funds that are, let's say, suitable for retirement purposes.

[SPEAKER_12]: And so because of that, there was a narrow definition of what could be within 401k plants.

[SPEAKER_12]: So this order enables retirement plants to include alternative assets, such as private equity, real estate cryptocurrencies, commodity infrastructure funds, and digital strategies alongside those traditional stock and bond funds.

[SPEAKER_12]: Now, it matters because it may offer potential for high returns and diversification, though access to such investments will take time to materialize.

[SPEAKER_12]: This isn't a thing that happens overnight, right?

[SPEAKER_12]: Arissa, which is what governs, essentially retirement plans, the employee retirement income security act, is very specific in its mandate, and so changing what has historically been allowed is going to take some time.

[SPEAKER_12]: One other thing I want to mention because I think it's important as well, I saw a study the other day about private equity returns versus public equity returns.

[SPEAKER_12]: Think over the past 15 years.

[SPEAKER_12]: And one of the reasons why private equity returns tend to seem so good is because of smoothing, right?

[SPEAKER_12]: Private equity investments, private investments.

[SPEAKER_12]: are not market market daily.

[SPEAKER_12]: What does market market mean?

[SPEAKER_12]: Well, the fair value assessment does not happen daily.

[SPEAKER_12]: That does happen with public investments.

[SPEAKER_12]: That's what trading does.

[SPEAKER_12]: You have a buyer.

[SPEAKER_12]: You have a seller.

[SPEAKER_12]: They need a price.

[SPEAKER_12]: That's a transaction.

[SPEAKER_12]: And that is a fair value for that asset at any given point in time.

[SPEAKER_12]: You don't get that with private equity.

[SPEAKER_12]: And so what you tend to see is when there are periods of volatility within public markets.

[SPEAKER_12]: It doesn't really bleed over into private markets and so it makes returns look smoother and better from a risk-adjusted basis because you get the long-term return without necessarily the interim volatility because the difficulty of finding out how to measure these things that are private investments.

[SPEAKER_12]: And so I think what I'm trying to get at here is just because you have access to certain things, doesn't mean that adding new types of investments will diversify your portfolio.

[SPEAKER_12]: Yes, it is the case sometimes that correlations can differ from private and public markets, but you have to ask yourself why that is.

[SPEAKER_12]: Is it because the private assets have different risks or is it because the returns of those private and public assets are measured differently?

[SPEAKER_12]: Hopefully that answers some of your questions, certainly this is an important topic, and anybody who is looking to move away from some of those stocks and bonds traditionally in 401k's to what will now soon be available to them needs to do their due diligence and do their research.

[SPEAKER_09]: Thanks for the call.

[SPEAKER_09]: If you are listening to an invest talk, best of call or questions compilation program.

[SPEAKER_09]: Your comments and questions are always welcome, call anytime, 888-99 chart.

[SPEAKER_09]: That's 888-99-CH-A-R-T.

[SPEAKER_09]: Serious investors are certain to have, finance, and investment questions.

[SPEAKER_06]: Hello, and best talk.

[SPEAKER_06]: This is Jose from New York.

[SPEAKER_09]: I'm looking into buying a small position in Dollar Tree or Dollar General.

[SPEAKER_09]: And the best person to ask your question in the right way is you.

[SPEAKER_09]: Hi, I'm Bestop.

[SPEAKER_09]: I was calling in with a question on the stop Nike and 24 seven rain or shine Justin Klein and Luke Guerrero stand ready to provide their unbiased dancers.

[SPEAKER_11]: That is up into a little bit of resistance.

[SPEAKER_11]: So you probably want a little bit of consolidation here.

[SPEAKER_11]: So this company does not capitalize itself with equity.

[SPEAKER_12]: It does not capitalize itself with debt.

[SPEAKER_09]: Your participation makes an investment talk better.

[SPEAKER_10]: Let's play a call a question from A to D. I need to answer this is James from Georgia.

[SPEAKER_10]: I was trying to call about to resemble SCCO.

[SPEAKER_10]: So don't forget to call in Vestalk.

[SPEAKER_10]: I appreciate the show, guys.

[SPEAKER_10]: Thank you.

[SPEAKER_10]: A to D. D. 99 chart.

[SPEAKER_08]: This is a special invest talk, best of caller questions, compilation program.

[SPEAKER_08]: Remember, the invest talk phone lines never close.

[SPEAKER_08]: Please call with questions.

[SPEAKER_08]: 888, 99 chart.

[SPEAKER_11]: Let's keep things moving.

[SPEAKER_11]: It's the thing back to the best-like voice thing.

[SPEAKER_11]: You know the number?

[SPEAKER_11]: It's 888, 988 chart.

[SPEAKER_04]: Hey, gentlemen.

[SPEAKER_04]: This is Craig from the mountains outside Seattle.

[SPEAKER_04]: I've called a few times before.

[SPEAKER_04]: Hopefully, a simple question.

[SPEAKER_04]: I talked to a lot of my friends asked me to talk to their kids.

[SPEAKER_04]: I think they get their first jobs.

[SPEAKER_04]: can introduce them to finance and invest in and so I always start with a compound interest calculator just to generate the discussion.

[SPEAKER_04]: But when it comes to frequency of compounding, so life in me, I can't find anywhere to finish on Morningstar or anywhere else where for a Roth IRA for basic investments for index funds where they specify the compounding schedule is a weekly monthly quarterly annually

[SPEAKER_04]: And I'm wondering how that's determined, you know, obviously the more frequently it compounds the better, but I can't see what determines that or where I would find that in a perspective or anything else.

[SPEAKER_04]: So any information you could provide there that would make it easier to have that discussion and then be able to speak intelligently through it.

[SPEAKER_04]: I greatly appreciate it.

[SPEAKER_04]: Thanks again.

[SPEAKER_04]: Bye-bye.

[SPEAKER_11]: The problem.

[SPEAKER_11]: Yeah.

[SPEAKER_11]: That's very simple.

[SPEAKER_11]: It depends on the rate of return you are specifying in that particular, uh,

[SPEAKER_11]: Schedule, right, and is it annual return?

[SPEAKER_11]: Is it quarterly, monthly, daily?

[SPEAKER_11]: That's how often it's compounding, right?

[SPEAKER_11]: So if you have a 20% return, and you start with $10,000, well, after one year, say 20% annual return, that means you have $10,000.

[SPEAKER_11]: Next year, at the end of that year, you're in 20%, you're at $12,000.

[SPEAKER_11]: Then the next year, if you're in another 20%, that's 14,000,

[SPEAKER_11]: $400 is you're adding your compounding that money and so on and so forth.

[SPEAKER_11]: So it's about the return that you are getting and you're putting in there as it wants to analyze returns quarterly, monthly, daily, etc.

[SPEAKER_11]: That's the frequency of the compounding.

[SPEAKER_11]: Thanks for the call.

[SPEAKER_12]: All right, let's see if we can tackle another caller question from our YouTube comment section.

[SPEAKER_12]: Says is it a good time to buy some stocks?

[SPEAKER_12]: Question says I've been keeping an eye on what's going on in the market lately and it feels like we've got a few cross currents to watch.

[SPEAKER_12]: The latest CPI numbers show headline inflation cooling, which makes a Fred Fedrate cut more likely, but cornflation is still hanging around so the

[SPEAKER_12]: see some sort of stability now compared to last few months, is it a good time to buy some stocks or what industries would you suggest?

[SPEAKER_12]: Well, I wouldn't agree with the contention that inflation is cool, right?

[SPEAKER_12]: When you look at a pure CPI number, you have a lot of lag defects here.

[SPEAKER_12]: One big part of it is the 12-month look back into real estate rentals housing.

[SPEAKER_12]: And so as you move towards what was a historically expensive time and the housing market is starting to break a little bit,

[SPEAKER_12]: months in the past drop-off, and these cheaper months come in, it understandably from a calculation perspective, eases that top end number.

[SPEAKER_12]: That's part of the divergence between when you actually get deep look-ins in a more granular way, and you see certain areas where inflation is picking back up.

[SPEAKER_12]: And so I wouldn't agree with the idea that, well, now inflation is cooling, therefore the Fed rate path is certain.

[SPEAKER_12]: Now the market seems to think in September to certain, but beyond that,

[SPEAKER_12]: As inflation is not fully gone, right?

[SPEAKER_12]: We do see it in producers' prices and all sorts of figures besides CPI.

[SPEAKER_12]: We're also now worried a little bit about a mid labor market.

[SPEAKER_12]: But here's what I would say.

[SPEAKER_12]: Is now good time to buy stocks.

[SPEAKER_12]: If you're investment horizon is long enough, you're not going to really think about if you entered that stock here or if you entered it 5% lower 20 years from now.

[SPEAKER_12]: And so if you're young, if you don't need the money, if you have a long time horizon, it's always a good time to buy stocks.

[SPEAKER_08]: Invest Talk is ready 24-7 for your finance and investment questions.

[SPEAKER_15]: I'm hoping you'll give me your take-on or matte technology, ORA.

[SPEAKER_13]: 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?

[SPEAKER_08]: Don't forget to call, Invest Talk, 888-99, chart.

[SPEAKER_11]: That's why another caller question from eight to eight, 99 chart.

[SPEAKER_15]: This is Jay from Salt Lake City.

[SPEAKER_15]: I have a question.

[SPEAKER_15]: So the company worked for the use fidelity and other 401K program.

[SPEAKER_15]: And a lot of people use their act of management or whatever.

[SPEAKER_15]: And I know that they're fiduciaries, but they're also real good dealers.

[SPEAKER_15]: And I want to kind of wondering, is this what your guys have thought of?

[SPEAKER_15]: I know, for example, you guys do research on companies, sectors, but I don't see them doing that.

[SPEAKER_15]: Could you get a touch on what they do or maybe what questions to ask them?

[SPEAKER_15]: I would appreciate it.

[SPEAKER_15]: Thanks again to Have a great show.

[SPEAKER_15]: Well, you have a great show.

[SPEAKER_15]: Thank you.

[UNKNOWN]: Bye.

[SPEAKER_11]: Well, thank you for the kind of words.

[SPEAKER_11]: I'm not privy to how fidelity's active management does it, or I would imagine it's probably not just one, but they are trying to manage more 401ks.

[SPEAKER_11]: I know that they have been really fighting with some pieces of what we use to manage our clients 401ks.

[SPEAKER_11]: About 40% of 401ks sit with fidelity, and so they're trying to get keep and not allow us to manage those 401ks.

[SPEAKER_11]: I think a lot of it's because they're trying to do it themselves in charge for themselves.

[SPEAKER_11]: I don't know their process.

[SPEAKER_11]: Okay, I don't know the process of making the decisions I wish I did.

[SPEAKER_11]: I can talk about the fiduciary responsibility, though, as a broker.

[SPEAKER_11]: That's what they are, right?

[SPEAKER_11]: They're their first and foremost, the broker.

[SPEAKER_11]: They're holding on to the assets placing, managing the trades.

[SPEAKER_11]: Okay.

[SPEAKER_11]: And then there can be a layer where they're providing investment advice, and they could be wearing that fiduciary hat.

[SPEAKER_11]: I don't know once again, I'm not saying they are.

[SPEAKER_11]: They aren't, but that's possible.

[SPEAKER_11]: It happens a lot of these big firms where you don't really know are they acting as fiduciary or they not.

[SPEAKER_11]: And that's the issue.

[SPEAKER_11]: For us, we are the fiduciary.

[SPEAKER_11]: We're not a broker or a client, a counselor, are almost exclusively set up at Schwab.

[SPEAKER_11]: And so Schwab's the broker, we place our trades through through Schwab, we have our own process on the investment side and we have to act the best interest of our clients.

[SPEAKER_11]: So that is something that that's that's the set that we have.

[SPEAKER_11]: And I would encourage every advisor that you're using to have that set up.

[SPEAKER_11]: So there's not that

[SPEAKER_11]: You know, they might try to sell you an annuity or something like that and collect a commission on the side while, you know, doing something else for some other assets and and that's the worry with a broker or an advisor quote unquote that can wear both hats.

[SPEAKER_11]: Once again, I'm not privy to your 401k set up and who is advising in all of that, but those are kind of general thoughts on that whole ecosystem and unfortunately fidelity.

[SPEAKER_11]: They're not very friendly when it comes to allowing you to pick your own advisor.

[SPEAKER_09]: You are listening to an invest talk, best of call or questions compilation program.

[SPEAKER_09]: Your comments and questions are always welcome, call anytime 88899 chart that's 88899 CHART.

[SPEAKER_09]: You are listening to an invest talk, best of call or questions, compilation program.

[SPEAKER_09]: Your comments and questions are always welcome.

[SPEAKER_09]: Call anytime, 88899 chart.

[SPEAKER_09]: That's 88899 CHART.

[SPEAKER_16]: Hi, I'm Vestock.

[SPEAKER_16]: I was hoping you guys could answer a couple of questions on valuing small caps stocks.

[SPEAKER_16]: Just in the past few years, I've kind of looked at some of the small caps stocks I've owned and I've noticed that the small caps stocks with

[SPEAKER_16]: Like a comparable smaller number of shares outstanding have performed better.

[SPEAKER_16]: And so I'm just curious if you set like a maximum number of shares outstanding when you're screening for them.

[SPEAKER_16]: Another thing is looking at their like their founding dates.

[SPEAKER_16]: So for example, a company founded 50 plus years ago and it's still a small cap stock.

[SPEAKER_16]: Does that mean probably never going to be like a mid or large cap stock and you know have, you know, a lower chance for growth potential versus maybe a company founded in the past 20 years.

[SPEAKER_16]: I'm just trying to find new ways to look at these stocks.

[SPEAKER_16]: I'll set it in normal metrics you guys talk about.

[SPEAKER_16]: I mean, those are just ones that I've kind of noticed in my own portfolio that have I feel like maybe correlated with better growth potential.

[SPEAKER_16]: So I'm just curious if you guys think about those two things and I'll listen on the show.

[SPEAKER_11]: Thanks.

[SPEAKER_11]: Bye.

[SPEAKER_11]: These are all great questions.

[SPEAKER_11]: Yes, small cap stocks are are difficult.

[SPEAKER_11]: Because typically, they have straightforward businesses.

[SPEAKER_11]: They don't have a diverse revenue stream where they have a lot of subsidiaries.

[SPEAKER_11]: A lot of large companies, they've grown through acquisition, right?

[SPEAKER_11]: They bought a lot of different companies, and they have little subsidiaries, and as they fold them into the bigger brand, et cetera.

[SPEAKER_11]: And they kind of grow in organically.

[SPEAKER_11]: Some grow organically for sure, but a lot of them build over time and make smart strategic acquisitions.

[SPEAKER_11]: So a lot of small cap names, you know, they

[SPEAKER_11]: They've kind of kept their businesses straightforward.

[SPEAKER_11]: I wouldn't say based on number shares outstanding has really anything to do with it.

[SPEAKER_11]: So we's in relation to their cash flow and their earnings in my mind because that's what matters the most.

[SPEAKER_11]: I would like to see share counts dropping over time as opposed to increasing, I'll agree with that, but doesn't necessarily have to be a large amount or small amount, let's get it.

[SPEAKER_11]: It's always in relation to its earnings and cash flow.

[SPEAKER_11]: And then when you go into how long company has been around, I would have tend to agree that the longer it's been around, if it's still a small cap name, it doesn't really have the juice to get into the mint.

[SPEAKER_11]: That's what you're going for, right?

[SPEAKER_11]: You want a small cap, you want to buy it when it's a small cap, and hope it grows into a mint cap, and eventually maybe even to a larger mega cap.

[SPEAKER_11]: That's the dream.

[SPEAKER_11]: So, if they're still stuck there over decades, well, yeah, maybe they just don't have the juice to get there.

[SPEAKER_11]: Now, it doesn't mean they can't ever get there.

[SPEAKER_11]: Usually though, it takes your leadership a new way of thinking, sometimes it's also secular.

[SPEAKER_11]: They can't have secular things against them or for them.

[SPEAKER_11]: For example,

[SPEAKER_11]: You're making baby clothes right now, due to domestic earthquakes, the baby market's not that great.

[SPEAKER_11]: So that's a headwind currently, but that could shift as well.

[SPEAKER_11]: So understand those secular headwinds and tailwinds, and they could just be right in the the sweet spot of a positive secular tailwind, I can think.

[SPEAKER_11]: kind of think of some of the recent ones.

[SPEAKER_11]: There have been recent ones around AI and AI infrastructure where they're making pennies per share and now they're making multiples of dollars per share just because of the AI infrastructure boom.

[SPEAKER_11]: So that can happen as well.

[SPEAKER_11]: So it's hard to pinpoint one particular thing that makes small caps different, but really I think it's about leadership and the mindset of growth.

[SPEAKER_11]: and the ability to grow.

[SPEAKER_11]: Now, a lot of small caps that are super recent IPOs, those might be names that probably are overvalued, mate.

[UNKNOWN]: You know.

[SPEAKER_11]: IPO it, you know, two, three, four billion.

[SPEAKER_11]: They're a small cap, they'll make any money.

[SPEAKER_11]: And they're just going to issue shares in the oblivion and there's many of those as well.

[SPEAKER_11]: So definitely they range in their quality, and their investability, and hopefully those thoughts gave you a little perspective on how I think about investing in small caps.

[SPEAKER_12]: Alright, let's get to a question from the comment section of the Invest talk YouTube channel.

[SPEAKER_12]: This one coming in from RichP, it's about a Fed rate cut.

[SPEAKER_12]: It says the Fed has decided to cut interest rates.

[SPEAKER_12]: What does it mean for investors?

[SPEAKER_12]: What sectors benefit from a low interest rate environment in the backdrop of AI?

[SPEAKER_12]: Well, lower rates means, generally, easier money and higher valuations, cuts reduce borrowing costs.

[SPEAKER_12]: They support earnings multiples.

[SPEAKER_12]: They ease a bunch of financing stress.

[SPEAKER_12]: They often spark equity upside as liquidity rises.

[SPEAKER_12]: Now tech, as well as some other sectors, communication services, consumer discretionary industrials, they tend to benefit as credit flows and demand starts to rebound.

[SPEAKER_12]: Lower capital costs may also fuel AI capex.

[SPEAKER_12]: Think about all the money that has been spent on building data centers, chip manufacturers, power infrastructure.

[SPEAKER_12]: It could boost semi-conductors, cloud platforms.

[SPEAKER_12]: It could power utilities that are tied to AI build-outs.

[SPEAKER_12]: And as yield seekers live in a world of lower rates, well then they start to turn a bonds to dividend stocks to reach to utilities.

[SPEAKER_12]: Some of those bigger, more established dividend paying infrastructure names.

[SPEAKER_12]: And those are just some of the effects.

[SPEAKER_12]: But you have to keep in mind that the rate cut was expected.

[SPEAKER_12]: The market doesn't generally wait for something.

[SPEAKER_12]: It is and does a very good job of pricing things in very quickly.

[SPEAKER_12]: Generally what you're going to see in asset price movements, isn't going to be, okay, Fed cut today, things are great, market's up.

[SPEAKER_12]: It's going to be what happened today versus what we expected and everybody expected.

[SPEAKER_12]: He fed rate cut.

[SPEAKER_12]: And so when you think about these things, as with corporate earnings, right, when a company reports earnings, yeah, you care about how much money they made last year, but what is the thing that most people are paying attention to that's forward guidance?

[SPEAKER_12]: It's the same thing here.

[SPEAKER_12]: So when the Fed cuts rates, what the market really is interested in, is their projection of the path moving forward, and what they have to say, about what that path might be.

[SPEAKER_09]: This is an invest talk best of caller questions compilation program.

[SPEAKER_09]: Your comments and questions are always welcome.

[SPEAKER_09]: Call anytime 88899 chart that's 88899 CHART.

[SPEAKER_08]: This is a special invest talk, best of caller questions, compilation program.

[SPEAKER_08]: Remember, the invest talk phone lines never close.

[SPEAKER_08]: Please call with questions, 888-99 chart.

[SPEAKER_07]: My question is about relative strength, curious just how it's calculated, and what length of time is typically used when they're calculating relative strength of a company versus the market,

[SPEAKER_07]: You know, if there's any statistics based on if a company has or 90 for relative strength or if it's lower to they typically underperform is there a sweet spot where you would find better near term performance.

[SPEAKER_07]: Just curious any information you guys have on that and thank you again.

[SPEAKER_11]: This is a great question because we do use momentum as a screening tool when we invest in companies and we typically throw out the bottom 20% meaning the bottom 20 worst 20% of stocks over the past we use six months everyone's different with the relative strength some use a year we found six months to be better year to me is a bit too long you could have

[SPEAKER_11]: companies, you know, being a long downtrend and then starting a rally and you wait, you're waiting months before they even get on your radar.

[SPEAKER_11]: So you want it to be not too long, but also not too short, right?

[SPEAKER_11]: A month is not enough.

[SPEAKER_11]: It needs to be over a reasonable length of time.

[SPEAKER_11]: So we like to use

[SPEAKER_11]: software uses a year, you just have to look up kind of what they're using to calculate relative strength.

[SPEAKER_11]: So, for example, a relative strength is 50, that means 50% of the stocks in the universe have been better over the certain time period for

[SPEAKER_11]: like investors business daily, they're using 12 months, where us at KP were using six months.

[SPEAKER_11]: So 50 means 50% of stocks are in better, 50% of stocks are doing worse.

[SPEAKER_11]: Now, you have your top, you know, those in the 90%ile, and a lot of those are trending very nicely.

[SPEAKER_11]: And the trend typically is your friend, and they typically will continue to do better.

[SPEAKER_11]: But they also are right for major reversions to the mean.

[SPEAKER_11]: Meaning, it could be in 95, 98 relative strength today, but they could be just at the end of their rally and losing momentum and a lot of the positive aspects of what the market is thinking about their business is pristine.

[SPEAKER_11]: And back a turn.

[SPEAKER_11]: So a lot is dependent on the business.

[SPEAKER_11]: Catching up with the way the market is pricing that particular name.

[SPEAKER_11]: And that varies widely.

[SPEAKER_11]: And then you get into the middle, kind of the between the 30 and 70th percentile, means that they're not the worst, they're not the best, they're just doing okay.

[SPEAKER_11]: And there, there's not really much predictiveness.

[SPEAKER_11]: There's many names that it can be consolidating sideways for a long period of time and just kind of in the middle 40, 50, 60%

[SPEAKER_11]: but being ready for breakout, those are more of you don't want to get rid of them, but you don't want to buy them based on momentum, either.

[SPEAKER_11]: You want to see other factors.

[SPEAKER_11]: So we like using relative strength, we like using momentum, it's basically what relative strength indicator is.

[SPEAKER_11]: And but you have to use it as part, like anything, part of the analysis.

[SPEAKER_11]: And when you're looking at the number, make sure you figure out what definition they are using.

[SPEAKER_06]: My name is Jacob from Arizona.

[SPEAKER_06]: I'm a pretty young investor, and then just had a few questions for you guys.

[SPEAKER_06]: I do have a lot of money kind of sitting in the bank, which I do not like, as I know that money sitting in the bank, because it's really doing anything for you, especially when you're young.

[SPEAKER_06]: So do you guys suggest playing it safer and allocating more of my portfolio towards ETF?

[SPEAKER_06]: And things or should I kind of play it more risky or the best options that you guys would give a young investor here.

[SPEAKER_06]: I appreciate our information you guys give out and I look forward to the answer in the podcast.

[SPEAKER_06]: Thank you.

[SPEAKER_06]: Have a great day.

[SPEAKER_12]: Well, Jacob, I'm glad you're thinking about the right things as a young investor.

[SPEAKER_12]: And so let's start with a financial planning 101 here.

[SPEAKER_12]: When you have an income,

[SPEAKER_12]: What you want to do is first have your emergency fund.

[SPEAKER_12]: Beyond your emergency fund, you want to have your retirement savings, maybe big purchase savings.

[SPEAKER_12]: And each of those have different time horizons, meaning you have different risk tolerances and different liquidity needs.

[SPEAKER_12]: Your emergency fund is your...

[SPEAKER_12]: lowest risk tolerance with your highest liquidity needs.

[SPEAKER_12]: It's for if you get laid off, if you become ill, if for any reason you need money now.

[SPEAKER_12]: And therefore, what shouldn't you put it in, probably shouldn't put it in an emerging market ETF, right?

[SPEAKER_12]: Very risky, though it's liquid, very risky.

[SPEAKER_12]: You probably shouldn't put it in a 10 year CD.

[SPEAKER_12]: Why?

[SPEAKER_12]: Very little risk, but not very liquid.

[SPEAKER_12]: Now look at it all.

[SPEAKER_12]: And so that is a way to put context to this answer here.

[SPEAKER_12]: If this money is money you're saving for retirement, you are young.

[SPEAKER_12]: You are young, which means you have a long horizon, which means you can take on more risk because you can earn back the money.

[SPEAKER_12]: If you lose some of it.

[SPEAKER_12]: Now that doesn't mean you just throw it at any guy on the street corner that says, hey, I got an idea, Jacob, I really need some money.

[SPEAKER_12]: But what it means is you can put it in equities.

[SPEAKER_12]: And for somebody that's not paying attention 24 7 to markets and doesn't want to do the necessary research on individual companies ETFs can be a great tool for that.

[SPEAKER_12]: There are no one-size-fits-all description of ETFs.

[SPEAKER_12]: They can be very risky.

[SPEAKER_12]: They can be very diversified.

[SPEAKER_12]: They can follow the Wilster 5,000.

[SPEAKER_12]: They can follow the Russell 3000.

[SPEAKER_12]: Or they can be leveraged single stock ETFs.

[SPEAKER_12]: Now, we've talked all the time about why you probably shouldn't buy into the latter and hold that for the long period of time.

[SPEAKER_12]: But my point is, they provide you all of these options.

[SPEAKER_12]: And so you can choose what makes the most sense for not just your general risk tolerance level, but what the purpose of this money is.

[SPEAKER_12]: Thanks for the call.

[SPEAKER_09]: On radio, on YouTube, streaming live on at vestalk.com.

[SPEAKER_09]: My question today is about beach and me equipment services, and for our podcast subscribers, 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, go for it.

[SPEAKER_09]: And co-host and portfolio manager, Luke Guerrero.

[SPEAKER_09]: This company is falling like a rock, it's down 52% Invest talk.

[SPEAKER_09]: Have a simple teenage.

[SPEAKER_09]: Everybody wants a secure financial future.

[SPEAKER_12]: Richard, do you have a question about TOL?

[SPEAKER_09]: But getting there takes strategy, discipline, and the right Information.

[SPEAKER_11]: I wonder what you think of the price of it.

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

[SPEAKER_16]: Hey Justin, I own it, just seeing what you thought of it.

[SPEAKER_09]: Invest talk is made better by listener contributions.

[SPEAKER_09]: So don't forget to call 888-99 chart.

[SPEAKER_12]: Jerk from Canada way up north, you got a question about silver.

[SPEAKER_12]: Hi, Luke.

[SPEAKER_12]: Thanks for taking my call.

[SPEAKER_02]: Yeah, I have some, uh,

[SPEAKER_02]: Silver positions and silver miners and I've just watched in the price action right now.

[SPEAKER_02]: So we hit the all-time highs on Silver like four weeks ago and some of that minor standing is that the LBMA was like experiencing some shortages and there was some bollian like flown over from the

[SPEAKER_02]: and the price action is running up now.

[SPEAKER_02]: How do you foresee any future shortages should they arise and how would the flow of bully and be impacted by this reclassification and can this reclassification explain this recent price action?

[SPEAKER_12]: Yeah, that's a good question.

[SPEAKER_12]: For quite some time, the ratio of gold to silver and how those tend to interact with each other has lacked a bit.

[SPEAKER_12]: As you've seen gold just launch over the past 18 months and for various reasons, various macro reasons, silver has started to move in those some recent price action that kind of justified the closing of that ratio.

[SPEAKER_12]: Now, you mentioned something that I think is key here.

[SPEAKER_12]: And that's something that we actually talked about on this show.

[SPEAKER_12]: I think I talked about it maybe last week.

[SPEAKER_12]: And that's that reclassification of silver into that critical mineral category.

[SPEAKER_12]: And this administration has made a big focus on these critical minerals and declaring that these are various commodities that are critical to national security.

[SPEAKER_12]: What is that going to do?

[SPEAKER_12]: Well, not only does that unlock certain tariff abilities, right, which could move the price of silver up if we are stopping the importation or increasing the cost of the importation of these minerals from miners that are in an actual.

[SPEAKER_12]: But it's not really that clear, right, because it can muddy the waters a little bit.

[SPEAKER_12]: There's the other side of the equation as well.

[SPEAKER_12]: If it is on the critical mineralistic, it could unlock all sorts of funding and debt financing for companies within the United States.

[SPEAKER_12]: And so it's kind of difficult to say exactly how things will go.

[SPEAKER_12]: I think in the short term, it certainly can lead to this price action that we are seeing.

[SPEAKER_12]: And that could continue in a long term, though, because of those competing supply and demand dynamics, very difficult to say.

[SPEAKER_12]: Now, silver is like gold, a precious metal though, you know, not as used for inflation hedges and some of the other reasons people purchase gold.

[SPEAKER_12]: It is going to be a lot more tied to the industrial cycle because it is an industrial metal.

[SPEAKER_12]: And so, if in the short term, you see this price action, wind industrial demand globally starts to recover.

[SPEAKER_12]: You could see further upward movement as well, which is why I think that silver even now is still a good thing to include in your portfolio.

[SPEAKER_09]: Thanks for the call.

[SPEAKER_09]: You've got two for the price of one.

[SPEAKER_09]: Justin Klein and Luke Guerrero are here and they're taking your finance and investment questions now.

[SPEAKER_09]: 888-99 chart.

[SPEAKER_14]: Hi, Duncan from New York.

[SPEAKER_14]: Thank you for all that you do.

[SPEAKER_14]: I got a quick question, not about a stock ticker, but just as you noticed, the stock market is actually starting to go a little south.

[SPEAKER_14]: I mean, guess it was about time for the bubble to slowly deflate.

[SPEAKER_14]: With that being said, I still do dollar cost averaging, but I actually have been building a little brokerage account that had Escov, a little bit of gold, and just like a one-month treasury.

[SPEAKER_14]: Let's say that the stock market actually does have like bottoms out.

[SPEAKER_14]: Do you think it's smart for me to start taking some equity from that brokerage account to then deploying it into the equities I have for single stocks?

[SPEAKER_14]: Just wanted to know your two cents.

[SPEAKER_14]: Obviously, when you see red, some people get scared.

[SPEAKER_14]: I actually get excited.

[SPEAKER_14]: So I just want to make sure that I take advantage of these downturns.

[SPEAKER_14]: Thank you very much and have a good day.

[SPEAKER_14]: Bye.

[SPEAKER_11]: Yeah, I think you should probably say a better you're taking that capital.

[SPEAKER_11]: You're talking about other account with Esca, which is effectively cash that's effectively a money market account, some gold.

[SPEAKER_11]: And I think one month's treasury is now, I probably wouldn't sell the gold, but I think the Esca, in the one month's treasury,

[SPEAKER_11]: dip into the market and buy names or ETFs that you've been eyeing on market weakness.

[SPEAKER_11]: I think that's a good idea.

[SPEAKER_11]: I think the market is going through a process of working off a lot of the excess from this rally and over valuation, obviously AI hype.

[SPEAKER_11]: And there will be names that have stickiness and in good long-term businesses, others, like I said, will crash and burn.

[SPEAKER_11]: But this is the time where you do your research.

[SPEAKER_11]: create your bylists, create your watchlists so that on those down days you can slowly trickle some of that safe capital.

[SPEAKER_11]: That's what it is.

[SPEAKER_11]: It's not equity.

[SPEAKER_11]: It's capital in that other account that's in Esca, that's in treasuries that you know, over the long term, those will underperform equities.

[SPEAKER_11]: And so you want to be ready when there's blood in the streets, potentially, or at least just just a, you know, eight, ten percent pullback in markets, which is normal, which is healthy.

[SPEAKER_11]: And that's probably what we're, you know, in store for over the next, you know, a couple months or three.

[SPEAKER_11]: And that is the time to be reallocating some of that cash or cash, like investments.

[SPEAKER_11]: Thanks for the call.

[SPEAKER_08]: Got a question for Justin or Luke?

[SPEAKER_08]: You're the best person to ask it.

[SPEAKER_13]: 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?

[SPEAKER_08]: Invest talk is ready 24-7.

[SPEAKER_08]: I would really appreciate if you could give me an entry point for a company called Metronic MDP.

[SPEAKER_08]: Call Invest Talk.

[SPEAKER_08]: 888-99 chart or post your questions on the Invest Talk YouTube channel.

[SPEAKER_12]: Alrighty, this is Invest Talk, and our show is about questions, so let us roll in another listener question now.

[SPEAKER_01]: Hi, I've heard past callers ask about questions about puts or leaks, and I sort of understand what a lot of those term mean, we're talking about different types of traits, but I don't have a full understanding of it, and I do want to learn.

[SPEAKER_01]: I've tried looking up some information about that online, but a lot of it is very technical

[SPEAKER_01]: information that seems to be geared towards people who already know what that all means for YouTubers or maybe selling different types of courses, which if you have a pay option that you would recommend, I would do that.

[SPEAKER_01]: I don't mind buying a course that is informational and helpful.

[SPEAKER_01]: It's hard to find when it's legit, though.

[SPEAKER_01]: I was wondering if you might have any resources that

[SPEAKER_01]: are trying to learn and understand this that are trying to get a full understanding of determinology, the different depth of trees, how to apply them, what to look for that would tell them when to apply different things.

[SPEAKER_01]: I would appreciate that very much, and thank you.

[SPEAKER_12]: That is a very big and very important question that I don't think we have the time to dive into fully on this format.

[SPEAKER_12]: Now it is true, there are a lot of

[SPEAKER_12]: paid classes on these types of things.

[SPEAKER_12]: And you had the top mentioned options, puts leaps all of these things that are a bit more complex in terms of their strategy than when you talk about just building a typical equity bond portfolio.

[SPEAKER_12]: And I can direct you towards any one of these paid services that can give you a lesson, right?

[SPEAKER_12]: That can help you learn about the basics before you move on towards another layer of complexity because a lot of the times the conversation is complex because the assumption is that if you're looking at these types of strategies, you have a foundational knowledge.

[SPEAKER_12]: But here's what I will say, that's this plugging invest talk a little bit.

[SPEAKER_12]: We have started on our YouTube to pick back up our series, the invest out classroom series.

[SPEAKER_12]: And what it achieves to do, what it aims to do, is help to teach you

[SPEAKER_12]: about concepts that may be complex in a very simple way, and given that question, we will make sure that one of the next episodes we do is an explanation to try and simplify and help you understand all of these very complex top topics within the option space, and like all of our other episodes.

[SPEAKER_12]: It'll be available for free.

[SPEAKER_12]: So just head over to our Invest Talk YouTube channel that is in Invest Talk with two T's look for the Invest Talk classroom series.

[SPEAKER_12]: And we'll have that episode out to you as soon as we can.

[SPEAKER_12]: Thanks for the call.

[SPEAKER_09]: You are listening to an invest talk best of call or questions compilation program.

[SPEAKER_09]: Your comments and questions are always welcome.

[SPEAKER_09]: Call anytime, 88899 chart.

[SPEAKER_09]: That's 88899 CHART.

[SPEAKER_09]: This is an invest talk best of call or questions compilation program.

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[SPEAKER_11]: Jerk from Canada once again was like about fundamental analysis.

[SPEAKER_02]: I just didn't.

[SPEAKER_02]: Thanks for taking my call.

[SPEAKER_02]: I call about Thursday about a ETF vote and you said that some of the oldings were good and some were bad.

[SPEAKER_02]: The my question is, is how do you pick a part of the good and the bad when you're doing that and like what's your order of operations?

[SPEAKER_02]: for doing fundamental analysis if I'm trying to dig into some of these holding.

[SPEAKER_11]: Sure, it's a great, a great question, especially in an ETF that's kind of a fattish like this, where there are a lot of, they're all doing well because they have a lot of tailwinds from what's happening in the broader market, so they're a broader economy.

[SPEAKER_11]: Uh, so right now things are are going well, but I look more about it.

[SPEAKER_11]: What's the long term profitability of this business?

[SPEAKER_11]: What happens if, you know, there's a natural slowing of demand for AI data infrastructure.

[SPEAKER_11]: Was there business going to go back to losing money like it had been, you know, years in the past?

[SPEAKER_11]: That's a big question.

[SPEAKER_11]: Then I also want to look at its balance sheet, because they have a solid balance sheet, or they have a ton of debt that needs to work through.

[SPEAKER_11]: That's a big question for me.

[SPEAKER_11]: And then obviously the trajectory of its earnings estimates from

[SPEAKER_11]: from their analysts are they accelerating the decelerating what is what is next year going forward look like.

[SPEAKER_11]: So those are some of the things that I'm looking at but there's also a lot of kind of sub considerations as well.

[SPEAKER_11]: So what part of the supply chain are they in?

[SPEAKER_11]: Is it something that

[SPEAKER_11]: No matter what type of chips are in there, if it's still running, if that data center is still running, then there's gonna be services, there's gonna be maintenance that allows them to still make profits, right?

[SPEAKER_11]: So that's why I kind of like the names that are closer to the electrical power demand, because you could switch out Nvidia chips or AMD chips or whatever, and that might be flow, right?

[SPEAKER_11]: What it looks like is the demand for these type of data centers is going to continue, at least operating, upgrading, maintaining, et cetera, and those are the type of businesses that we are looking at.

[SPEAKER_11]: What is going to be part of this supply chain over the long term, no matter what technology is in fact, because AI is not going anywhere, but it will evolve

[SPEAKER_11]: depending on the technology, et cetera.

[SPEAKER_11]: But what is clear and obvious is that the infrastructure to run these systems.

[SPEAKER_11]: is going to be pretty consistent.

[SPEAKER_11]: That's why, generally, I like the idea of this this ETF VOLT, but, you know, there's going to be some good with some bad and you really have to parse all those things and more, you know, this is such a, it's hard to summarize it and, you know, just a couple of minutes, but those are kind of the main points that I would hit when looking at the individual names.

[SPEAKER_02]: Okay, great.

[SPEAKER_02]: Thank you for your time.

[SPEAKER_02]: I'm always appreciate it.

[SPEAKER_11]: No problem.

[SPEAKER_11]: Thanks for the call.

[SPEAKER_02]: Hello, my question is about a 457 retirement plan, something that I've heard.

[SPEAKER_03]: Many people talk about, you know, it might not be offered for everybody's employer.

[SPEAKER_03]: This might understanding that that is an account that you can withdraw from when you retire, even if you're not, not the retirement age of 59 and a half.

[SPEAKER_03]: And it's taxed just like a 401k.

[SPEAKER_03]: I haven't heard much about it, but I didn't know if you guys could extend on that and talk to me and said about that account.

[SPEAKER_03]: Thank you very much.

[SPEAKER_12]: I was listening to him talking.

[SPEAKER_12]: A 457 retirement plan comes really in two flavors.

[SPEAKER_12]: Governmental ones, so city, state, county, all those types of things.

[SPEAKER_12]: And non-governmental ones, certain non-profits.

[SPEAKER_12]: Like 401K's, they're contribution limits.

[SPEAKER_12]: They're special catchup rules in the last three years.

[SPEAKER_12]: Before no more retirement age, you can contribute up to double the annual amount.

[SPEAKER_12]: If you under contributed in past years, there are the ability to roll them over.

[SPEAKER_12]: In two IRAs, 401Ks or other 457 plans, there are MDs which start at 73, and their investment options offer mirror 401Ks with mutual funds, target date from refunds, and the like.

[SPEAKER_12]: One way they are different though, especially the governmental ones is that the heavy unique feature compared to those 401k's or their 4 or 3b's, there is no 10% early would draw penalty if you leave your employer, even if you are younger than 59 and a half, you can start withdrawing as soon as you separate from service.

[SPEAKER_12]: If you quit, if you retire, if you're late off, but these regular income taxes will still apply.

[SPEAKER_12]: Now, if it's a non-governmental 457B, well, with draws are typically more restricted and may depend on your employer's specific rules.

[SPEAKER_12]: So if your government employee is likely that you do have this benefit here, and I think when you have access to these types of accounts, having that tax diversity can be incredibly beneficial.

[SPEAKER_08]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.

[SPEAKER_08]: It's important for the listener to understand that not all comments made will apply to them.

[SPEAKER_08]: Specifically, nothing said she'll be taken to be investment advice.

[SPEAKER_08]: or shell statements on this program be considered an offer to buy or sell security.

[SPEAKER_08]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review a prospectus before investing.

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