The End Of The Selling Isn’t Necessarily The Time To Buy (Uncut) 03-15-2025

The End Of The Selling Isn’t Necessarily The Time To Buy

The end of the selling is not always the beginning of the buying. And so this is from Howard Barks, one of the smartest people in the business. He said, look, there’s always a trade-off in a seesaw between the risk of missing out, which we were in for the last two years, and certainly MAGA magnified that.

Excuse me, MAGA, the Magnificent Seven magnified that, and the fear of losing money. And we’ve started shifting now to what should I be doing to not lose my money? And that’s actually a great thing for stocks. Welcome to the next edition of Rise Up, our weekly update on Wealthion to really share with you what’s going on in the market, how can you actually make better decisions in this volatile market, and really how to grow your portfolio despite this as well as protect it.

You know, it’s been another very volatile week, and so we’re excited to be with you here today to share some perspective. My name’s Terry Kulson. I’m a certified financial planner.

I’m a managing partner at Rise Growth, and I’m the co-host of this show. I also have my co-host, Joe Durand, with me. And as you know, Joe is a CFA.

He also is an entrepreneur, led one of the largest RIAs in the country as a fiduciary, and also is our chief investment officer here at Rise Growth. Welcome, Joe. Thank you, Terry.

And I find it ironic that I was on vacation on your birthday in Florida, so I know the show went great. It’s obviously been an incredibly tough couple of weeks, and we’re going to talk a lot about it. This is a special edition this week.

We’re not going to do our usual three questions because all the questions have to do with the market. And we’re just really thrilled, Terry, this week. As you know, we try to find you brilliant investment minds, and we have one of the best today.

A CFA and a CFP runs a $6 billion firm, just under $6 billion, out of Boston, Massachusetts. Kevin Grimes. Kevin, welcome.

Kevin has a distinct ability that he’s not just really good with portfolio management and managing building plans, but he also picks individual securities. So we can talk a lot about some of the individual things happening in the market. Kevin, it’s great to see you.

Great. Well, it’s great to be here and be part of Rise Up. I’m looking forward to the conversation.

When I think of Kevin, Joe, I think about the five Cs. He’s a CFA, a CFP, a CEO, and a CIO. And then the fifth one, he’s just a cool guy.

So I’m really excited to have you. And I think the way that you help clients will be so calming for our viewers today. So we’re really happy to have you on, especially this week.

So let’s talk about this week. Let’s just do a quick update. As of Thursday, which is March 13th, the U.S. stock market today is down 1.4%. The tech-heavy Nasdaq also closed down 2% after returning their heavy losses suffered this week.

The Dow Jones industrial average closed down 1.3% as the U.S. tariffs continue to raise concerns that the American economy is potentially facing another big C, a correction potentially, or at least a downturn. So there’s a lot of reasons for all this market mayhem today. There’s a trade war.

There’s just a lot of questions and concerns from our readers. So I’d really love to hear your perspective on this, Joe. Okay.

Well, look, I think first and foremost, before last week, we were talking about the tariffs and the potential implications. And if there’s one thing that we’re learning is that the tariffs are first and foremost in everyone’s mind. And the biggest issue is what appears to be no coherent plan around the tariffs.

I think when we went into the early part of this year, of course, everyone expected tariffs. The president made no bones about it when he was running as a candidate. But it seemed like it was going to be used as a bargaining chip to have other countries come to the table and to get what we want from the countries that we’re working with in partnership, selling and buying their products.

And now it appears to be a permanent state of revenue recognition and increasing revenue. And unfortunately, it’s being done in a very unpredictable way. Terry, I know you’re sad about this, but yesterday they said 200% potential tariffs on wine and champagne, which is way beyond what anyone imagined.

And it’s not just that that’s the issue. It’s that it appears to be almost capricious, the way that these rates are being thrown around. It’s going to be 50% on steel, then Canada does something back and says, we’re going to charge 25% on energy, and then it’s, well, we’re going to charge another 30% on steel.

And it doesn’t appear like there’s a thoughtful discussion going on around these tariffs. And I will just share, tariffs are usually well handled privately and then publicly administered once there’s been a discussion. But we seem to be doing things in reverse here.

We’re publicly talking about the tariffs that could happen, and then doing the worst thing that could possibly happen for business leaders, which is going back and forth. And again, regardless of your political affiliation, you want to have consistency and business leaders need predictability to make investments. And that makes it very hard if you’re running a business and you don’t know what you’re paying for your raw ingredients, and you don’t know what you’re going to be taxed when you’re shipping them to a new country, or even keeping them in the US.

It makes it inordinately difficult to figure out how should I invest in my business. And so what you’re seeing now, we’ll talk about the markets in themselves, but the thinking that’s going into the calculus is the economy is slowing, it appears like we might be positive, might be bumping into a negative quarter for the first time in a long time, this quarter that just passed, government spending is going down, that’s going to drive GDP down. And we’ve got a lot of terminations happening with government employees, that’s going to also impact.

And so it’s starting to give people a nod in their belly. And there doesn’t appear to be any backing off by the President or any of his spokespeople. They’re all very clearly preparing us for a self-induced recession, which will certainly bring inflation under check, because nothing is better for inflation than people simply not having money.

However, if you’re adding tariffs, those goods could still be more expensive. And all that means is you end up with what’s called stagflation, which is inflation that’s higher than you want, and economy that’s growing less than you’d like or even declining. And so, Kevin, I know that you’re dealing with this every day.

Just before we get into the markets, I’d love to get your thoughts on how you’re thinking about the impact, how real it will be for earnings and for potential company adjustments that you need to make. How do you think about all of this? And how are you dealing with this day to day? So I like to think that there’s always something to worry about, right? There’s always problems going on, geopolitical problems, there’s political issues. You got to worry about the economy.

It’s one thing after another. It’s a conveyor belt of things to worry about that we were always trying to deal with. I like to say, and it’s common terminology, but the market climbs a wall of worry, right? There’s always problems.

And if you’re waiting for a period of time where there’s not going to be any problems, then you’re going to be waiting for quite a long time. And by the way, that’s probably not the best time to invest. That said, uncertainty is a different thing than worry.

Uncertainty means that when you’re a business leader and you’re looking out between right now and three months away, you don’t know what you’re supposed to do. You don’t know how to price your service. You don’t know where you’re going to be getting your supplies from.

You don’t know what to do today. That’s a problem. And so, for an investor, when there’s uncertainty, especially with monetary or fiscal policy or something like that, that’s going to impact valuations, when it’s right in front of you over the next three months, that’s when it’s uncertain.

The market can’t handle that. When things are further out, the markets tend to worry about what’s right in front of them, at least the stock market. Bond market looks out a little bit further.

But yeah, that’s what we’re dealing with right now. I’ve heard the term recession being thrown around now. I guess that’s something we could talk about too.

If you take out the three-month pandemic recession that we had before all the $6 trillion in stimulus that came after that, we haven’t had a recession in 17 years, going on close to 20 years. It’s been something that just has not been an issue because economic growth has been so slow and the Fed’s been able to just absolutely stimulate. The real reason is there’s been no inflation to even think about.

Now, when you have the threat of inflation hanging on out there, we’ve got some decent numbers this week, although none of these numbers reflect anything that has to do with the tariffs because none of us know anything. We have no idea what’s actually going to come down the pipe. You look out and you think about, you can’t have a recession when you have unlimited stimulus.

But when you have a situation where the government can’t stimulate because of the threat of inflation, maybe we’re back to having a business cycle. So we talked last week about keep calm and drink wine. You were off playing volleyball in Florida, but we were given some advice.

But even today, there’s already tariffs on wine and whiskey and so on. But look, you have to remember, again, we’re in the midst of a correction. We’re down now over 10 percent on the S&P, much more than that on the NASDAQ and from the peaks.

And I’d share just a couple of things. Even since 2000, I just looked the last 11 years, which has been a fantastic time to be an investor. We’ve had five corrections.

We’ve already had five corrections. This is the sixth. And so it is a normal thing to have a 10 percent drop every two years or so.

It used to be every 18 months. It’s stretched out. It’s also not uncommon to have a 20 percent plus.

That’s called a bear market for nomenclature. It doesn’t mean anything. It all feels awful.

And so there are parts where it’s regular noise. But what is disheartening about this particular decline, to me at least, is we’re down 11 percent. And until people start to really worry about losing money rather than, oh, it’s my opportunity to jump in here, we’re probably not over.

Like, I really believe in the Warren Buffett expression, you know, run in when everyone’s running out, run out when everyone’s running in. Well, I still see the inclination for most people is to say, what should I be buying? And yet we’re in a risk off environment right now. You’re seeing that with gold hitting new highs.

You’re seeing it with interest rates holding steady, not doing what they should be doing, which is actually declining significantly with the market going down. I think what you’re seeing is, and you’ll see like yesterday, we had a temporary bounce in names like Tesla that have been hit very, very hard. And so what you need to see is a simple gauge here, the VIX, which is the volatility index.

How much are people paying for? It’s called the fear gauge for option pricing. And we’re still in the mid-20s. Now, the decline of the, really the speed of this decline, because it’s happened very quickly in two and a half weeks, you should see a VIX in the 30s and the mid-30s.

That’s a good indication. Again, I’m not a market timer, but if you want to know when’s a good time to get in, typically, you want to see people being very afraid. And unfortunately, even that big down Monday, where we did see VIX start to spike, it kind of hit 28 and then it tempered down.

And I, again, having done this for 37 years, you need people to be pricing in a panic. And it’s been very orderly, even though it’s been very, very fast in three weeks, we haven’t had any panic. And what you’re seeing is you are seeing some margin calls, you’re seeing the sum spreading out.

It’s not just the MAGA names getting hit now, it’s happening to small caps. It’s happening to some of the more conservative names. We’re now seeing some of the consumer staples get hit a little bit.

Names like Apple that have been holding up really well, they’re now coming down. And that’s because people are selling now some of their stocks that have held up really well. And so again, I would just say in the short term, you should think about what you want to buy.

And Kevin will give us some suggestions here. But also, the end of the selling is not always the beginning of the buying. And so this is from Howard Barks, one of the smartest people in the business.

He said, look, there’s always a trade off in a seesaw between the risk of missing out, which we were in for the last two years, and certainly MAGA magnified that. Excuse me, MAGA, the Magnificent Seven magnified that, and the fear of losing money. And we’ve started shifting now to what should I be doing to not lose my money? And that’s actually a great thing for stocks.

But I don’t know that we’ve hit enough of a seesaw to allow for the pendulum to swing. And there’s no clarity about how does this get fixed. It’s not like the administration is saying, oh, we’re just getting on tariffs, and this is what we’re going to do.

The president’s trying to correct something that’s true, which is that other governments mistreat us as trading partners. But it doesn’t appear that there’s a cohesive strategy, because he’s linking it to drugs coming over the border and immigrants coming over. And so it doesn’t appear that this is just an economic battle that we want to straighten out.

And there’s no reason to have this debate in a public marketplace. It could be happening quietly with the countries that we’re meeting with and say, this is what we want to straighten out. So again, I think the uncertainty creates some concern about how does this get fixed quickly.

And so it might just be drips and drabs on and on and on as the market, again, CEOs wait to make investments, wait to do the acquisition they were going to do, wait to do the expansion they were going to do. All of that can create a dampening effect on equity returns. And of course, on top of that, Kevin, we’ve had really high valuations, especially in stocks that I know you have not been a big fan of lately.

So how do you think the role of valuations and where would you be going in an environment like this? Yeah, so I think there’s a lot there, Joe. And whenever you have a market move, a big one down or up, you always have to put it in perspective with what just happened, right? And we just came off of two years in a row with the traditional cap-weighted S&P 500 up over 20%. And so one quick study, look, you guys have talked about it every week.

And I think everyone’s built a lot of ink about talking about the MAG 7 in the narrow market. But when you look at, one thing we looked at was just we took the cap-weighted S&P 500. The bigger companies are weighted more.

The companies have larger market caps, and that’s their number of shares times share price. That’s how big of a company you are. And just so happens the MAG 7 are the seven biggest companies in the S&P 500 right now.

And you look at the difference between the cap-weighted S&P 500 and the equal-weight S&P 500, and we are at historic discrepancies in return. And the equal-weight S&P 500, every single company is 0.2%. They’re all weighted the same. And if you look at the two-year disparity returns, it’s a 30% difference in return up until the beginning of this year.

That’s an enormous discrepancy. The last time that happened was 1999. And the thing that followed was a tough go for stocks, but primarily for the stocks that led that advance, which were at the time, everyone was really excited about the internet.

And I’m not saying that we’re going to have a lost decade or that MAG 7 are bad companies because they’re not. In our portfolios, we own five of the seven. But even then, we’re never going to wait any individual stock in a diversified stock strategy.

I’m not going to wait a stock at five or six or 7%. And so it’s been a difficult market to try to keep pace with a cap-weighted index. But now you’re seeing things unwind.

And you’re seeing areas of the market that have been completely unloved, like developed foreign stocks. Look at the EFA block, even emerging markets that are having a much better year than what you’re seeing in large cap US. So as far as stuff to buy right now, sure, I think valuations are an issue.

And that’s kind of coming out of the market right now. And I agree with you, we have not had panic yet. Usually these things, you get a nice little spike in the VIX at the end there.

And it kind of puts an exclamation point at the end of the move. We haven’t had that. Not saying we have to have that.

But look, if you’re a long-term investor, and you’re out there focused on high-quality companies, it’s a great time to be shopping right now. And one strategy that we use in my firm, looking at companies that are paying dividends, companies that are growing those dividends, have grown them for years and years and years on end, that’s probably a pretty good area to be looking at. That’s an area that’s been out of favor, that hasn’t participated in the type of returns that the cap-weighted S&P 500 has.

Those are great companies, great cash flow, and also probably a pretty decent way to position in an inflationary environment with dividends that are growing. So that’s one idea, and there are others. You know, what do we think about credit spreads right now? You know, credit spreads remain at multi-year lows.

And even though there’s a lot of concern about tariffs, there’s still a lot of demand for high-yield investments. And so there’s falling interest rates, which could be considered a real positive view here. And there’s also a high demand for private credit right now.

What are you guys thinking about the credit markets? So, all right, right now you’re in my wheelhouse, Terry, because this is, you know, one of the biggest, in fact, I think our biggest strategy that we manage is a tactical credit strategy. And we will own higher-yielding companies in areas of the bond market when trends are intact, and we’ll kind of run for cover when they’re not. And we’ve been on the credit tree for years.

I mean, if you look back over the last three years, last five years, the high-yield bond index has had lower standard deviation than the ag. Standard deviation meaning volatility. How much are things moving around? And that just doesn’t happen, right? And so it’s really been all of the credit-sensitive areas of the bond market that have been moving up and down and all around trying to guess what’s going to happen.

And the credit markets have been steady-eddy. And we can measure how credit markets are priced. Credit, by the way, being what are companies that have a risk of default? What are they yielding relative to a U.S. treasury, which is not going to default, we don’t think.

So you look at credit spreads, and when they widen, that means they’re yielding more than, you know, a bigger yield over treasuries than they were previously. And when they narrow, it means they’re yielding less. And so narrowing means that they’re more expensive than they were before.

And we were at, we were in the twos, like we were in like a, I don’t know, 2.6%. You know, we were in the twos for credit spreads. That’s as tight as they get ever. Like, go back in data series to the beginning.

That’s as tight as it gets. And even now, in the last couple of weeks, you know, things have widened a little bit, but it’s really been because treasuries have rallied. Yields have come down in treasuries.

Just for the people who aren’t super proficient in bonds, that basically means that if the 10-year treasury is yielding 4.3%, you’re getting a 6.3% spread for a higher risk company, an extra 2% or 50% more in yield. But obviously, the federal rate has gone up, and therefore, the gap maybe is narrowed. And so there’s lots of credit available for these firms.

When it widens, it means the risk of recession is higher, right, Kevin? Yes, absolutely. It means that the probability of default in the credit area is higher, and we haven’t seen that. And honestly, until that happens, this is a stock market thing.

You know, until that happens, I’m looking at a correction in stock prices, maybe buying opportunity. But if there’s going to be a recession, you’re going to see credit spreads wide, and you’re going to see high-yield bonds sell off. And for you at home, if you want to make a simple gauge for that, maybe just take a peek at a high-yield bond ETF.

I’m not saying to buy these. They’re just the biggest ones out there. But JNK or HYG, a couple of ETFs out there that are widely followed.

When you start to see those things fall apart, then you should start to be worried. And so, Kevin, I think this is a very important distinction here between, like, if we compare our two previous big bear markets, the 2011 Great Recession, which was everybody getting hit hard, spreads widening. That happened also during the early stage of the COVID.

And then compare that to 1999, which was a 50% decline in the S&P 500. By the way, 1999 and 2008, those were both 50% declines in the S&P 500. But the difference was that the decline in 1999 in the S&P 500 was predominantly driven by the NASDAQ and the bursting of the internet bubble.

And value stocks actually did quite well throughout that period. In fact, we’re delivering positive returns while the growth stocks were being hit because it was a valuation bubble burst rather than a recession. And so I think Kevin’s highlighting something very important.

If it is going to be a recession, it will be seen in the spreads between company debt that is higher risk and the treasury. And you can see that by looking at high yields. And we haven’t seen that yet.

So right now, what you’re seeing is a correcting of valuations, most especially in the most expensive stocks. And that is what happens when you have uncertainty, what basically happens is you need the risk premium to go up. People say, I don’t know how this is going to work out.

I don’t know if there’s going to be reciprocal taxes for Apple in China, or for Tesla, or for anyone else. And then that doesn’t mean the companies aren’t survivable. Doesn’t mean they don’t continue to pay their debts.

Doesn’t mean they don’t continue to grow. But people don’t believe they’re going to grow at the same rate that they were growing and therefore valuations come down. And so you have valuation recessions and you have economic recessions.

And this might be a valuation recession. This might just be, we got to correct for some over-exuberance and optimism because we priced in a lot of optimism after two consecutive 20% plus years. Yeah.

Well, we talk a lot about recession or correction, but I think what’s important is we reflect the viewers’ questions. And we’re lucky to have Kevin today because he works directly with clients each and every day at Grimes and obviously at Weekly Financial Group, our last week group. And there’s always questions coming in.

So Kevin, as the markets are swinging, what are some of the questions your clients are asking you? Well, honestly, I think the biggest is kind of what we’ve been touching on here is that, is this something I should be worried about? Is this something that is a normal run of the mill type correction that we haven’t had recently? But look, my clients, they’ve been around for a long time, been investors with me for decades. They’ve been through good times and bad. Is this a normal type thing or is this something that’s a little more nefarious that we need to worry about? And they can wrap that in tariffs or doge or whatever it is that they want to bring into it, depending on what their views are.

But it all comes down to, is this normal course of action or is this start of something a little more scary? And my answer to them is that we don’t know yet. So far, it’s not the beginning of something that is scarier. Could it be? Absolutely, it could.

We don’t know yet. But with our portfolios, the way we look at managing our accounts for clients, we do all different types of strategies, but some of the strategies that we employ for them, we don’t just buy and hold and kind of hope for the best. We are actively managing risk.

And in those portfolios, we have started, at least on the equity side, the stock side to de-risk a little bit. We have taken some risk down. There’s something we didn’t really talk about yet, but kind of related to the MEG-7 is you’re kind of seeing that on the institutional level, and that might be driving some of this.

I mean, a lot of the hedge funds out there, they were all piled into a lot of the same trades. A lot of the big institutional players were piled into the MEG-7 in particular. And when there’s unwinding of leverage there, when risk comes up, they’re forced to sell these names.

So far, that’s what I’m seeing, is kind of an unwinding in the beginning of a de-risking. We’ll see where it stops, but right now, to reassure clients that we have taken some steps, but that we’re still feeling good about that. And Terry, you should point out, leverage, the amount of borrowing being done by professional investors, by hedge funds, is at an all-time peak.

So even though there’s $9 trillion sitting in the sidelines in cash, waiting to get invested, you also have trillions of dollars that have been borrowed that are going down in the markets fully invested and levered. So if you have $1 invested, you actually have $4 invested, and three of it is debt. So that forces you to sell more than you would want in stocks that you might actually want to hold on to, to pay off the margin calls.

So there’s a lot of professional debt. And interestingly enough, consumers’ household balance sheets are good, and corporate America’s balance sheets are good. This is really a little too much frothiness at the edges, with too many people who had to catch up with what’s happening in the market, concentrating to the very few stocks that were driving the entire market, half of last year’s gains in seven stocks.

That’s a problem. And again, I think you need to just find a parallel. Is this more like 1999, where stock picking and being in the right allocation is really important? Or is it more like 2008? Right now, it feels a lot more like 1999, which means it might be abrupt, and it could recover very quickly.

And you can never know when it’s going to rebound. I also say to people, even if it becomes a bear market and goes 20% down, we’re already past halfway on it. So again, you don’t want to do anything extreme.

I always say, you want to make bold but not heroic moves. The way Kevin is doing it, to say, let’s mitigate a bit of the risk here. Because you’re probably not, with all this uncertainty, going to make a V bottom and go straight up.

Take your time getting reinvested. Take your time lightening up your risk. And don’t sell everything.

Sell the things that are overvalued, that maybe will continue to readjust if there’s continued uncertainty. Because the story with the high valuation stocks is, the longer the uncertainty goes on, the less people will pay for their potential growth. And again, I don’t know what the administration would need to do to suddenly change things.

They’ve told us they’re not going to do anything. In the last week, they’ve had ample opportunities, including today, to say, well, we’re going to dial it back. And of course, we care about the stock market.

And they’re saying the exact opposite. What they’re basically saying is, there’s going to be some pain. We’re going to do this because it’s the right thing to do.

And we want to drive pricing down. And so it’s unconventional. Because honestly, I honestly believe that, like the first time that the president, Donald Trump, was in office, he cared a lot about the stock market back then.

And now he clearly cares more about winning these battles. Again, and in the meantime, you don’t want to do anything silly. You don’t want to make extreme moves that cause you to miss.

Because again, most of the gains are made in just a few days throughout the year. They’re not made consistently every day. They typically happen 8 to 12 days are the majority of the market’s gains.

And if you’re not there for it, you’re going to be there for the volatility, but not at the upside. That’s right. You know, Joe, you mentioned 1999.

And some of our viewers weren’t even alive. They weren’t even born at that time. So you know, I think we have to think about our viewers.

And a lot of them have questions. I mean, some of them are asking, should I just shift to cash or maybe fixed income? Because of where rates are right now? Kevin, what do you recommend for our young investors who have a very long time horizon? Well, first, I would say, just because you’re young doesn’t mean that you have a long time horizon, right? Like time horizon is when do you need the money from your portfolio? So if you’re saving for a house or down payment or a big purchase in six months or a year, you have a very short time horizon, probably a lot shorter than your parents. If you’re talking about your 401k, and you’re, you know, a 25 year old, and you should be invested in stocks, and you should always be invested in stocks.

And every two weeks, money’s coming out of your paycheck and going in. And so what’s the best case scenario for you is that the market goes way, way, way down, and it stays down for 40 years. And then it goes up a whole lot at the end, because then you would have been able to buy a lot of shares every other week in your 401k.

And you and then you get to benefit at the end when it all goes up in value at once, you’d be able to accumulate as many shares as possible. So for a long term investor, none of this matters. It matters zero.

What a matter when it matters is when you need the money, if you’re living off your portfolio, if you’re taking a drawer out of the account, if you have a big purchase coming up, if you if you need money for the unforeseen event, that’s when you know, you have to, that’s where you got to start being more, more careful. And that’s where you might want to think about, about different strategies. But just to touch on things, Terry, you know, I talked about credit, but even just several bonds in general, bonds have had their worst period for investors ever.

You’re going into this year, the five year compound return of the aggregate bond index was negative. That means you earned on average negative for five years. That’s terrible.

That’s never happened before. But guess what? That’s usually when it means it’s a decent time to be investing, right? And so you look at one simple thing we look at, we look at the earnings yield of the S&P 500. So that’s basically how many dollars in earnings you get divided by the share price.

So compared to the bond yield of the 10 year treasury. So earnings yields basically the inverse of the price earnings ratio, which you’ve probably heard about versus the 10 year treasury. And guess what stocks are riskier than bonds, there should be a premium there, you should get paid a premium for taking risk.

And when you looked at the at the beginning of the year, anyways, before, you know, things have moved, look at the beginning of the year that they were at parity. The last time that happened, Joe probably knows it was 1999. Like he’s been saying, it gets back to you look at the discrepancy returns between the top of the market and the average stock, you look at the pricing of stocks versus bonds, it all goes back to 1999.

And, and so that’s, that’s probably a good analog and probably experience. Hopefully, there’s no terrorist attack and widespread corruption scandals like WorldCom and Enron to mix things up. But, but I think that’s what we’re looking at.

So bonds, honestly, right now, you’re getting 10 year treasuries at 43, 4.3%, something right now. We built our tactical bond portfolio, it was at point five, right before just before the pandemic, point five is where we were at for 10 year treasury yield. So you’re getting a good yield, you’re getting a good base yield right now, four to 5%.

You know, investors, they could think, well, what’s the right yield? What should a treasury treasury be yielding any given point in time? And I say to myself, well, what’s GDP growth expected to be two to two and a half percent, hopefully, and what’s inflation going to be? I don’t know, two to two and a half percent? Well, two, 2% plus 2% is four, two and a half and two, two and a half is five, it should be somewhere between four and 5%. And that’s where we are. And so we’re at a, we’re at a reasonable yield.

Buying bonds is not a bad thing. But running for cover for a long term investor right now is probably a bad thing. And I just want to highlight this, Terry, you and I both know about the bucketing strategy.

And whether you’re young or old, what Kevin said is really true. You should think about your pockets of money and you have three buckets. One bucket is what I need for the next six months.

That should be in cash. And fortunately, you’re getting paid for that cash right now if you have it in a high yielding savings account. The next pocket is money I need for the next five to eight years.

I’m buying a house. I’m taking a big vacation. I’m looking to make some big purchase.

That money, you don’t want to put all in stocks. Your time horizon is really five years. You probably want to have a balanced portfolio on that.

And then there’s the money that’s longer than eight years, 10 years. You want to be weighted to stocks in that. And I find that that’s a really comforting way to think about your money, to be deliberate about, OK, I know that I’m in good shape for the next five to eight years because I’m not taking a lot of risk with this money.

And I have five to eight years for the market to recover. And nobody knows where we’ll be in five to eight years, but probably higher. There’s almost no periods where you go eight years out where the market has not made you some money, ignoring the dividends, just on price action alone.

So again, I think you want to think about no matter what your age is, when do I need the money? And do I have a portion of this? Like in my retirement account, it really doesn’t matter. Now, everything changes once you’ve retired. And I know we have a lot of folks here who are approaching or nearing retirement.

And you should be adjusting your portfolio anyway. And again, to just put my non-CFP hat on since I’m CFA, just as a planner, your core allocation should reflect your financial plan. And that’s why you work with an advisor like Kevin or Terry, many of the colleagues that you coach as the chair of the CFP board elect, that it’s really important that your asset allocation is something not that you can just withstand, but that is actually designed to take into account when you’re going to need the money.

And those decisions are much more important and much more relevant than getting in and out of the market, because the choices you make are going to have a much bigger impact than what the market does. And I’ve seen this over and over again. People who retire too soon, who spend too much money, who didn’t save enough, that’s why they’ll run out of money.

It’s not the ones who get out of the market rather than stick with their plan. Almost nobody fails because the S&P went up 8% instead of 12%. Most people fail because they make really bad choices or are wildly optimistic about what their portfolio is going to deliver, rather than having a calm, deliberate advisor who says, we’re not going to assume a 25% growth on your portfolio.

We’re not going to assume that Bitcoin is going to go to the moon. We’re going to take history, we’re going to apply it to the future, and we’re going to help make sure that you make choices that don’t blow up your future. Because again, it is not the market’s relative performance that blows people’s financial plans up, ever.

It’s almost always the bad choices that they’ve made. And again, that is the reality of why people fail and end up not having enough money in their retirement, which is the saddest thing in the world, because it’s the most controllable thing in the world. That’s right.

You know, Joe, I’m in Washington, DC this week at a CFP board meeting, and we’re really working on financial planning and what it means and what the professional designation does to help clients. And, you know, I always like to think of it as a fiduciary, a personal coach, someone who’s in your corner, like a Kevin, so that they can help keep you calm during these times. And I think that’s, you know, one of the things I read recently is Google’s number one search right now is actually seeking financial advice, far beyond anything else.

And so I think if you can find an advisor who is a fiduciary, like Kevin and his team, or like Bleakley Financial Group and their team, that’s probably the best advice right now, because you have a personal coach to help you through the emotional upswings here and now. So that’s what I would recommend for our viewers to think about. But let’s now move on to next week, because there’s a lot more news coming out next week.

We really want to watch what’s happening with tariffs and their effects. We’ll have the February retail numbers coming out. And most importantly, the Fed will release its latest interest rate decisions, which they had been signaling a freeze on rates.

But with the latest volatility, Kevin, what do you think is going to happen? What’s your crystal ball? The Fed’s not going to cut rates. The Fed’s going to stay put on rates. It will be interesting, though.

We’ll take a look at the dot plot. We’ll get a feel for what the, which is a graphical depiction of what all of the members of the committee think about the future purchase rates. So it’s good to, that’s something to kind of keep tabs on and to see if there’s anything that comes out of the minutes or the press conference.

But in reality, next week’s meeting is kind of a non-event probably in the grand scheme of things, because no one knows. Getting back to the uncertainty and visibility, we just need to know what’s going to happen with coming out of Washington for policy. And then once we kind of get a feel for that, then you’ll probably see things probably come down a little bit.

And by the way, then whatever does get instituted will find its way through the economic numbers. We can see what we’re really dealing with, because I haven’t met anybody, and I know that nobody exists that can actually model what’s going to happen with tariffs going forward, because the economy is way too complicated and policy is way too frenetic to even come close to modeling it. So none of these economic numbers really matter all that much, because none of the impact of the tariffs baked in.

But it’ll be interesting, just to hear what the Fed has to say. But really, I think next week’s probably a non-event. Most of the news is probably going to come out of the Oval Office.

Well, don’t forget, next week is St. Patrick’s Day. So Joe, should we be looking for four-leaf clovers next week, or what are your thoughts? I think next week, if I had to make a guess, we’re going to have an oh-shoot day. I’m using the polite version of what’s used at Wall Street, which is a day where you go, oh my gosh, and there’s a washout.

If that happens, we might be in a place where we do for, again, I’m not saying it needs to last, but at least a short-term reprieve that lasts a few weeks. I doubt we’re headed for straight down and go straight up, because this is all messy stuff with no easy answer. And the administration is telling us it’s going to be messy for a while.

So I think you want to be prudent here that if you’re going to invest, do it in tranches. You’ll get plenty of opportunities, because this is not a clean thing. This is not a, oh, we can fix this like that, and it’s done.

We don’t know where things are headed. So you want to be prudent. You want to have a portfolio that can withstand.

You want to have very careful stock selection, like Kevin suggested. And you want to take your time, so no abrupt moves. Even if you’re going to lighten up, there are going to be opportunities here on recovery days to lighten up.

Again, don’t be emotional. The number one thing I’d suggest next week, because there’ll probably be some pretty exciting days, is don’t get sucked into the binary emotions of should I get in or should I get out, because this is not a time to do that. Emotions are the worst brain you could have when it comes to making investment choices.

So I would just say it’s probably going to be an exciting week. It might be good. It might be bad.

But most importantly, try to stay calm, have a green beer, if that’s your thing, and enjoy St. Patrick’s Day. And know that we’re going to get out the other side, whatever that looks like. So it was really great to be back on the show, Terri.

It’s amazing how good you look for a 30-year-old. Yeah, I wasn’t born in 1989. Kevin, it was great to have you on Brilliant Insights, by the way.

So great to share that. Yeah, Kevin, thank you so much. Joe, this is always outstanding to have both of your perspectives.

But I want to thank the viewers for watching. We really want to know what you think of RiseUp. What questions do you have? What concerns do you have? How can we help you grow and protect your portfolio? Please comment.

And most of all, please subscribe so we’re with you every single week to help calm the waters here. I will also just let you know if you’re interested, we do portfolio reviews, free portfolio reviews. Go on to Wealthion.com backslash free, and you can get the portfolio review and then a free discussion with one of our advisors.

So thank you again for participating today. We’ll see you next week.