It’s Only Going to Get Worse (Uncut) 05-03-2025

The Economy is Contracting, It’s Only Going to Get Worse | Rise UP!

The problem is that nobody rings the bell at the bottom. Like what happens is at the bottom, it feels like you’re on your way to lower lows. I don’t know of a low where that’s not true.

You hit new lows, everyone will tell you why it’s going down another 10 to 20% and you should get out now. And you just have to do the opposite of what your feelings are telling you and what the whole world is doing. You make your most money, as Warren Buffett has said repeatedly, by doing the opposite of what the biggest crowd is doing.

Welcome to Rise Up, where we take a look at the biggest stories each week and break them down in order to help you think through how to continue to grow your portfolio and protect it. You know, there’s still a lot going on in the markets today and we know many of you as viewers are feeling uncertain and really looking for trustworthy guidance. And so that’s why we’re here at Rise Up.

It’s our mission to bring you real conversations, real perspectives on how to manage your portfolio through these turbulent and volatile times. If you need some extra help, don’t forget to go to Wealthion.com backslash free to get a portfolio review to get the help you need. My name’s Terry Kallsen.

I’m a manager and partner here at Rise Growth. I’m a certified financial planner and I’m also the co-host of this show with Joe Duran, another great CFA. He’s also our chief investment officer at Rise Growth.

Joe, welcome. Thank you, Terry. How are you? It’s great to be back.

As you know, I was in Spain last week on a YPO trip and we went and had an amazing time. Ate lots of jamon, had lots of delicious wine, tariff free. So it was great and managed to escape for a little.

And boy, what a great week to be gone. Markets were fantastic. I should go on vacation more often.

And we’re continuing here, I guess, eight days in a row now of great recoveries in the market. So yeah, I guess I should have my wife take me on vacation more frequently. It’s amazing.

We actually really like it when you go on vacation. Good things happen. But it is May 1st and it’s a start of a new- May Day, you know, in Zimbabwe, it’s like the day of the socialists, the day of the worker.

That’s right. So we’re optimistic here. We also have two great people with us today.

We have Andy Schwartz, who’s also a CFP and the CEO at Bleakley Financial Group. And then we also have David Mandelbaum, who’s a portfolio manager and a healthcare expert at Bleakley Benissar Investments. So welcome, you know, let’s get into it.

Our viewers really want to know. So we’ve got the big three happening, you know, and it’s really an important day because we’ve had negative GDP. And this has been the first time since 2022.

There’s a lot going on, turbulent month. So Joe, you know, the US economy, what are you thinking and what should our viewers- Well, look, I mean, it’s very clear. We started January, February on a huge tailwind, lots of optimism.

And then obviously all the tariff talk, and we don’t want this show to be all about tariffs today, but there’s no question. We have two competing interests here. Obviously tariffs are a tax on the US consumer.

Nobody knew that extent. Initially, there was a discussion, well, it’s going to be big, then it’s going to be small, then obviously lots of backs and forths. In the meantime, companies, as they should, decided to cut back spending.

And at the same time, we had the federal government laying off a bunch of employees toward the end of March, obviously creating more instability. You reduce government spending, you reduce GDP. And I don’t think that’s even made it through the system yet.

But what’s very clear is that companies cut back, consumers also cut back, especially toward the end of the quarter. So we really felt it in April. And also at the same time, we had the accelerant of people buying in advance so that they could buy pre-tariff increased pricing products.

So I think you have a lot of noise. I think Andy, you would agree with me, we’re not through it yet because we still don’t know what GDP is going to look like because we don’t know what the tariffs are going to look like. So what’s your sense of what’s happening there as far as the economy as a whole? Yeah, I mean, look, we were so, so negative and bearish over about five or six weeks ago.

So I think the markets got a bit oversold, but at the end of the day, we’re looking at earnings now for the first quarter that look pretty positive for the most part, although not all of them. But what’s really going to be important is next quarter’s earnings. Because as you just said, with everything that’s been happening, with all the threats of tariffs, the uncertainty of tariffs, everything is slowed down.

And so it would be our expectation that second quarter earnings, the third quarter earnings will not be as expected. They will be lower than projected in the beginning of the year, which would mean a 20 times multiple on the S&P, which means that our expectation is is that we’re at the high end of this trading range. And we probably will see some lower levels, and certainly in the S&P.

Let’s just, before we get to the markets, can we just talk about, can we talk a little bit about the economy? Are you seeing in your clients a little bit more hesitation on spending on big items? Like you talk, you’ve got thousands of clients. So how are they, what do you see as a consumer? The biggest problem with the whole tariff situation is, particularly with China, is it’s so many small businesses in this country rely on those goods. And so we’re already talking to clients and own businesses that are sourcing goods.

They’re actually already starting to either lay people off or get very, very nervous. And when they’re very nervous, they’re not spending money. So there’s no doubt that the people are getting nervous.

So when, before we get to the markets then, as someone who’s working with business owners and executives, you’re seeing across the spectrum, preserve first, be ready for a slowdown, and that’s creating a slowdown. That’s almost a slowdown and anticipation of a slowdown, which of course, exasperates things. It’s a self-fulfilling prophecy.

Yeah, there’s no doubt. I mean, people are concerned about it. Yeah.

Well, I think one of the things that you mentioned, Joe, is just this rapid increase in trying to bring in imports, right? As quickly as possible to qualify for non-tariff pricing. And so we’re starting to see, even here in California, where we have our ports, just a slowdown overall in our ports overall. So I think we’re gonna start to see this slowdown moving forward.

But I wanna point out for our viewers that we are not in a recession yet. So although it’s two quarters of negative GDP growth, we’re not there yet. And so thinking about that in terms of the markets.

But let’s go on to number two, which is really around the tech companies. They seem to be a little bit more resilient than we thought. We’re looking at the Mag 7 all year and Meta.

All of those tend to be up right now, Microsoft, NVIDIA. They bounced back this week after earnings. So that we’re starting to see that AI is less affected by tariffs.

But is this proof that the Mag 7 may be resilient against from this volatility? I would just add, look, the Mag 7 are made up of different companies. They are not the same thing. And so what you’re seeing is, look, we’re still down 8% on the NASDAQ, which is most of the Mag 7. And it’s like Tesla’s still down well into double digits, 25, 30% for the year.

And firms like Meta, Amazon, they’re down not as much. Microsoft has actually had a huge update today, as you know, on great earnings. And so the AI, while we’ve had a huge discount in pricing, but we were at really ridiculous valuations, that’s clearly firms are still, Meta today announced that they’re gonna be continuing to expand spending on AI.

So it’s not going away. I do think clearly we’re still at expensive levels and we’ve had a very nice recovery. We recovered about half of the decline that we’ve had, but I don’t believe we’re through yet.

I don’t know what your thoughts are. Team, Terry, Andy, what are your thoughts on that? Yeah, I mean, look, we’ve been in a trading range for the last, you know, eight weeks. We, the market recovered nicely, but again, our best guess is, is that we will see lower levels before the year’s over.

The first quarter isn’t indicative of what is happening. You know, every, the fear of tariffs, both from the consumer side, from the business side, spending side, and also with the government. The government has made some changes and they’ve definitely started to reduce spending, but it hasn’t really, not that much has happened yet.

There hasn’t been that many people laid off, but the fear of that, and anecdotally, we hear it every day. I was talking to a client yesterday whose daughter works at the Kennedy Center. She’s in New York.

She hasn’t lost her job yet, but her boss has lost her job. And so, you know, they’re very concerned. I mean, that kid’s not spending any money.

And so our best guess is, we will see lower levels before we’re done. I think it’s fair to assume that 10% tariff is here to stay. I think that is sort of everyone’s baseline.

And I think that’s been priced in. What we don’t yet know is the implications of that. China’s still a great unknown.

They both seem to say that the tariffs are unsustainable and it’s basically blocking all trade. We don’t know how long it’s gonna last. We don’t know where we settle out.

And until that’s known, we don’t know how much optimism should be priced in. But what we do know is the market is still very, very expensive. And if we have GDP decline for the second quarter and earnings come down in general, then the markets will be even more expensive.

Now, the good news is that great recoveries in stock market prices typically start with high PEs because you typically have a trough in earnings, but we’re not there yet. So I think it’s too soon to act. But again, as we said to everyone, you shouldn’t be selling into this.

You should be rebalancing. And if you did rebalance because the market fell down so much, you have a little bit more equity that’s participated in this recovery. That’s right.

So hopefully our viewers have listened in the past, staying calm, but really understanding the data. And just Joe and Andy, just for facts, consumer expenditures were actually only up 1.8% in the first quarter of 25 compared to about 4.4% in the fourth quarter of 2024. So we are seeing more than half of consumer spending going down.

So I anticipate that will continue into the second quarter. But let’s talk about our third option, which is our pharma industry. And this is our next big three.

Is the pharma industry worried about tariffs? We’re really trying to figure out. There was a recent study commissioned by the U.S. pharma lobby said that a 25% tariff would add 51 billion a year to U.S. drug costs and increase drug prices by an average of 13%. The goal of the tariffs would be to encourage pharma companies to expand output in the United States.

So David, we’re seeing these companies trying to get in front of that by expanding U.S. investments like Johnson & Johnson, Merck, and Eli Lilly. What are the opportunities or pitfalls that you might see for our viewers? Yeah, we’ve seen a series of announcements of investments in the U.S. as you noted. I would caution that this is not unique to pharma, but broadly that many of these companies are announcing investments that have already been part of their plans.

They’re just now amplifying them to curry favor, but certainly incremental investment in the U.S. is good. But these are enormously complex supply chains that have been developed over many years to create efficiencies. And these efficiencies translate into both lower costs as well as innovation.

So the concern is that these tariffs would have a deleterious effect on both healthcare prices and forestall innovation, which has been just enormous engine of both improved health but economic growth in the U.S. And innovation, medical innovation, addressing large unmet needs has an enormous societal ROI. So we need to be awfully careful and the companies that have reported to date, which are most of the large pharmas are trying to curry favor with the decision makers in the White House. So we’ll see how that plays out.

I suspect we’ll get some news in the near term and we’ll have a lot more clarity then. Yeah, those pharma companies that are really focused on supply chain, I think will be winners. David, also, how do you think about AI in the pharma chain? I mean, how are they leveraging this and will we see results in that area? Yeah, I mean, the FDA just issued a rule where over time they’re gonna eliminate animal testing and drug development in favor of in silico model-based AI-based development.

So that’s a good thing ethically, but also companies are definitely at the forefront of this. Some are disadvantaged that are levered to those prior soon to be antiquated models, but the companies are highly focused on this. It’s part of the reason why we’re seeing so much AI spend.

But again, one would hope that policy does not deter innovation that’s really been at a very high level in healthcare. David, just one thing, David, I’m concerned about R&D. I’m much more concerned about replacing the drugs that we’ve got to have and on-shoring.

I believe a huge, like vast majority of our drugs come from China, is that right? Yeah, well, some 30% come from India. The API, that’s the raw materials, ingredients that go into the farm, but China is a major player and in that the development chain. So the tariffs would certainly increase pricing.

Generic drugs are 90% of prescriptions in the US. If ingredients prices go up, costs of generic drugs are gonna go up. And there are certain companies that are positive, that will benefit from that.

Terry, you noted companies in the supply chain, drug distributors would benefit from that. But broadly speaking, healthcare costs would go up. Drug pricing would go up.

The supply chain has magnification effects, right? Like if the raw ingredients go up, everyone along the chain is gonna increase because they’re all on a percentage profit margin. So you just keep adding another 30%, another 20%, another 10% all along the food chain and it’s not like we can in-source and manufacture all of this all of a sudden in-house. These are very sophisticated factories, manufacturing plants that make this product.

It’s kind of like moving chips. It can’t just be done overnight because you need the specialty, you need the resources, you need the facilities, you need the people who actually know how to do this stuff and you need the permits and the government to support that. And it’s not something that can be done inside of years probably, right? Yeah, 100%, which is, again, one would hope they tread carefully.

These are great American companies and trying to address major issues, parts of the solution. Clearly there are inefficiencies in our system and problem childs, but these companies are innovating, trying to, we need lower costs, not higher costs. So tariffs would not be helpful unless they’re very appropriately designed.

And so when you’re in this environment, when you’re thinking about investing in healthcare, how should you be thinking about it? I noticed UnitedHealth obviously has been through an incredibly tough stretch here. Where in the medical chain do you go? I know you’re an investor in this space specifically, so how do you think about, it’s an area to avoid completely, it’s an area of opportunity. How do you think about it? Yeah, no, there’s- And how are valuations by the way, compared to like other companies, other sectors? Sure, healthcare generally is trading at in the 10th percentile over a 30-year basis relative to the S&P.

So healthcare is cheap. And the weighting in the S&P is about 10%, 11%, which is a historic low. But to your- Just to highlight, that’s actually a pretty good time to invest, right? Like when a sector that used to be pretty large becomes small and valuations are low.

I saw it happen with oil for a while and it became a pretty good and interesting area to invest in. Yeah, absolutely. Provided fundamentals support that.

So that’s why one needs to invest selectively. And to your first question, there are areas within healthcare that are insulated. One must keep in mind that healthcare is vast, highly diverse.

So medical technology space, companies like Boston Scientific and Intuitive Surgical and Stryker, Abbott, these are great companies producing very compelling organic growth, innovating like crazy, and not really that exposed to tariffs. They sort of ring fence their exposure. Companies in the healthcare services space outside UnitedHealth, Health Group, we could talk about the issues there, which are pretty fascinating, but that are domestically focused, levered to very powerful demographics, producing very strong earnings, strong management teams deploying capital the right way with attractive valuation.

So there’s definitely opportunities then even in pharma. There’s innovative companies where valuations now reflect kind of worst case scenarios in our view, that also are attractive investment opportunities. Now let’s move on really to what our viewers wanna hear.

And this is all their questions that they’ve had for us, not just today, but over the last few weeks, based on all the volatility. So our very first question comes from Terrence in Big Sur, California. He wants to know who have been the big winners and losers during the volatile month of April.

And I’ll just say, even though the S&P is still down 8% overall at the end of April, there were some bright spots in the month. And obviously technology stocks have really taken off. Microsoft, Meta, we talked about.

Equifax is another one that has been a bright star in this month, dividend stocks. And then a lot of our viewers, gold is up 5% for the month of April. So there are some things that continue to grow despite the volatility, and we’ll keep you informed on that.

But when we look at losers, we’re looking at energy stocks, consumer discretionary. Nike was down 16%. Nike and Starbucks were both struggling on consumer discretionary.

And that’s really getting to what Andy was saying around consumers are starting to pull back now. There’s some fear out there and that could cause a continued contraction overall. Anything you wanna add to that, Joe? No, I think, look, I think when we look at any one month, you can’t make investment decisions on what happens in any given time.

And when you’re looking at investing money, you have to think in longer time runs. We’re not a show that’s about trading. You can watch CNBC to do that.

We’re really about investing and thinking about financial planning. And I always think when you think about money, we talk about the money that is life altering wealth. And what I mean by life altering wealth is that if it grows meaningfully, it changes your life.

And if it drops meaningfully, it changes your life. When you’re talking about life altering wealth, no day or month should matter. As you know, as a financial planner, you know more than I do, Terry and Andy, it’s really about putting together a plan that takes into account sometimes healthcare is gonna be undervalued.

Sometimes it’s gonna come down and it’s gonna face fundamental changes. So thinking about your overall allocation, thinking about am I protected if any one asset class, we had a crisis in AI, mostly driven from really ridiculous valuations. And now as of a month ago, we were so oversold, we would do for a bounce.

Because even if we go back to lower, it never comes straight down, just like it never goes straight up. The market loves to climb a wall of worry, but it also never has a straight drop down. You hit bumps.

And it’s important that nobody gets overly excited in either direction. And that you work with a great advisor who gives you perspective on your life altering wealth that you don’t do anything to fundamentally shock the system for yourself. Because you can’t control the markets, you can’t control interest rates or inflation or tariffs.

What you can do is assess what’s the right way to react in any given moment. And today, what I’d say is we’ve gotten the bounce back. That’s great.

We should all feel good. Let’s hope it continues. I would not be surprised as the news starts to really stick, the tariffs really bite, the economy starts to really start sharing bad results, that we get another test down, hopefully not to new lows, because we priced in a 20% decline already.

We’ve priced in a recession, which is typically 22% decline, which we had at our peak. But it’s seldom, especially in the beginning of a recession, oh, we’re done, it goes straight up. Unless it’s a shock to the system.

If the president turned around and said, hey, we’ve changed our mind on tariffs, it’s just gonna be 10%. We’re still expensive, but things might be okay. If, however, the China thing goes on for months, then the economy is gonna have a really tough time recovering, and some sectors more than others.

So you wanna be really careful that you’re diversified, so you’re not overly in danger in any one area. Andy, I’d love to get your thoughts on this. So I know you get this call all the time, every day.

Absolutely. Yeah, so I mean, look, the main thing is know where your liquidity’s come from. So the allocation has to match the plan.

And what I mean by that is I talked to three or four clients today who are taking money from their portfolios to retire. So we know where the next three to four years of that income is coming from, whether it’s dividends, whether it’s short-term fixed income. As long as you have that, then that means you’re never selling at the wrong time on the equity side.

We’re not sellers, even though we think this market probably has really come down because you never know. Diversification, Joe just mentioned. For the first time, maybe in 10 years, diversification has actually been our friend.

At Bleakley, our portfolios were all positive because non-US equities were positive. Terry, one of the things that did really well in April was non-US value. I would say a non-US value international value fund dropped 11, 12%.

Even ironically, China Tech has had to bounce back. It’s not at its highest for the year, but up over 10%. And so diversification has really been, I think, the friend to clients.

The things that have so underperformed the S&P over the last 10 years, which means it’s underperformed the MAG-7, it looks like things are starting to rotate. And again, just make sure that your plan and your allocation match together because that’s the most important thing. Yeah, we have two other viewers who actually emailed in questions.

One is Lorraine Smith, V2. So this is her email. And Callister, 60, who say, our conversation last week about making sure you have a plan to get back into the market after you sell hit home.

Lorraine says they are sitting on cash waiting to get back in. And Callie says they sold in 2023 and they missed the bounce back. Andy, what is your advice for investors on how to make a plan or know when to get back in? I mean, I think you have to sort of work your way back.

So you know how you dollar cost averaging, you can dollar cost average your way back. But definitely set some targets to accelerate those trades. So we saw somewhere around 5,000, maybe a little bit below that was sort of the previous low.

Joe thinks we might not see anything below that. We think we could certainly get somewhere near that. The market and your success isn’t about catching tops and bottoms.

That’s not the issue. You know, it would be better to make a more efficient trade. What I would probably be doing, I would not be all in here thinking that, oh yeah, the market’s recovered, everything’s great.

A lot of times the biggest increases in the market in the short period of time are during bear markets, not bull markets. With that said though, if I’d got out, now it’s very uncomfortable because now you’re asking yourself, is this 5,600 and change going to 6,000? Or are we gonna go back to 5,300 and nobody knows? So I would be on a monthly basis kind of working my way back in to an appropriate allocation that fits your plan with the idea that if we see 5,300, I’d accelerate a couple months. If I saw 5,200, I’d accelerate a couple months.

And if I got to 5,000, sort of that previous low, I would probably get myself back to where I was. And that’s how I’d be viewing it. Working my way and nibble, nibble, nibble.

And then if we get those pullbacks, I would be accelerating those pullbacks. The problem is emotionally, when you get those pullbacks and those opportunities, that’s when you’re gonna be most afraid. So the more afraid you get, the more you should be buying.

And that’s how I would be viewing that. It’s very contradictory, of course, because if we were to go back to 5,000, if we were to drop, I thought we were gonna hit 4,800, the news will be so bleak. The whole world will tell you it’s going down to 4,000, as we know when we were at 5,000.

So the problem is that nobody rings the bell at the bottom. Like what happens is at the bottom, it feels like you’re on your way to lower lows. I don’t know of a low where that’s not true.

You hit new lows, everyone will tell you why it’s going down another 10 to 20%, and you should get out now. And you just have to do the opposite of what your feelings are telling you. And what the whole world is doing.

You make your most money, as Warren Buffett has said repeatedly, by doing the opposite of what the biggest crowd is doing. So right now, I think we’re in that very important testing zone. We’re right at the zone where this market will probably start to question where we are.

We certainly are seeing a big separation in international stocks, big separation in value stocks internationally. And certainly within our own US, certain sectors doing much better than others. So I think, again, trying to not make any bold or heroic moves in these times.

And again, I think also stepping your way in, usually on down periods rather than up periods, but don’t be chasing the up here because you might be back at 4,800, 5,000, 5,200. And that 10% is gonna feel really bad if you bought right now. Joe makes a great point because if we get to 5,300, everyone thinks we’re going lower.

That’s why you have to have the actual targets and the discipline to hit them. So if 5,300 is the target, no matter what you’re feeling, it doesn’t matter, make your purchase. And so set your targets and be faithful to your targets.

I would also say it’s the importance of having a good advisor who can keep you from doing self-harm and keep you on your plan. When you do it yourself, the emotions can take over. So having that person who is excellent in what they do with integrity, like Andy, can keep you honest and keep you to that plan.

Well, that was exactly one of the questions that came in. So you’re well ahead of yourself, David, but there’s Tony at Inverness who is feeling a little depressed because one of the things we talked about is having an advisor, having someone with a financial plan to help you think through these volatile times. And one of the questions is, that we think with Tony’s question is, do you have to have a lot of money to work with a financial planner or portfolio managers? And Andy, what are your thoughts on that? You work with clients every day on their financial plan.

I do. I guess a lot of money is a relative concept. I would say that there’s almost always an advisor for a client.

Every advisor isn’t for every client. So younger advisors that are getting started probably will work with much smaller clients as far as asset size. But yeah, I would think that there should be an advisor out there for everyone.

I would say- And I think everybody should try to get some advice. I think it really depends on what you need, Terry. If all you want is somebody to manage your portfolio and rebalance it for you, that’s a very different thing than if you need somebody to do a financial plan and do your tax preparation for you.

Those are very different things. And there are solutions for everyone, by the way. If you just want your portfolio rebalanced and taken care of, you can do it yourself for very low cost.

If you want somebody to advise you and guide you and build a personalized portfolio, you’re gonna need more money. And so it really depends what you’re looking for. If you need somebody to make investment decisions for you and get to know you, you’re gonna need more money.

And if you don’t have as much money, you shouldn’t be spending the money on fees for a manager because they’re not gonna make enough impact. So I think the point at which I’d say to people, look, you should have full-time help and an advisor. I think it’s usually around 250,000 where you’re gonna get a good advisor.

Below that, my own experience would just suggest there’s just not that many great advisors who are willing to work at that level and build specific portfolios and deliver a financial plan, which is why there’s so many robo-solutions. So there are plenty of solutions below 250 where you can get a financial plan for a subscription fee. A firm like Domain Money you can go to and they’ll give you a financial plan for like $3,000.

And that’s very good for people earning their being. And then they keep the investment simple. Like if you’re accumulating wealth and you only, not only, it’s a lot of money, but if you have $100,000, you probably should just have a portfolio of ETFs, keep the fees as low as possible.

Taxes are not as big an issue. And you really should just get a fee for planning subscription model where you spend 2,000 or 3,000 or 4,000 building a plan, telling you how much you should save and understanding how you’re gonna save for your new house or pay for your retirement, whatever it is you’re gonna be doing, big expenses, pay off your college tuition, pay the money for that so you have a plan that you can stick to, and then implement in the cheapest way possible that is tax efficient and smart. And you can do that at any of the big custodians for very, very little cost.

And then just be invested if you have a long timeframe. If you’re already retired, hopefully you have enough money to live well. And if you don’t, if you have less than 200,000 and you’re retired, you probably should be majority in cash anyway because you can’t afford the volatility.

So the question is, do you need an advisor? And the question is, it depends on how much money you have because they’re not cheap. A good advisor was gonna take roughly 1% fee annually. That’s the industry average.

And you need to get value for that. And you shouldn’t be taking any risk if you don’t have enough money to survive your retirement. You should be in cash so that you can live on that money.

And so you should only hire an advisor who’s gonna help you with investing and also help you with planning. So you get a whole suite of services that help you live a better life and actually earn their fees many times over by helping you maximize your financial life. And that’s always, let’s say, not everyone’s gonna get the same level of value.

And it does link to two things, how much complexity you have, and then how much risk are you taking by making mistakes? And obviously, the more money you have, the bigger the cost of a mistake is. So I think, again, while I’m a huge advocate that people need advice, I also wanna be pragmatic about the fact that the levels of advice are different. And if you’re an emerging, just starting to make money, I would not suggest you need a financial planner yet because the costs of being wrong are low.

You’re still saving, you’re still earning, but you should get a financial plan. You can do that relatively easily. Yeah, the other thing, Joe, you mentioned subscription fees.

There are some advisors out there that will do hourly rates as well. So that might be something you look into. I think the most important thing here is that consumers know what they’re paying, what are the fees, and then what other innovations, like subscription or hourly rates.

And then the last is really, you can negotiate fees as well. You can actually talk about what’s reasonable based on the level of services that you need. And then the last thing is understand the cost of the funds that you’re in as well.

They’re separate funds and you really wanna make sure you have low cost funds while they’re still performing in your portfolio. So we can get into more for that later in a different show if our viewers have any other questions around fees. We have another question that came in and this person’s name is Lovin’ It.

And they said- Wow, it’s not as good as McLovin from one of my favorite movies in the world, but I like Lovin’ It. So he said in one of our conversations we talked about, we have to have a steady balanced portfolio, but sometimes that can be perceived as boring or the basics are boring. And Joe, what do you have to say to that? I think Lovin’ It must be a doctor because I have never met a doctor who wants to do things in a simple way because they’re too smart to keep it simple.

And yet I’ve never met a doctor who does it themselves, who doesn’t underperform by a wild margin. Now they’ll never tell you about the mistakes that come with swinging for the fences, but I promise you as someone who’s been doing this literally managing billions and billions for 35 years now, boring is great with your life-changing wealth. Boring is great because it’s predictable and knowable.

There aren’t surprises. You know what’s happening. You know what it costs.

You know what you’re paying in taxes. And exciting is awful because exciting can be really thrilling and it can be devastatingly kneecappingly awful and cost you your marriage, honestly. So I think about it very simply.

If you want exciting, go to Vegas or take your play money and swing for the fences. And it should be no more than five to 10% of your disposable actual assets, no more. And you wanna take whatever you want without five and 10% and say, I’m gonna put it in XYZ and it’s gonna quintuple, great.

Make sure it’s not enough that it changes your life when you’re wrong. And if it turns out and it goes up 10X, kick yourself that you didn’t put 20% in, but at least you got something because there is nothing worse than people who, like a doctor, who’s brilliant and won’t simply buy the S&P 500 or Berkshire Hathaway because it’s too boring. But I just think of one of the most boring people on Wall Street is Warren Buffett.

And any of us would wish to have accumulated the track record he’s accumulated. And he’s the most boring investor that there is. Owns for years, buys when things are cheap, buys things that have a yield, that are high quality, had built up the biggest reserve of cash that he had in years at the end of last year, got criticized for it.

He said, I like cash, I know where it is. So, you know, basics are boring, but they’re also there for a reason. Everyone loves the basics because they’re boring and predictable.

And investing, you don’t want exciting. If you have an advisor who says you need exciting, you have the wrong advisor. You should not pay them.

Can I, I just wanna jump in and just echo what Joe said because someone who’s invested professionally, managed portfolios in the healthcare space for over two decades, boring is beautiful. Investing in great growth companies that compound earnings, but may not be perceived as the sexiest stories are far better in my view and have proven to be much better investments over time than binary event risk lottery tickets or theme stocks in search of a business model. So again, boring is beautiful, stick with that.

You’ll do much better and you’ll sleep much better at night. Yeah, if you have a boring portfolio, but a really fun, adventurous retirement, I think you- That’s exactly, exactly right, I love that too. Yeah, that’s right.

We’re all looking for something adventurous and fun at the right time. So- Yeah, take the profits from your boring portfolio and have an exciting time. Yeah, so I like that.

Good. Okay, well, let’s move on then because now we’re gonna talk about the next big three stories for next week. So we really wanna watch out for the week.

Joe, the Fed meeting is next week. What are you expecting will be- Nothing, that’s gonna be a boring meeting to keep with the theme. Everyone knows what he’s gonna say.

We’re not doing anything. We have to wait and see. Yes, the economy slowed down some.

If there’s any hints that he’s gonna start dropping rates, which I don’t expect, expect the market to react very positively. And in fact, what you’ve seen is bad news in the economy is actually turning out to be good news for the stock market, which is a sign that we’re near something that could be a bottom. Now, again, given that predictability of tariffs, we can’t say that’s true, but in a normal environment, when you start seeing the market go up on bad economic news, that’s usually a sign that everyone thinks the Fed’s going down.

I don’t think that’s what you’re gonna hear. So I think it’ll be uneventful. And hopefully we won’t get the president tweeting, or I guess he doesn’t tweet, he truth socials, whatever you call that, attacking Powell again.

That would not be very useful or constructive. Yeah. And then Andy, April unemployment numbers will be released.

Was this week increase a sign of trouble to come, or how should we be thinking about how the markets will react to that? We do think that the second quarter and going forward will be a different situation. So we would expect unemployment to be a little bit worse. The economy probably be a little bit worse because in anticipation of, or fear of all this tariff conversation.

And again, Joe had mentioned before, we’re really, there’s four things that have happened this year. First, we have to remember, we started the year at a really expensive market. The second thing is we had a new government come in who wanted to cut spending.

And so cutting spending, which might be a good idea, but still it’s not necessarily good for the market. It’s not good for GDP. It’s not good for the road.

The third was we had a little bit of an AI scare along the way, but that seems to be calming down a bit. And then you had the tariffs. So there’s been a lot that’s happened.

And I think that all those things are slowing things down, but we haven’t really seen that in the first quarter. So our expectation is we might start to see a little bit more of that in the second and third quarter. Right.

And then David, we have more earnings calls next week, including some pharma companies. What will you be watching for? Yeah, I mean, most of the companies in our space have reported, but there’s some still to go and clearly looking at how they talk about the tariff impact from what they know, guidance on trends. But we’ve had a lot of fireworks in the healthcare space recently.

United Health I mentioned, which has sort of eroded the thesis that they’ve had for years that has justified the premium valuation by being the best executor, the best management team that’s now been raised into question. They have some issues with some of their big growth drivers, Optum Health and others. Lilly today struck us as an enormous overreaction to a good quarter because CVS, which we also own, which had a very good quarter and did well, but announced that they were putting Novo’s drug on their preferred formulary.

It’s really just very much at the margin. Lilly’s gonna have their oral GLP-1 drug for which they just produce very good data that’s gonna massively expand the market at a much lower cost. So lots of volatility, lots of overreactions, some appropriate reactions, but never a dull moment for sure.

That’s right. And it’s only the 1st of May as we talked about. So we’re gonna wrap up this show, but remember to come back every week for more updates.

It’s our mission to bring you the very best minds in wealth management. And just to remember, go to Wealthion.com backslash free and sign up for a free portfolio review so you can get one of our trusted advisors at Bleakly like Andy and David. Remember, if you have any questions, drop them in the comments.

Please like and subscribe and we’ll look forward to seeing you next week.