EPISODE · Jul 20, 2022 · 24 MIN
Are We Going Into Stagflation?, Ep #90
from Payne Points of Wealth · host Ryan Payne
What's up! It's episode 90 of Payne Points of Wealth! Who once said there ain't no time for the summertime blues? Well, guess what? The stock market didn't get the memo, we're still seeing tremendous volatility in stocks right now. Earnings season is upon us and it could be the most critical earning season of the year and give us a preview into what's going to happen in the economy the rest of the year. Of course, we're going to give you our thoughts today on how you should position your portfolio right now to protect yourself but grow your money. On the Tipping Point, we're going to give you some practical tips and steps to ensure you're going to be financially independent. You will want to hear this episode if you are interested in... Businesses are showing no signs of recession but banks are prepping [1:07] Uncertainty is high. Are we going over a cliff? [4:19] How can low markets be in the best interest of your portfolio? [6:17] The Tipping Point [8:55] Are you taking the appropriate amount of risk? [10:30] Looking under the hood to find out what risk you’re really taking [13:33] Having a holistic plan [15:44] Hidden Facts of Finance [18:39] Perhaps this is in my best interest An upset client called worried about what's going on with the world and she was concerned about her portfolio. This is normal and something we hear often. She asked if we thought it would be a good time for her to go to cash? Of course, our answer is ABSOLUTELY NOT! We informed her that that would hurt her entire plan. She wanted to know why. We went on to explain that more than half of her returns come just from those interest and dividends and that she needed to remember that we're reinvesting that at low, low prices. She then says, so this actually could be a good thing for me? We couldn't congratulate that client more. She's absolutely right and there’s nothing better than the feeling you get when a client gets it! This week on the tipping point: Are you taking the appropriate risk? We have found that the biggest question we get from people who come to us whether they're referred or they come knocking on our door, is "Am I taking enough risk to achieve my goals, or am I taking more risk than necessary?" And what we've found with most investors is they take way more risk than necessary, especially when they're within three years of achieving their retirement goals. The problem is you don't realize you're taking that risk until the market goes down. How would you even know the risk you're taking if you have multiple accounts? You'd probably think you were diversified because you have different accounts. The problem is when you look under the hood and you look at all those accounts together, a lot of that money is all concentrated in the same place and you probably don't even know it. You're thinking I have lots of accounts, lots of different investments. I'm probably diversified and you're wrong. You're not diversified. You know, it really pays to know how all your money is allocated together. This week’s hidden facts of finance During the 12 US recessions since WWII the median decline in dividends paid by S&P 500 companies was just 1% in 5 of those recessions, 1949, 74, 80, 81, and 90 there was absolutely no decline. Even in the sharpest and deepest recession in modern history, S&P dividends only fell by 3%. Dividends are a great inflation hedge. During the Great Inflation from 1968 to 1983, the consumer price index surged 186% or 7.3% annually over 15 years. Exacerbated by two oil crises that also slowed the economy and increased unemployment. This painful condition was dubbed stagflation. A one-bedroom apartment in New York City has been leased for $5,000 a month. That 600 square feet. Whoever said New York city was dead was clearly wrong. The iShares MSCI USA Momentum Factor ETF has dropped 24% in 2022, worse than the S&P's 18% decline as this recording. Momentum is among the worst performing factors this year trailing only growth. Resources & People Mentioned See if you qualify for a complimentary financial review from the Paynes Connect With Ryan, Bob, and Chris http://PayneCM.com Follow on Twitter Follow on Facebook Follow on LinkedIn Subscribe on YouTube Follow on Instagram Subscribe to Payne Points of Wealth On Apple Podcasts, On Google Podcasts, On Spotify
What this episode covers
What's up! It's episode 90 of Payne Points of Wealth! Who once said there ain't no time for the summertime blues? Well, guess what? The stock market didn't get the memo, we're still seeing tremendous volatility in stocks right now. Earnings season is upon us and it could be the most critical earning season of the year and give us a preview into what's going to happen in the economy the rest of the year. Of course, we're going to give you our thoughts today on how you should position your portfolio right now to protect yourself but grow your money. On the Tipping Point, we're going to give you some practical tips and steps to ensure you're going to be financially independent. You will want to hear this episode if you are interested in... Businesses are showing no signs of recession but banks are prepping [1:07] Uncertainty is high. Are we going over a cliff? [4:19] How can low markets be in the best interest of your portfolio? [6:17] The Tipping Point [8:55] Are you taking the appropriate amount of risk? [10:30] Looking under the hood to find out what risk you’re really taking [13:33] Having a holistic plan [15:44] Hidden Facts of Finance [18:39] Perhaps this is in my best interest An upset client called worried about what's going on with the world and she was concerned about her portfolio. This is normal and something we hear often. She asked if we thought it would be a good time for her to go to cash? Of course, our answer is ABSOLUTELY NOT! We informed her that that would hurt her entire plan. She wanted to know why. We went on to explain that more than half of her returns come just from those interest and dividends and that she needed to remember that we're reinvesting that at low, low prices. She then says, so this actually could be a good thing for me? We couldn't congratulate that client more. She's absolutely right and there’s nothing better than the feeling you get when a client gets it! This week on the tipping point: Are you taking the appropriate risk? We have found that the biggest question we get from people who come to us whether they're referred or they come knocking on our door, is "Am I taking enough risk to achieve my goals, or am I taking more risk than necessary?" And what we've found with most investors is they take way more risk than necessary, especially when they're within three years of achieving their retirement goals. The problem is you don't realize you're taking that risk until the market goes down. How would you even know the risk you're taking if you have multiple accounts? You'd probably think you were diversified because you have different accounts. The problem is when you look under the hood and you look at all those accounts together, a lot of that money is all concentrated in the same place and you probably don't even know it. You're thinking I have lots of accounts, lots of different investments. I'm probably diversified and you're wrong. You're not diversified. You know, it really pays to know how all your money is allocated together. This week’s hidden facts of finance During the 12 US recessions since WWII the median decline in dividends paid by S&P 500 companies was just 1% in 5 of those recessions, 1949, 74, 80, 81, and 90 there was absolutely no decline. Even in the sharpest and deepest recession in modern history, S&P dividends only fell by 3%. Dividends are a great inflation hedge. During the Great Inflation from 1968 to 1983, the consumer price index surged 186% or 7.3% annually over 15 years. Exacerbated by two oil crises that also slowed the economy and increased unemployment. This painful condition was dubbed stagflation. A one-bedroom apartment in New York City has been leased for $5,000 a month. That 600 square feet. Whoever said New York city was dead was clearly wrong. The iShares MSCI USA Momentum Factor ETF has dropped 24% in 2022, worse than the S&P's 18% decline as this recording. Momentum is among the worst performing factors this year trailing only g
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Are We Going Into Stagflation?, Ep #90
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