What Can We Learn From Stairway To Heaven

Financial Symphony
Saturday, March 17th

Answers to istener quesns and what can the song "Stairway To Heaven" teach us about finances.

00:44:05

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

The financial center and helping you can. Harmonious financial plan and getting your portfolio in two weeks so sit back slowly strike at the the financial simple it's starts now. Thanks for joining us this week on the financial symphony with your local financial maestro Richard putra rallies. Investment advisor representative that Carolina retirement resources to serving you in the Charlotte metro area. With offices in hunter's bill and rock. Feel as well. You can reach out to Richard at any point time on our show today by calling 800. 6465996. Again that's 800. 6465996. Say Richard data this week and they're angry whopper barrier doing very well looking forward to our conversation today we have lots to get to including answering some questions from some of our local listeners will tactic the show off with that today here. In a few moments plus we're gonna see what we can learn from the market crash hall of fame. Not quite as exciting as may be visiting NASCAR hall of fame more you know head and and how to stating go into the you know football hall of fame are up to Cooperstown and then look at the baseball hall and I kind of stuff that will look back in time. At the market crash how fame and see what we can learn from events like. Black Tuesday or the dotcom crash and some of the others that we've been exposed to lately so. They'll be a little bit of our discussion on today's show but if you have any questions for Richard or. Would like do have a question featured on the show you can go to financial symphony dot com to submit those questions. The first of the week then I'd like to the tackle Richard comes to us from Charles. In Fort Mill Charles says with so much at market uncertainty recently do you think Richard that it's a good time to buy bonds. Or go to cash and a lot of people are on interest sitting gonna cashed his going to listen. The market has marsh pretty high since 2009 and and you know the movie is certainly one for the record books you so naturally. And on many on Wall Street have mixed opinions both pro and con. Whether the bull market will continue for much longer we just experienced they double digit correction for so far this year. And I believe it's only correction is this really nothing to commercials about in terms of the big drop. Simply put you know that's the dynamics of the market so it's my opinion that. You don't try to trade around normal market corrections of less than 20%. No wonder it's hard to do. Pot and two you'll have to pay taxes on your game you know this this means you must time the correction and and the rebound exactly right to make it worthwhile. And you know realistically nobody can to get on a consistent basis so. And it's highly unlikely. On that we're gonna see a 20% correctional more which is the definition of a bear market. I'm in an economy that appears to be improvement and without a recession. How were unlikely see a market pullback of more than 20% that doesn't mean it can't happen it just means that it's a rare event. And I do believe that we'll see more volatility ahead but that's what's great about employing a virtual trading strategy don't need to know what's going to happen next. You know everyone always wants big returns everybody wants returned consistently. On word forward nothing but returned returned returned because just on how the market works. Again most of you have that backwards. Bure number one priority. Certainly is to never lose money now that's not an easy task when invest in the market so realistically. You know your goal should be to limit losses and we've gotten close. With that win re use and our tactical strategies. You know by hitting singles and doubles rather than swinging for the fences. You're able to make reasonable gains when you limit losses you allow your portfolio of compound your return over the long term so. So is it time to buy bonds well you know as usual it depends. It depends on your time horizon you risk profile and your financial goal. Always depends on some of those and moving factors some of those different. If she's we've got to consider but that's not an unpopular question these days Charles with little bit of that market turbulence we've seen a lot of people sort of mass is at a good time to. Do this do that whether the bonds cash or making some other move. Lot of people falling into that same ballpark we've got other good question here for you Richard dissent comes to us from nick in Charlotte Mick says I recently had a wreaked. Proposed Timmy and if you don't know what are reits is that's a real estate investment trust and our EIT. The recently had a re proposed to me as an investment I should consider what are your thoughts on these problem. Explain what's nice about real estate investment trust that is that the read must pay out at least 90% of its taxable profit as a dividend shareholders. So most of the expected return over Reid comes not from price appreciation but from dividends in fact on average about 21. Of a reach returned comes from dividends but. You know reefs are not without risk you know for example read is sensitive to interest rates and delusional conventional wisdom says that. Higher rates are generally bad for reason and fact there's a strong inverse relationship between re prices and interest rates and so. When interest rates rise the REIT prices will fall. On the other hand reached generate high yields which act as a hedge against price declines. You know if you buy a high yield read any price decline will be mitigated by high income in the short term. And reached may look especially attractive today because one. Many of you were concerned about risk and return in today's market environment and true tax reform has been a blessing for reaching for instance. The standard corporate structure of reach means that they'll benefit from the new deductions. Like to 20% deduction on pass through entity income and REIT dividends have been excluded from the wager restriction which ordinarily caps deductions from pass through businesses so that tax changes alone. You don't make reads in 2018 more appealing but remember when you consider a financial cool. Make sure it matches your financial goals. And these investments should be limited cure growth or risk portfolio and comprehensive retirement income plan. You know under the right circumstances are re may make sense in a diversified growth portfolio but remember the reach underlying assets ultimately will determine its return you know performance or reached depends on the quality of the asset they're tied to and reach aren't rich resources of income. Obviously I like where you said there Richard about it's a tool make sure that it fits in the rest of your financial plan don't just view. And investments is in a REIT does this kind of this standalone. Decisions see how fits in with the rest of your financial picture. Always certainly good guidance against. Patty in Denver has our final question here on the mail that segment of the financial symphony. We're talking with Richard who surely do is your local financial maestro here in the Charlotte metro area. Richard Petty says my financial advisor seems to do a good job of managing my investments as far as I can tell. But we never talked about things like Social Security or life insurance or legacy plants which are all things I feel I should be getting advice on. Is this a typical experience. It's like an alien life it depends united in this case it depends on the type advisor you choose to work where. Brokers. Countenance. Insurance agents then financial planners can use the term financial advisor. A the only way you can use the term investment advisor or investment advisor representative is to have the appropriate licenses on investment advisors. Or investment advisor representatives are there for fisheries and and they're required. Not to provide recommendations that are in your best interest so. You know investment advisors. You know they're just not the same as the financial advisors. And it should not be confused as such the term financial advisor is generic term that usually referred to a broker or registered representative. In addition to provide an individually tailored investment advice you know I investment advisors also offer your financial planning services to include. You know advice concerning taxes. Our income planning and Social Security advice like insurance annuities legacy plans. They're just on limited in the due to sources and resources they have to offer a wanted to achieve your goals. Do a broker the stock broker or financial advisor and employed by brokerage firm. You know they act as a middleman between buyers and sellers on financial securities and what they do is seek to help you make money in other words. The focus with these individuals on growth. Bob when you retire you know managing your favorite shifts from primarily a growth portfolio to one that's focused on preservation and incomes so when it comes to what's best for you. A complete financial review was needed to first establish your financial goals. Once you've identified your goals that you implement strategies and financial products that satisfy each gold but different advisors have different opinions on how. Achieve those goals. They don't many of you we're getting ready to transition out of the workforce the first thing you want to do is you simply want to make sure that you have a written plan in place. In in retirement. Every retiree situations different you can't just look at a product or strategy and label it as good or bad across the board. It all depends on your specific needs. And the nuances of your situation shall have a plan is a great start but haven't won at its view your specific needs for your retirement. Is the only way to ensure your retirement years will be or do you want to beat you see it all boils down the fact that all those different pieces of your financial puzzle. Need to fit together so I'd like to offer the opportunity for you to comment. For a complete financial review and I'll offer this review. For free to all listeners who have at least two and a thousand dollars saved for retirement. I'll talk you through all the different puzzle pieces that you need to consider for instance how much risk. Are you taken your portfolio and is that amount risk appropriate for your agent for the amount of return true actually given. How much do you pay any fees or commissions would your current plan. What about the tax implications of your savings is there a way to save money in taxes down the road by planet proactively today. Do you have an income plan in place to be sure that you aren't in danger of running out of money if you end up living thirty or more years to retirement a do you have a plan to address inflation. In future decades as the cost of everything continues to rise you know obviously. There's a lot we need to discuss and we found that most people haven't planned for early enough to address these issues. Again this review is complementary to anyone who has at least 2000 or save for retirement. But the calendar does fill quickly should go ahead and give us a call right now so that we can be sure to get spot reserved for you. This is the number to dial 80646. 5996. That's 800. 6465996. That puts you directly in touch with Richard culturally and team Carolina retirement resources. Here in the Charlotte metro areas that you can have that conversation. About your financial plan and how that's going to get you to in through retirement. You're number to call is 80646. 5996. Again that's 806465996. If you still have question marks surrounding your financial plan. And you need answers Unita resolutions on some of these questions. Richard can help you walked down that path but. He got a ready to have the conversation and if you read pick up the phone and set at that time to meet for review of your plan here's the number a called make it happen. 806465996. Again that's just go free 800 number 64659. 96 the delegate your right it's at with Richard who to rally. Who has offices in hunter's bill and rocky hill as well serving here in the Charlotte area 806465996. They're at they're much more coming up on today's show take a trip down memory lane coming up some of the visits along the market crash hall of fame and what we can learn from. Those big events throughout history we're to talk about that coming up next on today's edition of the financial symphony with Richard literally. Prior to a performance it's essential that all musicians giving team. Without proper tuning the performance suffer and the sound. It won't be music to your years. Tuning in the financial world is equally important to make sure your financial plans pitch perfect by calling today. Come visit with your financial maestro Richard pitcher Allie. Serving the Charlotte metro area. Call 8064659968064688996. It's time for another musical connections through Cleveland the worlds of music can finance together yeah. Here's friend of the show and financial advisor and musician mark lawyers. With bronzed us this is the musical connection here on the financial simply rise sits here along with mark Lloyd if the financial maestro and this week we're gonna take a look at stairway to heaven and finding the financial parallels associated with that song by Led Zeppelin. A song I don't know about you mark and a lot of the student I never really get tired of hearing it. I have heard some people say that there are so sick and tired of it because been played so much on. The radio. But I don't care and never did AM yeah and remember only you there the way the song builds cancer Jimmy Hayes phenomenal. Jimmy Page and Robert Plant routed together. And just a phenomenal song was very long. Over seven minutes long and you know a lot of radio people loved it because. It would allow them to walk down the hall go to the bathroom or whatever. I dig a little break a classic stairway to heaven is arguably the most famous rock and roll soluble time some people would put it number one on their list. But it was never released as a single with the general public. Radio stations receive promotional copies. Though I I can tell you about that because they have these little hole punched in the label their promotional copies which quickly became collectors' items. But you know the general public that they wanted that song they had to buy the album which I had the album yeah which had a lot of good songs always been an Idaho got a lot of good Sonia it was known is known primarily are generally has Led Zeppelin four although technically it didn't really have been album tight. But let's talk about stairway to heaven and what in the whole world can we learn from that when you consider our finances. Well what you just said was there was no way to get the single right now support collector's items when you know through promotional signals right. So the only way that consumers could hear stairway to heaven without buying in the entire album was by radio stations ship that played it nearly became the conduit between the artist than the average citizen yo me glistening out here and thank goodness for that we have enough financial and investment world there are a lot of things that you can do by yourself. But then there are other investments or strategy where you really need to have help. He need to have an advisor serving as backed conduit. Between you and the investment. You know so give me an example there are different models the portfolios that we put together in this is what I tell folks. We were able to get models that are being used right now that big companies like apple big companies like FaceBook. Big companies like Google and an Amazon that are using these money managers to manage their corporate money their portfolios. Their corporate money well were able to take those types of investments the big companies are using with their money and take it from Wall Street. Down to main street. So now won the week he'd use those similar strategies. Are exactly the same but similar strategies for our clients. Give our clients the peace of mind knowing that you were not his gambling and speculating when the money at all. We're using. Good. Common sense diversification. And different styles of eggs in our basket so we can maximize. The return. And manage the risk efficiently and that's the key and some of those types of portfolio like that you can only get through someone like us. Or it may be income producing products. There are products and things out here investment strategies that you could only get through someone who's licensed in our space where you can only get licensed products and those little type of of income streams that are our here for a lifetime incomes you know where you can have a guaranteed income for the rest of your life that we don't have to worry about whether numbered are run out of money there's different programs and products out here today folks that you can't be a do what you're suffering get. Now that means that we'd love working would do it yourself first we know that if you're doing yourself or you've called the right show because we'll show you some of these other models that you could enhance what you're doing or supplement what you're doing that you could have a better diversified overall picture but in order for you to learn about them you've got to pick up the phone and give us the calls Iran tell what they need to do. Dispute at the following call 806465996. That's 806465996. You can get a complimentary review of your financial plan. Just call now to take advantage 806465996. It's time for fireside chats. As we get to know you're local financial symphony maestro. Thanks for joining us solve the financial symphony today this is the part of the show that we call and getting to know you it's where we take just a brief moment to step away from the financial world and we just like to get to know Richard could surely your local financial maestro a little bit better. I can throw off the wall questions that a mutually to its newest personality a little bit here and there and some of his past experiences and Richard I'm curious what's the lucky this thing. That's ever happened to you. There. No my IMAP in. Listen echoed the same gal for a long time okay. It's the wheels turning like OK what's the best way to set aside enough. So I'm gonna save me my wife. And when I think about how it all happened. It was probably divine intervention. Just give you short story a lot longer but I'll I'll do either the short version. I was invited to a professional basketball game tonight I really wasn't interested in intent and I did everything I could get out of it. I'm putting good friend of mine's finally convinced me to go. And I at the same time Michelle's brother in law happen to be called back to work in Indianapolis so she ended up going to the game with her sister. Mom and fortunately for me she sat right in front of me in this corporate box feet. On the try to meter but you know she was whether or sister shows you basically ignore me home night. But what happened was is that they left I was just so interest in her my buddy worked for taken master he was able to tell me who own no seats. And so that Monday morning national making phone calls my found her and I guess the rest. It's injury that's pretty cool yes lucky to be placed near but then tenacity to track her down in math in now it's set up the courtship for Macs now. There's a little bit a little bit and let me a little bit hard work to. We I would also instill some fear in her as my first date with her was when her father her brother in law her sister four nieces and nephews. I'm so I didn't get to meet with her alone not on our first dates this year I guess she thought I'm stalking her so you cross those that family barrier though very quickly so that saved some you know trepidation for later on when you have to get past that. Exactly that's pretty funny I would say my lucky just moments are. All the near death experiences I've had of like tripping and falling and Nina having accidents and somehow I'm still. You know alive and walking this earth I always seem to get myself into some sort of physical pickle by being clumsy self. Of this I am lucky that my clubs and this is mostly led to. And you know more minor injuries and funny stories in the in the you know in in the one off thing you know after they happen when we could probably have a whole show on that stuff yeah you know growing up Richard my middle name was accident waiting to happen so that is. Continue to follow me into adulthood so I was really aggressive idea I had a number of experiences like that as well yeah I mostly just fall off of stocks over the water. That's what. Level should we'll share those full stories for another time. I'd very good Richard ever miss the opportunity to score some brownie points when it comes to beginning to know you segment of our show with it was wife Michelle and their. Well done on this concern no doubt about it. I will get back to the financial talk coming up next radio on the financial symphony with Richardson trailing. Flowers grow faster when listening to music according to the national institute of agricultural biotechnology. In the same way your portfolio grows faster when listening to the financial company probably. You're listening to the financial symphony with Richard future at least this is the show that helps you better prepare for your financial future we have some fun along the way although I don't know if this next segment coming off that hunt richer as we look back it. Some of the major market crashes a cross history but. Hopefully it'll be fun learning a few things from here and applying them so that we can maybe avoid. You know repeating some of the same mistakes in the past store making sure that we are prepared in the event of another one of these types of situations. But let's go back to the granddaddy animal of the mall to start things off Richard and see what we can learn from. Black Tuesday tickets down memory lane as we walk the market crash shall faint today. Yeah this stock market crash in 1929. Was the worst decline in value in US history. It's time as the Dow dropped 25% loss thirty billion in market value on that and that's equivalent to. Com about 369. Billion today in fact. There was more than the total cost of war war one. And it destroyed confidence in Wall Street markets and led to the Great Depression you know do the crash wipe people out as they were forced to sell businesses. And cash in their life savings many had borrowed money. And brokers cold in their loans when the stock market starters fall enforcement people to find enough money to pay those margins. That's interest and in that. That's how we knows the bubble is really sure blow up as you can take a look and see how much money's been borrow and invest it into. The market and it's pretty high today. Although I don't believe that we're on the verge of the market crash I don't think anybody can really time that you wanna be prepared and do it justice thing. In a book by July 8 today here that the following year. The Dow was down 41 point two to me that was on 90% drop from its record high of 381 on September 3. On the worst bear market in terms of percentage loss in modern history and then. It took 25 years to regain its September 3 ha that's a long time to break even. You know so the US economy was devastated unemployment rose 25% while wages fell 42%. US economic growth decreased 50% of world trade plummeted. 65%. Thanks to deflation. It also wasn't pretty you know many lost everything. But that wasn't the case for everyone. Because some people had life insurance contract with cash value in fact JC Penney used to cash value in the form of a loan against his three million dollar life insurance contract. To meet payroll and pay day to day expenses of his department stores allowing the company to ultimately rebound from the Great Depression so. You know I guess the lesson learned here is that there's no such thing as a perfect investment strategy. But now is an ideal time to learn about the proven benefits France and versatility. Of alternative. Our strategy structures life insurance and annuity investment you know the nation's largest banks consistently invest ten to 30% of their reserves into life insurance and annuity product. And there's every reason for you to do things. And that's kind of striking to me we've seen recessions but we've never seen yet another true. Depression and I know the definition of a depression is a little bit more flexible than. You know a recessions definition but do you think we'll ever see a major depression like that again. I'm not so sure that this last straw didn't qualify as a depression. Well listen there is going to be a financial recess in my opinion on what that reset we'll look like it's hard to say. We all know how much debt are countries and we had we all know. That there's a significant amount of unfunded liabilities that has the United States government on the hook. We have sixty's so what 101000. Seniors retire earned every day. Turn 65 every single day. It's an issue that is we should be concerned about and be prepared for there is a potential for. A a deflationary environment again in fact that's what the feds have been trying to. Overcome. Thus since 2008. Wednesday they fight. I deflation. By creating an inflation and the goal hopefully is to not create too much inflation. On so that things can move along. Well that certainly it was the major depression in our country's history but it was also almost a hundred years ago we we won't be long from a hundred year anniversary of the Great Depression now there was got the dot com crashed and that comes obviously much later April 14 2000. Is when that crash really got under way and started. This is more resent not as severe as black Tuesday but certainly. An event that might stick in many people's minds even today. X through you know I wanted to lessons from the dotcom crash is the the how emotions very destructive. To your portfolio if you don't tame those emotions are obviously. There were many dotcom companies. You know there were a reformed successes but there were a lot there were not in most of those that were successful were highly overvalued. As a result many of these companies crashed you know leaving investors with a significant losses over that two to three year period of time in fact. The collapse of Internet stocks precipitated to 2000. Star marker crash even more so. Then the attacks on the World Trade Center in September 11 2001. In the market aloft a value of almost five trillion dollars to warrant that time. On the expectations are what the American offer were simply unrealistic you know for individual dreamers. Two major corporations Internet entrepreneur is worth and hammered with the dreams of becoming dot com millionaire dream billionaires. By and large these entrepreneurs were inspired by companies who like Amazon eBay. Of course for every company there guru could be a multimillion dollar business. Hundreds of others fail you know many investors. Unfortunately foolishly ignored the fundamental rules of investing in the stock markets such as. Analyze and PE ratios study in market trends and review and business plans instead investors and on and we're became preoccupied. With new ideas that were not yet proven to have market potential for more. They ignore word the blatant signs that the bubble was about the birth should also remember. New technology almost invariably creates a bubble. Even though it's easy to get caught up in the trends such social media blogging and e-commerce. It's important not to get caught up in the hype when making any investment instead remember those past mistakes of others. And realized the potential lose money by investing in a potential bubble exists. You know there's nothing wrong with invest and an Internet companies. But approach them the way you would. Any other potential investment with an eye on their balance sheet and profitability rather than the surrounding buzz you have to attain those emotions. And don't get too excited don't get too greedy and certainly don't become too fearful. And things work out just fine you know so market pressures have happened in the past. And they'll happen again and return your experience near your retirement date matter a lot more than most of you realize. You know retiring at the start of a bear market is incredibly dangerous so. You know you might enjoy positive average market returns over thirty years of investing but if negative returns her experience in the early stages when you need to create income from your portfolio. You're shave his -- rapidly through withdrawal leaving a much more mass stake to benefit from many market recovery. Even with the same average returns over a long period time. As you know this is one reasons why I'm very passionate about our community being well prepared for retirement. And I want to extend an opportunity few right now to help you be sure that your world prepared come off for the copper Mary financial reviewed his home the next fifteen minutes. And have at least 200000 dollars saved for retirement. Hot talk about your retirement income needs. Where that income is going to come from how he'll outpace inflation pay as little as possible taxes and make sure you don't outlive your money. Now you might say I don't really need to call in the next fifteen minutes and yes that's true you could probably take care for next week arena next month but here's the deal. I think coaching people on retirement planning for a long time and I've learned that it's really easy to procrastinate or get distracted. So if you don't start the process now there's a very good chance to you're not gonna do it at all for the first coach and that I'm gonna give you is to encourage you to take the first step right now. For almost everybody that's the hardest part from there it's really not a painful process so you're ready to finally get a plan in place go ahead and give us a call right now. And here's your number to dial you can dial it right now to take advantage of that complementary review that Richards offering. 8064659. And 96 is the number. That's 80646. 5996. Make sure that you know where you are right now when it comes to your financial situation. What you need to improve going forward and how to get to where you need to be. 806465996. Is the number to call. That's 806465996. Get on the calendar come into one of Richards offices there hunter's bill or Rock Hill. Have a conversation about your financial plan. And make sure the debt plan it's built to last as long as you did. If you're here in the Charlotte metro area pick up the phone call 806465996. Talk about York. Financial plan that's 806465996. If that complementary review when you die and win. One more time just believe I got enough time to write a downer called the number right now 80646. 5996. Still more to come all the financial certainly we've looked back at the granddaddy of them all black Tuesday the dotcom crash. We'll see what's next on the list as we walk through the market crash hall of fame here on the financial. Some opening room much like the musicians 1980 its mistakes and their instruments or analyzing the acoustics of early in the forum performance. Your financial maestro fine tuned to your financial planed to adapt to the ever changing financial world. Don't settle for an advisor who offers us sales pitch and also plans to make sure you hit all the right notes in your financial plan. Come visit with your financial maestro of Richard Richard Elliott and setting the Charlotte metro area call 806465996. 806465996. The financial symphony is reaching its crescendo. Your local financial maestro and coming up next. This is the financial symphony with Richard preacher else your local financial maestro chuck metro area the person that we enjoy talking to each and every week here on the. Program he's got offices and putters built and down across the border in Rock Hill as well so it's easy to come in say hello and the location that's convenient for you. If you'd like to set up that time to meet you can pick up the phone and call 80646. 5996. That's 800. 6465996. On today's show we've been talking about the market crash hall of fame a trip down memory lane of sorts to. Look at past market crashes what we can learn from those crashes we covered. The granddaddy of them all black Tuesday and the dot com crash back in 2000 a couple of minutes ago. And Richard really this last you know decade and a half this featured. Several of these smaller recessions that have popped up in and been major news sparks the dotcom crash was in 2000 a year later we get of course. 9/11 and in the wake of 9/11 the market certainly had a response to that terrible tragedy. Having plunged. And they plunged to the lowest levels in the last three years. The fact the Dow suffered the worst point boss has it in history. As trading resumed the first day after the attacks you know big losses in bowl win. And the aviation is so parts supplier United Technologies. You know I helped send the Dow down some 684. Points or over 7%. Combat loss to a wall severe. Doesn't make the index's top ten worst declines in percentage terms is down surfers worst loss percentage wise. On October 19 1987 when it went down 22 point 6%. I'm pissed because some people have heart attacks that day so that's kind of there was an ugly again remember that day clearly come you know losses. A curtain ESP 500 and NASDAQ Composite. Also went down a student is 60% drop off of its all time high. But you know the Dow was the one that posted the biggest loss that that day on September 11. Which which added to previous losses that that began in 2000. I'm at the end it. Eight the Dow was down 24% below what 2000 record high listen you know when these things happen in fear and ask a goes up volatility goes up. You know people are just afraid. They let that emotion of fear a take over. And panic selling typically you choose that's why when the market's drop and it drops a whole lot basher and it goes up. You know fear is fear is just one of the most powerful emotions. In the marketplace and after an on eleven the fear of loss search. And this is why it's so critical so important. That you hedge your portfolio and I'm not talking about investing in hedge fund. I'm talking about preparing your portfolio. For events like these so that you can limit lawsuits to an acceptable range. And then. Move forward hey Jude establishes. That that downside protection as your maximum possible loss is defined and its control. Any losses sustained due to have been completely out of control stopped at a predetermined level and you establish their predetermined level. Based on your worst home ports. Yeah I think that's really important to view and before I move onto the next market crash to I think the other illustration. Here and of course you alluded to that Richard. But such a juxtaposition between the dotcom crash and then September 17 of 2001. Two totally different reasons for a stock market decline one dribble driven by basically I guess a bubble the easiest way to. Describe it the other because of a news event. That drove everything in. Boy you talk about emotions playing a role in the financial world look no further than September 17 and eleventh. We're dealing with the emotion of that tragedy out in new York and across the country in the other incidents that happened that day. And then the investing an emotional told that the market down clients a those those were tough days to navigate through and it and it I know for a lot of us that still seems like just yesterday all that happened. That's very difficult to anticipate. All the uncertainties and economic environment is just. It's just something you have to hit do the best you can you have a portfolio but structured based on your risk tolerance. And again you want to make sure that you have predetermined level where you exit the market and preserve as much your copilot. Possible will fast for a couple years from now after some big increases in the market over a couple of years in the recovery from. The terrorist attacks in 2001. Housing prices start skyrocketing and then we get the 2008 financial crisis and this was a whole other animal. Definitely they are little different though. In that the first sign that the economy was in trouble actually occurred in 2006. That's when housing prices started to fall. There were too many homeowners with questionable credit from banks allow people to take out loans. For a 100% or more the value of those new homes you know banks engaged. In treating profitable derivatives or or mortgage backed securities that they sold to investors. Use of home loans as collateral create an insatiable demand for more and more mortgages. And the Federal Reserve you know in their opinion dated they believe that the sub prime mortgage crisis would remain confined just to the housing sector they didn't know for sure howl for the damage which spread and they didn't understand the actual causes of the subprime mortgage crisis until later on. On hedge funds other financial institutions around the world they own that. These mortgage backed securities as did many mutual funds corporate assets and pension funds. On the banks had chopped up the original mortgage Susan resold them what they call tracks. That made the derivatives impossible to price on many thought in insurance product called a credit default swap. Are protected them you know AIG financial services sold these swaps. But when the derivatives lost value AIG financial services didn't have enough cash flow on the swaps you know shall. Banks panic when they realize they would have to absorb the losses than they stopped lending to each other they didn't want other banks given them worthless mortgages as collateral. I'm no one wanted to get stuck holding the bag and as a result. Interbank borrowing cost known as like her ruse significantly. You know in my opinion on this miss trust. In the banking community was the primary cause of 2008 cross financial crisis. Now Mazen to see how that would certainly played out so we look back through history we see black Tuesday the dotcom crash September 17 of 2001 and of course the big one. That's still fresh in some people's minds the 2008 financial crisis. As we walk through the hall of fame here this some market crash hall of fame Richard we come to the final stop on the tour war. And it's a bit of an intriguing one because the lacquered says the next one it doesn't have a date next to it but it says the next one and that may be kind of the most interest and take away from this is the mall walked on the market crash all the fame. There's always going to be another what we just don't know when that's going to happen. It's true. And if you look at the note to media today that the condensed financial pundits and marketplace. Don't even I even after a decade of the worst financial crisis of this century. Everyone is still trying to predict the next one the fact is that all of creation moves in cycles from the life cycle Starr urged today Evan flow of tides of change in seasons. Human respiration and even our beating hearts. Justice cycles govern the physical universe and our physical bodies. They also govern the affairs of man such as the rise and fall of empires and nations societies economies currencies. And of course investment markets all these things. And many more are ruled by regular. Predictable financial cycles and presently if you look at those cycles there's a convergence. Of the five most powerful cycles the same kind. A convergence that triggered the Great Depression of the nineteen point nine so in my opinion. Eight financial reset is inevitable and it's only a matter of win the next bear market mature realizes so. While Bob all the menus have been around as long as euphoric investors have been around. It can be argued that it's now the central banks that appear to be making matters worse by providing too much credit. And being unable or unwilling to stop the process when things are getting out of control. Instead of economic stability. Regulated by market forces you know free market monetary intervention creates long term instability for the sake of short term stability. You know listen history shows. That's a stock market has produced long periods of high returns followed by lengthy periods of lower ones. It moves in cycles in the past 120 years we have seen five bull market and for bear market so it's only a matter of time. That we will have a fifth bear market. And trying to time the market is the investment equivalent of Ponce daily owns quest for the fountain of youth. It's request that is likely to disappoint corrections come without warning and can go back up just as fast as they fall. And your decision to get out is followed by a decision to get back in you must be right twice and that's extremely difficult even for financial professionals. So remember retirement is a gradual process that in both also plan. Ideally you begin to transition your portfolio into retirement mode years before you retire. Throughout your career you had lots of time to save money and wisely invest in a range of assets. As a retirement years. Your mix of investments needs to change moving away from back Correll accumulation mindset. Toward one of distribution and preservation he should rebalance your portfolio to make sure your risk tolerance matches your agent timeline to retirement. That usually means scaling back equity exposure. And increasing your allocation of safe money strategies. I'm very passionate about my believed the you do your secure independent retirement and that's why offer free consultation to our radio listeners to help keep you on that path if you call the next fifteen minutes to have at least 200000 more save for retirement I'll offer you this free consultation to help you determine how prepared you weren't handled retirement pitfalls like inflation. Health emergencies stock market volatility and taxation. You've worked hard for your money so we'll work just as hard to help you protecting grow it. There are a wide variety of tools and services available on the financial world. Will surely had a partial cool and services to create a plan that's tailored just for you and we'll show you how to achieve a lifetime of security. Thanks to a lifetime of income so let's get to work now so that you can get that fact based approach that you deserve. And get better interest your financial challengers and objectives. Give us a call the next fifteen minutes and I'll work together to get you on that road to financial security and independence. 806465996. That's 806465996. Richards a great resource to turn to. Ford that guidance your number call is 806465996. Again that's 806465996. Ritual put together a plan that shows you where you are right now but also where you need to move to in the future. To make treat can achieve and accomplish your financial. And retirement goals call Richard who trailing in our local financial maestro right here on the financial simply by calling 800. 6465996. Again you get that complementary review of your plan. Call 806465996. That's 806465996. Richard assault. And we have a long and district program but we'll look toward another great conversation with the next week until then have gotten through thanks for. We always appreciate it fits with your future LA and thank you so much for tuning in the show then we'll talk you next time right back here on the financial side. Information is for illustrated purposes only. And does not constitute tax investment or legal advice. Always consult with a qualified investment legal or tax professional before taking any action investment advisory services offered through Brookstone capital management LL CBC him. A registered investment advisor BCM and Carolina retirement resources are independent of each other.
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