1 00:00:06,040 --> 00:00:09,959 Speaker 1: Tonight. Well, amongst the blizzard of twenty twenty six, believe 2 00:00:10,000 --> 00:00:12,400 Speaker 1: it or not, the good old Federal Reserve meets this 3 00:00:12,440 --> 00:00:16,680 Speaker 1: week to make a decision on interest rates, how global 4 00:00:17,239 --> 00:00:21,599 Speaker 1: geopolitical events impact your portfolio over time, and as always 5 00:00:21,680 --> 00:00:25,280 Speaker 1: we tackle your questions. You're listening to Simply Money, presented 6 00:00:25,280 --> 00:00:28,880 Speaker 1: by all Worth Financial. I'm Bob Sponseller along with Brian James. 7 00:00:29,800 --> 00:00:33,360 Speaker 1: We do have an important Federal Reserve announcement coming up 8 00:00:33,400 --> 00:00:38,080 Speaker 1: on Wednesday, and I think they're probably gonna be on hold, 9 00:00:38,080 --> 00:00:40,280 Speaker 1: but we're gonna get the real answer from all Worst 10 00:00:40,320 --> 00:00:44,560 Speaker 1: Chief investment Officer Andy Stout, who joins us tonight. Andy, 11 00:00:44,640 --> 00:00:47,200 Speaker 1: what do you expect the Fed's gonna do, if anything, 12 00:00:47,520 --> 00:00:48,120 Speaker 1: this week. 13 00:00:48,920 --> 00:00:53,400 Speaker 2: It's highly likely that they do absolutely nothing, keep interest 14 00:00:53,479 --> 00:00:56,760 Speaker 2: rates where they are. I mean, there's the markets have 15 00:00:56,800 --> 00:00:58,920 Speaker 2: like a three percent chance of them actually doing anything, 16 00:00:58,920 --> 00:01:02,280 Speaker 2: so we'll call it. You know, basically that the Fed's 17 00:01:02,320 --> 00:01:04,720 Speaker 2: going to keep rates where they're at, which is in 18 00:01:04,760 --> 00:01:07,039 Speaker 2: a range of three point five to three point seventy 19 00:01:07,040 --> 00:01:07,520 Speaker 2: five percent. 20 00:01:07,720 --> 00:01:08,839 Speaker 3: Now, remember the FED had. 21 00:01:08,720 --> 00:01:11,560 Speaker 2: Been cutting grates for the past few meetings, so this 22 00:01:11,680 --> 00:01:14,160 Speaker 2: is like a pause for them. And the question is 23 00:01:14,200 --> 00:01:17,319 Speaker 2: really how long this is pause going to be. Are 24 00:01:17,319 --> 00:01:20,319 Speaker 2: they going to extend it even further out? We obviously 25 00:01:20,400 --> 00:01:23,280 Speaker 2: know that there's a lot of pressure from the administration 26 00:01:23,360 --> 00:01:26,039 Speaker 2: for the Federal Reserve to lower rates, but they're going 27 00:01:26,120 --> 00:01:29,040 Speaker 2: to stay focused under dual mandate. They try to remove 28 00:01:29,120 --> 00:01:32,520 Speaker 2: the political pressure out there and try and really attempt 29 00:01:32,560 --> 00:01:38,399 Speaker 2: to have a stable inflationary environment while also having full employment. 30 00:01:38,640 --> 00:01:41,280 Speaker 2: And right now, when you look at that the full 31 00:01:41,319 --> 00:01:44,080 Speaker 2: employment side of the world, you know, we see some 32 00:01:44,120 --> 00:01:46,280 Speaker 2: cracks out there, and we've talked about this just about 33 00:01:46,280 --> 00:01:49,160 Speaker 2: every week. On the inflation side of the world, Well, 34 00:01:49,560 --> 00:01:51,280 Speaker 2: the prices are still a little too high for the 35 00:01:51,320 --> 00:01:53,400 Speaker 2: Federal reserves liking, and that's why we're seeing the pause 36 00:01:53,480 --> 00:01:53,840 Speaker 2: right now. 37 00:01:55,720 --> 00:01:58,200 Speaker 4: And it feels like we're in this sort of weird, 38 00:01:59,120 --> 00:02:02,520 Speaker 4: almost kind of like lame duck period because while we're 39 00:02:02,600 --> 00:02:05,360 Speaker 4: quietly just going through the schedule and the Fed's just 40 00:02:05,400 --> 00:02:07,560 Speaker 4: going to meet and talk again, in the background, the 41 00:02:07,600 --> 00:02:10,960 Speaker 4: White House is suing him. So it's suing your own pal. 42 00:02:11,080 --> 00:02:14,400 Speaker 4: So are we are going to can we. 43 00:02:14,400 --> 00:02:15,799 Speaker 1: Rely on what he has to say? 44 00:02:16,000 --> 00:02:19,000 Speaker 4: It just feels like that half the country is assuming 45 00:02:19,040 --> 00:02:20,920 Speaker 4: he's going to be out anyway, So does it really 46 00:02:20,960 --> 00:02:23,200 Speaker 4: matter what Powell says. Are we looking forward to the 47 00:02:23,240 --> 00:02:24,920 Speaker 4: next how do we navigate this? I don't think we've 48 00:02:24,919 --> 00:02:26,080 Speaker 4: ever seen anything like this before. 49 00:02:26,919 --> 00:02:28,840 Speaker 2: Well, it's it's definitely a little bit different when you 50 00:02:28,840 --> 00:02:30,680 Speaker 2: look at it from a big picture sort of thing 51 00:02:30,720 --> 00:02:34,280 Speaker 2: and the potential I would not necessarily call it a 52 00:02:34,320 --> 00:02:37,000 Speaker 2: lawsuit against Strom Powell from the White House, but you know, 53 00:02:37,080 --> 00:02:42,720 Speaker 2: there's definitely some you know, pressure that Powell in the 54 00:02:42,720 --> 00:02:48,360 Speaker 2: Federal Reserve have not been using funds appropriately regarding the 55 00:02:48,520 --> 00:02:51,440 Speaker 2: reconstruction of the Federal Reserve building. Now that said, it 56 00:02:51,480 --> 00:02:55,280 Speaker 2: does appear that it's more than likely just an excuse 57 00:02:55,320 --> 00:02:58,799 Speaker 2: to pressure the chair to lower rates. Now to your point, 58 00:02:58,880 --> 00:03:01,400 Speaker 2: it's you know, it's very divided. Even within the Fed, 59 00:03:01,440 --> 00:03:03,639 Speaker 2: it's divided. I mean, if you look at the decision 60 00:03:03,919 --> 00:03:08,560 Speaker 2: last December to lower rates, you had two people dissent 61 00:03:08,880 --> 00:03:11,160 Speaker 2: and because they didn't want any cuts at all, and 62 00:03:11,200 --> 00:03:13,480 Speaker 2: you had a third person descent because they wanted a 63 00:03:13,520 --> 00:03:16,120 Speaker 2: half point cut, not a quarter point cut. So really, 64 00:03:16,320 --> 00:03:18,480 Speaker 2: what we're going to be looking at is to see 65 00:03:18,520 --> 00:03:21,440 Speaker 2: whether we're not Chair Pal can actually unite the Federal 66 00:03:21,480 --> 00:03:24,200 Speaker 2: Reserve behind some sort of common message. You know, I 67 00:03:24,200 --> 00:03:26,880 Speaker 2: would expect you probably have at least one disent. The 68 00:03:26,919 --> 00:03:29,160 Speaker 2: person who wanted a half point cut will probably still 69 00:03:29,760 --> 00:03:31,960 Speaker 2: dissent in favor of another cut. 70 00:03:32,160 --> 00:03:34,760 Speaker 3: Now the question is where they'll be more beyond that. 71 00:03:35,120 --> 00:03:37,400 Speaker 2: And when you look at chair Pal and you know, 72 00:03:37,560 --> 00:03:42,520 Speaker 2: to your point Brian, to see a lame duck FED chair, Yeah, 73 00:03:42,560 --> 00:03:44,880 Speaker 2: he probably is. I mean, he's not going to get renewed. 74 00:03:44,920 --> 00:03:47,640 Speaker 2: I mean President Trump is already looking for people to 75 00:03:47,760 --> 00:03:51,680 Speaker 2: replace him. Apparently he has a relatively narrow list, but 76 00:03:51,720 --> 00:03:54,960 Speaker 2: nothing is final. And for the record, Chair pals last 77 00:03:55,000 --> 00:03:57,120 Speaker 2: day is going to be on May fifteenth. What he 78 00:03:57,240 --> 00:04:01,040 Speaker 2: could do, and this is starting to get some you know, 79 00:04:01,160 --> 00:04:05,520 Speaker 2: some whispers behind the scenes is that he might take 80 00:04:05,560 --> 00:04:08,839 Speaker 2: the unusual move to actually stay on as FED chair 81 00:04:09,040 --> 00:04:11,600 Speaker 2: because he's not FED chair but a FED member, a 82 00:04:11,680 --> 00:04:14,800 Speaker 2: voting member, because his term for being on the Fed 83 00:04:14,920 --> 00:04:17,760 Speaker 2: isn't over, but his term as the chair ends on 84 00:04:17,800 --> 00:04:21,440 Speaker 2: May fifteen, so he could stay around and decide to 85 00:04:21,839 --> 00:04:25,000 Speaker 2: keep voting on monetary policy, you know, if he feels 86 00:04:25,040 --> 00:04:27,000 Speaker 2: like it's in the best entrist of the Federal Reserve. 87 00:04:27,080 --> 00:04:29,520 Speaker 2: So there's a lot of moving pieces behind the season. 88 00:04:29,560 --> 00:04:32,000 Speaker 2: It's really quite interesting and it's going to love to 89 00:04:32,000 --> 00:04:33,360 Speaker 2: see how it all plays out. 90 00:04:34,400 --> 00:04:36,440 Speaker 1: Andy, I want to follow up on that because I 91 00:04:36,800 --> 00:04:39,640 Speaker 1: feel like what's going on here behind the scenes is 92 00:04:39,760 --> 00:04:44,240 Speaker 1: actually kind of a debate, if you will, you know, 93 00:04:44,360 --> 00:04:49,360 Speaker 1: between folks of different economic theory, persuasion, so to speak, 94 00:04:49,440 --> 00:04:52,760 Speaker 1: on whether this current dual mandate by the Federal Reserve, 95 00:04:53,279 --> 00:04:56,640 Speaker 1: just the inflation and employment mandate, is the right mandate. 96 00:04:56,680 --> 00:04:58,840 Speaker 1: In other words, I think some of these people that 97 00:04:59,240 --> 00:05:01,880 Speaker 1: the President wants to bring on to the Federal Reserve 98 00:05:03,080 --> 00:05:05,200 Speaker 1: think that those are the wrong two things to be 99 00:05:05,240 --> 00:05:08,760 Speaker 1: focused on. They want to focus on other things growing 100 00:05:08,800 --> 00:05:13,159 Speaker 1: the economy, lowering that ten year treasury through economic policy. 101 00:05:13,680 --> 00:05:15,640 Speaker 1: Do you see it the same way or are we 102 00:05:15,680 --> 00:05:19,159 Speaker 1: now getting into just a philosophical debate on what the 103 00:05:19,200 --> 00:05:22,360 Speaker 1: Federal Reserve is really supposed to even be there to do. 104 00:05:23,839 --> 00:05:25,880 Speaker 2: Yeah, I don't think we're going to see any sort 105 00:05:25,880 --> 00:05:29,520 Speaker 2: of change on the Fed's dual mandate of stable prices 106 00:05:29,920 --> 00:05:33,279 Speaker 2: and full employment. I really don't see that changing. And 107 00:05:33,360 --> 00:05:36,240 Speaker 2: the concern is that from your more i'll call it 108 00:05:36,279 --> 00:05:39,240 Speaker 2: traditional members of the Federal Reserve, is that if you 109 00:05:39,360 --> 00:05:43,479 Speaker 2: lower rates too much to encourage more economic growth, inflation 110 00:05:43,640 --> 00:05:44,400 Speaker 2: will follow. 111 00:05:44,680 --> 00:05:45,839 Speaker 3: And that's why they've been. 112 00:05:45,680 --> 00:05:50,320 Speaker 2: Hesitant to decrease interest rates at a very quick base, 113 00:05:50,360 --> 00:05:54,000 Speaker 2: so still certainly not as quick as President Trump would 114 00:05:54,040 --> 00:05:56,200 Speaker 2: like it to be. So there is that push back, 115 00:05:56,240 --> 00:06:01,040 Speaker 2: and there's probably too much of that viewpoints to build 116 00:06:01,080 --> 00:06:03,719 Speaker 2: into the Fed in terms of current membership for that 117 00:06:03,800 --> 00:06:06,719 Speaker 2: to change. So, you know, while any sort of future 118 00:06:06,800 --> 00:06:10,560 Speaker 2: chair may lean that way a little bit, I don't 119 00:06:10,600 --> 00:06:12,719 Speaker 2: really see it moving the needle at all, because it's 120 00:06:12,800 --> 00:06:15,919 Speaker 2: not a you know, it's not a dictatorship where the 121 00:06:15,920 --> 00:06:18,240 Speaker 2: FED chair gets all the boat. Everybody has an equal though. 122 00:06:18,800 --> 00:06:22,080 Speaker 2: I really do believe that those members of the Federal 123 00:06:22,120 --> 00:06:25,400 Speaker 2: Reserve will continue to probably focus more on you know, 124 00:06:25,480 --> 00:06:29,640 Speaker 2: traditional policy, trying to understand where the economy is going 125 00:06:29,680 --> 00:06:31,359 Speaker 2: and what the risks are out there. 126 00:06:32,040 --> 00:06:33,719 Speaker 4: Well, and this wouldn't be a show if we didn't 127 00:06:33,760 --> 00:06:35,920 Speaker 4: bring up the tea words. Let's talk about the some 128 00:06:35,920 --> 00:06:39,120 Speaker 4: different headlines here, tariffs. So this past weekend we threatened 129 00:06:39,120 --> 00:06:40,920 Speaker 4: Canada with some new ones. Can you tell us to 130 00:06:40,960 --> 00:06:42,000 Speaker 4: give us some reaction to that? 131 00:06:43,600 --> 00:06:47,679 Speaker 2: Yeah, I was, you know, doing my my weekly writing 132 00:06:47,839 --> 00:06:51,880 Speaker 2: over the weekend like I do every week, and got 133 00:06:51,920 --> 00:06:54,120 Speaker 2: my pop up on my on my Bloomberg showing like 134 00:06:54,400 --> 00:06:57,120 Speaker 2: President Trump threatens tariffs on can I'm like, okay, well, 135 00:06:57,160 --> 00:07:00,680 Speaker 2: let's just you know, so I certainly read into that, 136 00:07:00,760 --> 00:07:03,599 Speaker 2: and when you look at it, uh, you know, it 137 00:07:03,680 --> 00:07:05,480 Speaker 2: is just a lot more the same. And I know 138 00:07:05,480 --> 00:07:08,440 Speaker 2: it's geopolitical concerns. I know we're gonna be talking about 139 00:07:08,440 --> 00:07:11,520 Speaker 2: that in the next block. And you know, there's always 140 00:07:11,560 --> 00:07:13,760 Speaker 2: going to be something to worry about, like you're there's 141 00:07:13,840 --> 00:07:16,040 Speaker 2: always things that you know, trouble the economy. 142 00:07:16,480 --> 00:07:16,720 Speaker 1: Uh. 143 00:07:16,880 --> 00:07:19,480 Speaker 2: Now, when you think about tariffs, when you think about 144 00:07:20,360 --> 00:07:24,120 Speaker 2: the geopolitical concerns that are out there, it's a lot. 145 00:07:24,240 --> 00:07:27,040 Speaker 2: I mean, you've had Greenland to really dominate the headlines 146 00:07:27,120 --> 00:07:29,640 Speaker 2: last week, but that appears to you know, kind of 147 00:07:29,800 --> 00:07:33,040 Speaker 2: almost be old news at this point to a degree, right, 148 00:07:33,080 --> 00:07:36,280 Speaker 2: And now there's concerns about Canada possibly deepening its ties 149 00:07:36,320 --> 00:07:40,120 Speaker 2: with China, and should that continue, well then you might 150 00:07:40,200 --> 00:07:43,400 Speaker 2: see some tariffs on on Canada. And you know, there's 151 00:07:43,440 --> 00:07:47,360 Speaker 2: already talks about another reworking of the US m c A, 152 00:07:47,440 --> 00:07:51,560 Speaker 2: which is the United States Mexico Canada Trade Agreement. So 153 00:07:51,920 --> 00:07:54,960 Speaker 2: we'll see the timing on that. And that's just another 154 00:07:55,080 --> 00:07:58,360 Speaker 2: political lever that the administration can use on Canada. 155 00:07:58,400 --> 00:08:01,640 Speaker 3: And now when we think about how this may impact 156 00:08:01,640 --> 00:08:02,240 Speaker 3: the markets. 157 00:08:03,000 --> 00:08:04,640 Speaker 2: You know, there's a lot out there, right and you've 158 00:08:04,640 --> 00:08:07,000 Speaker 2: probably heard about the sell America trade where people want 159 00:08:07,040 --> 00:08:10,400 Speaker 2: to have nothing to do with the US markets. Well, 160 00:08:11,560 --> 00:08:14,520 Speaker 2: the US markets are still probably the I mean not probably. 161 00:08:14,560 --> 00:08:18,200 Speaker 2: They are the deepest, most liquid markets out there. And 162 00:08:18,400 --> 00:08:24,440 Speaker 2: for all of the political concerns by one half of 163 00:08:25,440 --> 00:08:28,360 Speaker 2: or one side of the aisle, I should say, there 164 00:08:28,400 --> 00:08:31,640 Speaker 2: hasn't really been a rush for the exits by investors. 165 00:08:31,760 --> 00:08:33,280 Speaker 2: I mean last week, I don't want to get into 166 00:08:33,280 --> 00:08:36,600 Speaker 2: the weeds here, but there was a very large treasury auction, 167 00:08:36,760 --> 00:08:40,040 Speaker 2: so government bonds, and there was a lot of demand 168 00:08:40,120 --> 00:08:44,000 Speaker 2: for that. So the sell America trade isn't really manifesting 169 00:08:44,760 --> 00:08:48,560 Speaker 2: right now. At least it's really what you know, talking heads, 170 00:08:48,800 --> 00:08:52,280 Speaker 2: you know, talk about when you flip on the television station. 171 00:08:52,360 --> 00:08:54,520 Speaker 3: So I don't really worry too much about it right now. 172 00:08:54,559 --> 00:08:56,559 Speaker 4: And I got a question on that treasury auction. Was 173 00:08:56,600 --> 00:08:58,800 Speaker 4: it the same did the did the order shift? I mean, 174 00:08:58,840 --> 00:09:01,080 Speaker 4: was it the same countries stepping up to buy or 175 00:09:01,120 --> 00:09:03,000 Speaker 4: were there any difference in who was buying? I mean, 176 00:09:03,000 --> 00:09:05,679 Speaker 4: it sounds like the demand didn't change, but did the players. 177 00:09:06,360 --> 00:09:08,360 Speaker 2: And there wasn't really much of a change based on 178 00:09:08,360 --> 00:09:11,280 Speaker 2: the initial indications as far as the composition of who's 179 00:09:11,280 --> 00:09:12,440 Speaker 2: buying and who's not buying. 180 00:09:12,720 --> 00:09:14,680 Speaker 3: So it's still out there. 181 00:09:14,679 --> 00:09:17,720 Speaker 2: I wouldn't really I'm not putting much concern in that 182 00:09:17,840 --> 00:09:19,400 Speaker 2: cell of America if you trade. 183 00:09:19,440 --> 00:09:20,080 Speaker 3: That's out there. 184 00:09:20,720 --> 00:09:23,679 Speaker 1: All right, Andy, Let's switch gears to talk about earnings, because, 185 00:09:23,720 --> 00:09:26,920 Speaker 1: after all, earnings is what moves this market up or 186 00:09:26,960 --> 00:09:30,200 Speaker 1: down or sideways. We're in the middle of earning season, 187 00:09:30,800 --> 00:09:34,560 Speaker 1: and how are we expecting fourth quarter earnings overall to 188 00:09:34,640 --> 00:09:37,600 Speaker 1: shake out? I mean, according to Bloomberg, Wall Street is 189 00:09:37,679 --> 00:09:40,960 Speaker 1: expecting eight point four percent s and P five hundred 190 00:09:41,000 --> 00:09:44,360 Speaker 1: earnings growth in the fourth quarter of twenty twenty five 191 00:09:44,400 --> 00:09:47,720 Speaker 1: and seven and a half percent revenue growth. That looks 192 00:09:47,720 --> 00:09:51,280 Speaker 1: pretty healthy. But you know, even if even if we 193 00:09:51,320 --> 00:09:54,600 Speaker 1: get those numbers, and they are good numbers, the market 194 00:09:54,760 --> 00:09:57,240 Speaker 1: can at times get a little bit ahead of itself 195 00:09:57,320 --> 00:10:00,640 Speaker 1: in terms of a pe ratio in valuation. How are 196 00:10:00,640 --> 00:10:03,360 Speaker 1: we looking here as we get right in the middle 197 00:10:03,400 --> 00:10:04,840 Speaker 1: of fourth quarter earning season. 198 00:10:05,559 --> 00:10:06,559 Speaker 3: Yeah, that's a great question. 199 00:10:06,679 --> 00:10:09,160 Speaker 2: So when you look at earnings pop, what you see 200 00:10:09,320 --> 00:10:12,280 Speaker 2: is what really drives the markets. I mean, we can 201 00:10:12,280 --> 00:10:15,480 Speaker 2: talk about this geopolitical noise all day long. Yeah, and 202 00:10:15,679 --> 00:10:17,960 Speaker 2: you're going to see some short term volatility. You're going 203 00:10:17,960 --> 00:10:20,000 Speaker 2: to see some spikes, you're going to see some drops, 204 00:10:20,320 --> 00:10:22,520 Speaker 2: and when you look at a bigger picture chart of 205 00:10:22,559 --> 00:10:25,120 Speaker 2: the market, it's going to kind of even out. What's 206 00:10:25,160 --> 00:10:27,200 Speaker 2: really going to drive it is whether or not you 207 00:10:27,320 --> 00:10:30,000 Speaker 2: have earnings growing, which are relying on whether or not 208 00:10:30,040 --> 00:10:32,640 Speaker 2: the economy is growing. So I'm even taking a step 209 00:10:32,640 --> 00:10:35,360 Speaker 2: back further when you talk about valuations being elevated. 210 00:10:35,400 --> 00:10:37,480 Speaker 3: Yeah, they are elevated. There's no question about that. And 211 00:10:37,559 --> 00:10:39,199 Speaker 3: we'll talk about Q four earnings in a second. 212 00:10:39,559 --> 00:10:42,679 Speaker 2: However, and this is key. What matters more is whether 213 00:10:42,760 --> 00:10:45,760 Speaker 2: or not the economy is growing, because those future earnings 214 00:10:45,760 --> 00:10:50,000 Speaker 2: are always possible if you have a growing economy, and 215 00:10:50,120 --> 00:10:53,240 Speaker 2: that's when valuations don't matter as much. But when you 216 00:10:53,240 --> 00:10:55,680 Speaker 2: see the economy start to slow or you see a recession, 217 00:10:55,920 --> 00:10:58,280 Speaker 2: you know, take hold. Those future earnings get thrown out 218 00:10:58,320 --> 00:11:00,679 Speaker 2: the door, and that's why you see stocks come down 219 00:11:00,720 --> 00:11:03,720 Speaker 2: in price. Now as far as Q four earnings, you know, 220 00:11:03,760 --> 00:11:06,920 Speaker 2: we're really just getting started with earning season. You just 221 00:11:06,960 --> 00:11:08,840 Speaker 2: mentioned that, you know, eight and a half percent on 222 00:11:09,040 --> 00:11:12,760 Speaker 2: earnings expectations. If you look at the first three quarters 223 00:11:12,760 --> 00:11:17,080 Speaker 2: of last year, the average preseason estimate of growth was 224 00:11:17,240 --> 00:11:20,439 Speaker 2: about five point six percent. Where we ended up at 225 00:11:20,559 --> 00:11:24,520 Speaker 2: on average was about a thirteen point two percent grower three, 226 00:11:24,600 --> 00:11:29,640 Speaker 2: so almost a tripling of what expectations were. So you know, 227 00:11:29,679 --> 00:11:32,600 Speaker 2: if we apply that to Q four earnings, you can 228 00:11:32,679 --> 00:11:36,160 Speaker 2: certainly see that wouldn't be too shocking if we have 229 00:11:36,559 --> 00:11:39,280 Speaker 2: earnings growing not at eight point four percent like Wall 230 00:11:39,320 --> 00:11:43,360 Speaker 2: Street currently expects, but maybe closer to fifteen percent, uh, 231 00:11:43,600 --> 00:11:45,679 Speaker 2: give or take a little bit. So we'll see how 232 00:11:45,720 --> 00:11:48,240 Speaker 2: it plays out, because that's a pretty big spread. But 233 00:11:48,880 --> 00:11:52,000 Speaker 2: that's what we've seen on a pretty regular basis where 234 00:11:52,280 --> 00:11:56,240 Speaker 2: you see roughly eighty percent of large cap companies beat 235 00:11:56,400 --> 00:12:00,240 Speaker 2: those expectations. And then you see because of that, you 236 00:12:00,280 --> 00:12:04,160 Speaker 2: see the actual earnings numbers that hit the bottom line 237 00:12:04,400 --> 00:12:06,520 Speaker 2: come in much much better. 238 00:12:06,840 --> 00:12:09,880 Speaker 3: And that's really, you know, critical. But what's more critical, Bob, 239 00:12:10,880 --> 00:12:12,240 Speaker 3: is that forward guidance. 240 00:12:12,800 --> 00:12:16,200 Speaker 2: What are companies like Apple who reports this week, what 241 00:12:16,240 --> 00:12:18,920 Speaker 2: are they saying about future earnings? 242 00:12:19,040 --> 00:12:22,480 Speaker 3: I mean, Q four is great to know, but what 243 00:12:22,559 --> 00:12:26,559 Speaker 3: matters more is Q one this year, Q two this year? 244 00:12:26,640 --> 00:12:27,400 Speaker 3: Because remember, the. 245 00:12:27,400 --> 00:12:31,360 Speaker 2: Stock market looks forward a lot more than it looks backward. 246 00:12:31,920 --> 00:12:34,640 Speaker 1: That is a great reminder. Andy, Thank you as always 247 00:12:34,640 --> 00:12:37,679 Speaker 1: for joining us tonight. All right, coming up next, when 248 00:12:37,800 --> 00:12:42,200 Speaker 1: headlines flash war, tariffs and fear, what does the S 249 00:12:42,240 --> 00:12:45,560 Speaker 1: and P five hundred actually do? Next, we'll look at 250 00:12:45,559 --> 00:12:48,360 Speaker 1: the data, the history, and why this time may not 251 00:12:48,440 --> 00:12:51,320 Speaker 1: be different. You're listening to Simply Money presented by all 252 00:12:51,320 --> 00:13:00,360 Speaker 1: Worth Financial and fifty five KRC the talk station. You're 253 00:13:00,400 --> 00:13:03,200 Speaker 1: listening to Simply Money by all Worth Financial. I'm Bob 254 00:13:03,240 --> 00:13:08,120 Speaker 1: sponsorer along with Brian James. Well, you've saved, You've stayed disciplined. 255 00:13:08,480 --> 00:13:13,040 Speaker 1: But now what are your projections realistic? Could market assumptions 256 00:13:13,120 --> 00:13:15,920 Speaker 1: be a bit too rosy? And what if that pesky 257 00:13:16,000 --> 00:13:20,000 Speaker 1: inflation sticks around longer than expected? We'll answer all those 258 00:13:20,080 --> 00:13:25,000 Speaker 1: questions and more coming up straight ahead at six forty three. Well, 259 00:13:25,120 --> 00:13:29,520 Speaker 1: right now, the market is reacting to very real geopolitical news. 260 00:13:29,559 --> 00:13:33,600 Speaker 1: For example, shoot, just the recent discussions and tear of 261 00:13:33,679 --> 00:13:36,960 Speaker 1: threats tied to the whole Greenland situations just a week 262 00:13:37,000 --> 00:13:40,080 Speaker 1: ago triggered you know, over a two percent drop in 263 00:13:40,200 --> 00:13:42,640 Speaker 1: the S and P five hundred in a single session, 264 00:13:43,200 --> 00:13:48,360 Speaker 1: with tech stocks and major indexes tumbling Meanwhile, gold and 265 00:13:48,440 --> 00:13:52,880 Speaker 1: other haven assets like silver were rising precipitously. But let's 266 00:13:52,920 --> 00:13:57,000 Speaker 1: get into that reaction. Let's put that reaction in context. 267 00:13:57,160 --> 00:14:02,160 Speaker 1: Next with how markets tend to heavy behaved historically after 268 00:14:02,840 --> 00:14:06,280 Speaker 1: major geopolitical shocks. Brian in there, there's you know, there's 269 00:14:06,320 --> 00:14:08,680 Speaker 1: a lot of history we can look back into here, 270 00:14:09,000 --> 00:14:11,880 Speaker 1: but let's take a look back at how the market 271 00:14:11,920 --> 00:14:15,520 Speaker 1: has recovered. I wouldn't even call last week a major shock. 272 00:14:15,559 --> 00:14:18,520 Speaker 1: We've had bigger, way bigger shocks than that. But the 273 00:14:18,559 --> 00:14:20,880 Speaker 1: point is we want to talk about what happens when 274 00:14:21,240 --> 00:14:25,040 Speaker 1: people tend in the short term to react emotionally, and 275 00:14:25,080 --> 00:14:27,040 Speaker 1: then what happens in the aftermath of that. 276 00:14:27,560 --> 00:14:29,240 Speaker 4: Yeah, well, first off, let's talk about what is a 277 00:14:29,320 --> 00:14:32,320 Speaker 4: geopolitical shock. That headline gets thrown around all the time, 278 00:14:32,360 --> 00:14:33,960 Speaker 4: I think with lot a lot of definitions. So these 279 00:14:34,000 --> 00:14:37,560 Speaker 4: are These are unexpected global events that can threaten political stability, 280 00:14:37,840 --> 00:14:41,760 Speaker 4: economic order, national security, and they often create immediate uncertainty 281 00:14:41,800 --> 00:14:44,400 Speaker 4: for investors, which is why we're talking about it this morning, 282 00:14:44,440 --> 00:14:48,600 Speaker 4: of course, or this afternoon. These include things like armed conflicts, wars, 283 00:14:48,680 --> 00:14:51,760 Speaker 4: terrorist attacks, oil embargoes. So think Pearl Harbor nine to eleven. 284 00:14:51,800 --> 00:14:53,600 Speaker 4: You know, some of this is fairly obvious, but just 285 00:14:53,600 --> 00:14:57,280 Speaker 4: to kind of level set, this impacts everything from global trade, 286 00:14:57,280 --> 00:14:59,960 Speaker 4: commodity prices, investor confidence, and so forth. 287 00:15:00,880 --> 00:15:02,120 Speaker 1: History shows that the. 288 00:15:02,040 --> 00:15:05,080 Speaker 4: Initial drop has common so after we have this geopolitical shock, 289 00:15:05,160 --> 00:15:07,680 Speaker 4: the S and P five hundred will typically drop. Deutsche 290 00:15:07,720 --> 00:15:10,480 Speaker 4: Bank looked at dozens of banks of past events and 291 00:15:10,520 --> 00:15:13,080 Speaker 4: found that these markets drop about six percent on average 292 00:15:13,120 --> 00:15:15,720 Speaker 4: over the ensuing three weeks after the initial headline. And 293 00:15:15,720 --> 00:15:18,520 Speaker 4: that makes some sense. Investors panic, there's uncertainty in the 294 00:15:18,520 --> 00:15:21,560 Speaker 4: headlines dominate and everybody goes to cash. But it doesn't 295 00:15:21,600 --> 00:15:22,120 Speaker 4: stay that way. 296 00:15:22,160 --> 00:15:25,320 Speaker 1: It does above no, and I mean it does not 297 00:15:25,520 --> 00:15:28,840 Speaker 1: have to be a foreign event. I mean, let's face it, 298 00:15:28,920 --> 00:15:31,040 Speaker 1: let's talk about the elephant in the room here. Just 299 00:15:31,160 --> 00:15:35,560 Speaker 1: over the weekend, we had another individual lose his life 300 00:15:35,680 --> 00:15:39,640 Speaker 1: in a conflict with our own law enforcement people in 301 00:15:39,720 --> 00:15:43,280 Speaker 1: our own city in Minneapolis. It's very unsettling for people, 302 00:15:43,360 --> 00:15:47,200 Speaker 1: and I think what happens is people tend to link. 303 00:15:47,680 --> 00:15:50,640 Speaker 1: They assume the economy is going to be just as 304 00:15:50,720 --> 00:15:55,360 Speaker 1: unsettled as people's minds and hearts. And that's a natural 305 00:15:55,400 --> 00:15:59,120 Speaker 1: reaction to things. But that's really not how things work. 306 00:15:59,120 --> 00:16:01,600 Speaker 1: In the economy, and that's why I always try to 307 00:16:01,680 --> 00:16:03,400 Speaker 1: I know you do the same thing too. We have 308 00:16:03,480 --> 00:16:06,440 Speaker 1: to kind of, as painful as it is to go 309 00:16:06,480 --> 00:16:10,240 Speaker 1: through something like this, we do have to decouple you know, 310 00:16:10,360 --> 00:16:14,280 Speaker 1: economic activity to just how we're thinking and feeling and 311 00:16:14,320 --> 00:16:17,120 Speaker 1: maybe being unsettled about what's going on in our own 312 00:16:17,160 --> 00:16:21,560 Speaker 1: country or around the world. Uh. The bouncebacks are bigger 313 00:16:21,600 --> 00:16:23,680 Speaker 1: than what we'd expect. And that's why, you know, I 314 00:16:23,680 --> 00:16:25,920 Speaker 1: think the point of this whole segment is to just 315 00:16:26,440 --> 00:16:31,200 Speaker 1: not just react and sell, sell, sell, uh, because we're unsettled, 316 00:16:31,320 --> 00:16:35,040 Speaker 1: because that ends up costing us money and sometimes big 317 00:16:35,080 --> 00:16:39,960 Speaker 1: money over time. Some real examples of this after the 318 00:16:40,720 --> 00:16:44,440 Speaker 1: you know, the Israeli Hamas conflict, the whole October twenty 319 00:16:44,520 --> 00:16:47,200 Speaker 1: twenty three thing, I wouldn't call it a conflict. I 320 00:16:47,240 --> 00:16:49,880 Speaker 1: would call it a you know, a mass you know, 321 00:16:50,120 --> 00:16:54,480 Speaker 1: killing of Israeli citizens. The S and P climbed roughly 322 00:16:54,560 --> 00:16:58,360 Speaker 1: forty two percent from its low in the next twelve 323 00:16:58,400 --> 00:17:02,640 Speaker 1: months following that Octoberber seventh instant. That's a big rise. 324 00:17:02,840 --> 00:17:05,680 Speaker 1: You know. If people just went to cash and said, well, 325 00:17:05,720 --> 00:17:09,080 Speaker 1: I'll sit there and wait till things quote unquote get better, 326 00:17:09,720 --> 00:17:12,880 Speaker 1: go back to nineteen sixty two, the Cuban missile crisis. 327 00:17:12,920 --> 00:17:15,560 Speaker 1: I know that was a long time ago, but again, 328 00:17:16,119 --> 00:17:19,159 Speaker 1: a thirty percent gain in the following year after that. 329 00:17:19,400 --> 00:17:22,160 Speaker 1: I mean, let's face it, go back to nineteen sixty two. 330 00:17:22,320 --> 00:17:24,880 Speaker 1: I wasn't even alive back then. I know you weren't either. 331 00:17:24,960 --> 00:17:28,720 Speaker 1: But if we've got nuclear weapons pointed at our country, 332 00:17:29,560 --> 00:17:34,080 Speaker 1: I would say that's being unsettled on steroids thinking about 333 00:17:34,119 --> 00:17:37,960 Speaker 1: your own survival. But again, assuming things move on, which 334 00:17:38,000 --> 00:17:40,800 Speaker 1: they did, and we always bounce back as a country, 335 00:17:40,920 --> 00:17:44,679 Speaker 1: thirty percent gain over a year is pretty darn strong. 336 00:17:44,760 --> 00:17:47,040 Speaker 1: So you know that's the point we're trying to make here. 337 00:17:47,200 --> 00:17:49,480 Speaker 4: You can apply that to even just a bad year, right, 338 00:17:49,520 --> 00:17:51,439 Speaker 4: So I always talk about the five worst years the 339 00:17:51,480 --> 00:17:53,640 Speaker 4: market has ever had, and the interesting thing about them 340 00:17:53,920 --> 00:17:55,920 Speaker 4: is each and every one of them, I'm literally talking 341 00:17:55,960 --> 00:17:59,400 Speaker 4: about nineteen thirty seven, two thousand and eight, seventy two, 342 00:17:59,680 --> 00:18:03,080 Speaker 4: and two thousand and two and so forth, those scary years, 343 00:18:03,119 --> 00:18:04,760 Speaker 4: and each and every one of them is followed by 344 00:18:04,800 --> 00:18:07,960 Speaker 4: a major bounce back year. So that's why we always 345 00:18:08,000 --> 00:18:11,520 Speaker 4: preach don't panic. The market likes to anticipate, It likes 346 00:18:11,520 --> 00:18:14,199 Speaker 4: to anticipate negative things too, So that's why you know, 347 00:18:14,240 --> 00:18:16,080 Speaker 4: it's not like it's it's not like when these these 348 00:18:16,720 --> 00:18:20,960 Speaker 4: negative situations resolve themselves, it's not good news. It's just 349 00:18:21,480 --> 00:18:23,439 Speaker 4: it's just that we know what the outcome is going 350 00:18:23,480 --> 00:18:25,560 Speaker 4: to be. At this point. When the market is falling 351 00:18:25,600 --> 00:18:29,399 Speaker 4: apart or pulling back on these headlines, it's usually because 352 00:18:29,400 --> 00:18:31,200 Speaker 4: of the unknown, right, it's just something else. We don't 353 00:18:31,200 --> 00:18:33,640 Speaker 4: know how it's going to work out. Therefore there's no visibility. 354 00:18:33,760 --> 00:18:36,280 Speaker 4: We can't see how it's gonna affect profitability going forward. 355 00:18:36,760 --> 00:18:39,560 Speaker 4: But at the same time, eventually we will because the 356 00:18:39,600 --> 00:18:41,800 Speaker 4: situation where resolve of itself one way or another, even 357 00:18:41,840 --> 00:18:44,719 Speaker 4: if that means sometimes unfortunately it just gets overshadowed by 358 00:18:44,720 --> 00:18:47,320 Speaker 4: the next headline and the market does move on. At 359 00:18:47,320 --> 00:18:49,160 Speaker 4: the end of the day, all the market cares about 360 00:18:49,440 --> 00:18:51,200 Speaker 4: is whether we feel like we can make a profit 361 00:18:51,240 --> 00:18:54,360 Speaker 4: in the current environment, and that's a resounding yes where 362 00:18:54,400 --> 00:18:56,600 Speaker 4: we are right now. Again, that doesn't affect any of 363 00:18:56,600 --> 00:18:58,479 Speaker 4: the short term swings. Things go up and they're going 364 00:18:58,520 --> 00:19:00,600 Speaker 4: to go down and the short term as they always 365 00:19:00,640 --> 00:19:02,640 Speaker 4: have and always will. But at the end of the day, 366 00:19:02,640 --> 00:19:04,679 Speaker 4: none of this stuff is going to send. 367 00:19:04,560 --> 00:19:06,800 Speaker 1: Us over the cliff. Yeah. The other thing we have 368 00:19:06,880 --> 00:19:09,240 Speaker 1: to remember, you know, in any kind of these shocks 369 00:19:09,280 --> 00:19:11,240 Speaker 1: to the system. And I'll go back to the housing 370 00:19:11,280 --> 00:19:13,840 Speaker 1: crisis back in two thousand and eight, two thousand and nine, 371 00:19:13,920 --> 00:19:16,880 Speaker 1: that was a big one, and I think sometimes we 372 00:19:17,080 --> 00:19:21,040 Speaker 1: underestimate the role of public policy, whether it be governments 373 00:19:21,160 --> 00:19:24,640 Speaker 1: or central banks, to step in and try to stabilize 374 00:19:24,640 --> 00:19:27,359 Speaker 1: the system. Brian. They do it by, you know, let's 375 00:19:27,400 --> 00:19:30,000 Speaker 1: face it, by printing money that we don't have and 376 00:19:30,119 --> 00:19:34,040 Speaker 1: injecting it into the economy, and that eventually drives inflation, 377 00:19:34,200 --> 00:19:38,040 Speaker 1: which it has. But in the short term, injecting capital 378 00:19:38,040 --> 00:19:41,159 Speaker 1: into the system can settle markets and keep money in 379 00:19:41,720 --> 00:19:45,320 Speaker 1: people's pockets as well, so people have to remember that too. 380 00:19:45,760 --> 00:19:50,199 Speaker 1: Here's the all Worth advice. Geopolitical news drives volatility today, 381 00:19:50,200 --> 00:19:55,600 Speaker 1: but long term market history shows resilience and recovery. Stay 382 00:19:55,640 --> 00:20:00,520 Speaker 1: focused on your plan, not the headlines. All right, coming 383 00:20:00,560 --> 00:20:03,640 Speaker 1: up next. You can have the perfect estate plan on paper, 384 00:20:03,640 --> 00:20:07,399 Speaker 1: but if you ignore the emotional side of transferring wealth, 385 00:20:07,720 --> 00:20:10,800 Speaker 1: you could be setting your family up for conflict and 386 00:20:10,840 --> 00:20:14,159 Speaker 1: maybe even failure down the road. How the loss of 387 00:20:14,240 --> 00:20:18,920 Speaker 1: autonomy can sabotage even the most well crafted legacy plan. 388 00:20:19,280 --> 00:20:21,840 Speaker 1: You're listening to Simply Money, presented by all Worth Financial 389 00:20:21,880 --> 00:20:29,840 Speaker 1: on fifty five KRC the talk station. You're listening to 390 00:20:29,840 --> 00:20:32,400 Speaker 1: Simply Money he presided by all Worth Financial on Bob 391 00:20:32,480 --> 00:20:37,800 Speaker 1: Sponseller along with Brian James. Most estate planning conversations focus 392 00:20:37,960 --> 00:20:42,200 Speaker 1: on the documents and on taxes. We're talking about trust, wills, 393 00:20:42,320 --> 00:20:45,800 Speaker 1: powers of attorneys, all the legal documents. But what if 394 00:20:45,840 --> 00:20:49,240 Speaker 1: we told you the real risk to your legacy isn't 395 00:20:49,320 --> 00:20:55,000 Speaker 1: about the documents at all. Its emotion, it's psychology, it's communication, 396 00:20:55,880 --> 00:20:59,760 Speaker 1: and it's often completely overlooked unfortunately by a lot of 397 00:20:59,760 --> 00:21:03,000 Speaker 1: fans families. Tonight, we're talking about what we'll call a 398 00:21:03,160 --> 00:21:07,480 Speaker 1: loss of autonomy by airs and the loss of autonomy 399 00:21:07,680 --> 00:21:10,560 Speaker 1: risk in a state planning and how it could actually 400 00:21:10,640 --> 00:21:14,960 Speaker 1: derail the whole wealth transfer plan that you put on 401 00:21:15,080 --> 00:21:18,520 Speaker 1: paper through documents, and the wealth that you spent your 402 00:21:18,600 --> 00:21:22,800 Speaker 1: life building. Let's get into this tonight, Brian, because I 403 00:21:22,880 --> 00:21:25,800 Speaker 1: do think this is a very important topic and I'm 404 00:21:25,840 --> 00:21:30,920 Speaker 1: seeing it come up more and more in actual client meetings, right. 405 00:21:30,720 --> 00:21:34,359 Speaker 4: And this usually stems from maybe some overthinking in terms 406 00:21:34,400 --> 00:21:36,679 Speaker 4: of how much I want to, you know, kind of 407 00:21:36,680 --> 00:21:39,919 Speaker 4: make a smooth transition for my children, my heirs. And 408 00:21:39,960 --> 00:21:44,840 Speaker 4: also it can come from having written documents when maybe 409 00:21:44,880 --> 00:21:47,800 Speaker 4: your children were younger and you were a little worried 410 00:21:47,840 --> 00:21:50,240 Speaker 4: about their decision making abilities and whether they would handle 411 00:21:50,280 --> 00:21:52,920 Speaker 4: things properly. And you've left that go for fifteen years 412 00:21:52,920 --> 00:21:54,800 Speaker 4: and now they're perfectly stable people, but they're going to 413 00:21:54,880 --> 00:21:57,240 Speaker 4: have a harness on them when it comes to inheriting 414 00:21:57,240 --> 00:21:59,680 Speaker 4: assets from the pairments. So what this means this loss 415 00:21:59,680 --> 00:22:02,359 Speaker 4: of out tonomy. That's that moment when these airs feel 416 00:22:02,400 --> 00:22:04,520 Speaker 4: like the decisions have already been made for them and 417 00:22:04,560 --> 00:22:07,359 Speaker 4: not with them. This is when wealth becomes more of 418 00:22:07,400 --> 00:22:09,760 Speaker 4: a weight instead of a gift. Usually comes with, you know, 419 00:22:09,800 --> 00:22:12,840 Speaker 4: good intentions like I was describing before. But think of 420 00:22:12,840 --> 00:22:15,040 Speaker 4: this example. You might be thirty five years old and 421 00:22:15,119 --> 00:22:17,240 Speaker 4: you inherit three million dollars through a trust that was 422 00:22:17,280 --> 00:22:19,040 Speaker 4: written when you were fifteen, and it says you can 423 00:22:19,080 --> 00:22:22,280 Speaker 4: only use these funds for housing, education, medical needs. Well, 424 00:22:22,280 --> 00:22:24,040 Speaker 4: how are you gonna feel about that? Because that means 425 00:22:24,040 --> 00:22:25,760 Speaker 4: it can't necessarily it's gonna be hard to get it 426 00:22:25,800 --> 00:22:27,280 Speaker 4: to jump through hoops. You're gonna have to get the 427 00:22:27,320 --> 00:22:30,760 Speaker 4: trustees approval to do things that maybe may feel pretty 428 00:22:30,760 --> 00:22:34,280 Speaker 4: standard otherwise, And again that may have happened because your parents, 429 00:22:34,320 --> 00:22:37,040 Speaker 4: with the right intentions, wrote it to cover risks that 430 00:22:37,160 --> 00:22:39,359 Speaker 4: currently don't exist because you've outgrown them. 431 00:22:40,640 --> 00:22:42,960 Speaker 1: Well, Brian, I'm living through this right now with a 432 00:22:42,960 --> 00:22:45,040 Speaker 1: couple of clients that I'm thinking of. They are in 433 00:22:45,119 --> 00:22:48,240 Speaker 1: their mid thirties and they inherited a trust left to 434 00:22:48,280 --> 00:22:51,280 Speaker 1: them by their grandparents, and it did have all these 435 00:22:51,320 --> 00:22:55,119 Speaker 1: strings attached to it. And you know, a couple of 436 00:22:55,119 --> 00:22:58,080 Speaker 1: these guys, they're trying to get started in life and 437 00:22:58,119 --> 00:23:01,160 Speaker 1: they could use an extra two to three hundred bucks 438 00:23:01,240 --> 00:23:04,480 Speaker 1: a month. And I have to act as an intermediary 439 00:23:04,800 --> 00:23:08,679 Speaker 1: literally every month going back to the corporate trustee to 440 00:23:08,760 --> 00:23:10,880 Speaker 1: release some of these funds. And I won't get into 441 00:23:10,880 --> 00:23:14,000 Speaker 1: all the details. There were some good reasons behind having 442 00:23:14,080 --> 00:23:17,720 Speaker 1: it set up this way, but it's just it's not working. 443 00:23:17,960 --> 00:23:21,040 Speaker 1: You know, it was set up and implemented. I mean, 444 00:23:21,040 --> 00:23:23,320 Speaker 1: this trust has been going on for fifteen or twenty 445 00:23:23,400 --> 00:23:26,600 Speaker 1: years and it's not working the way it was intended today. 446 00:23:27,000 --> 00:23:29,280 Speaker 1: My bigger point here is I think it comes down 447 00:23:29,359 --> 00:23:32,040 Speaker 1: to communication. And I've heard you talk about this on 448 00:23:32,119 --> 00:23:37,640 Speaker 1: the show before. I think it's a generational difference older folks, 449 00:23:37,760 --> 00:23:41,320 Speaker 1: and I'll even put myself in that category. Talking about 450 00:23:41,560 --> 00:23:45,159 Speaker 1: money is kind of taboo. You know, for whatever reason, 451 00:23:45,560 --> 00:23:48,440 Speaker 1: the whole cultural thing has been you never talk about 452 00:23:48,480 --> 00:23:52,800 Speaker 1: money with anybody. And you know, now having grown kids 453 00:23:52,920 --> 00:23:56,960 Speaker 1: and watching people go through this, I have begun talking 454 00:23:57,040 --> 00:24:00,520 Speaker 1: about money with my own adult children and they're houses 455 00:24:00,960 --> 00:24:03,840 Speaker 1: because I want to begin a dialogue. Yes, it's still 456 00:24:03,960 --> 00:24:06,520 Speaker 1: my wife and mine's money at the end of the day, 457 00:24:06,960 --> 00:24:09,200 Speaker 1: but I want to get a flavor on how they're 458 00:24:09,280 --> 00:24:13,159 Speaker 1: thinking about money. Do they have good financial plans in place? 459 00:24:13,560 --> 00:24:16,480 Speaker 1: You know, there's an educational component to this and a 460 00:24:16,560 --> 00:24:21,000 Speaker 1: communication component to this, because if you just do nothing 461 00:24:21,119 --> 00:24:24,480 Speaker 1: and say nothing and then die in your eighties and 462 00:24:24,600 --> 00:24:27,320 Speaker 1: leave a boatload of money to people in their fifties, 463 00:24:28,040 --> 00:24:30,560 Speaker 1: there's a lot of life that goes on between twenties 464 00:24:30,600 --> 00:24:34,159 Speaker 1: and fifties that you could have helped them with but 465 00:24:34,320 --> 00:24:37,640 Speaker 1: maybe didn't because there was a lack of communication and education. 466 00:24:37,960 --> 00:24:39,000 Speaker 1: What are your thoughts on that? 467 00:24:39,359 --> 00:24:42,560 Speaker 4: Yeah, and I think that there are strategies you can 468 00:24:42,600 --> 00:24:45,080 Speaker 4: put out there to affect the things that you want 469 00:24:45,119 --> 00:24:48,679 Speaker 4: without putting the reins on somebody. So, for example, you 470 00:24:48,760 --> 00:24:51,440 Speaker 4: might create what's called an incentive trust or a principles 471 00:24:51,440 --> 00:24:53,800 Speaker 4: based trust. Now there's limits to these, but then what 472 00:24:53,840 --> 00:24:56,720 Speaker 4: this does is that this outlines values, not just restrictions. 473 00:24:56,720 --> 00:24:58,880 Speaker 4: So you know, for example, instead of saying you can 474 00:24:58,920 --> 00:25:01,280 Speaker 4: only access money if if you have a job, you 475 00:25:01,280 --> 00:25:03,680 Speaker 4: could say this trust is intended to support your growth, 476 00:25:03,760 --> 00:25:06,800 Speaker 4: your contribution to society, and your independence. And I'll share 477 00:25:06,800 --> 00:25:09,600 Speaker 4: an example from the past, from my past life where 478 00:25:09,640 --> 00:25:12,960 Speaker 4: for whatever reason, grandma and grandpa felt that certain professions 479 00:25:12,960 --> 00:25:16,280 Speaker 4: were more value than valuable than others, and so they 480 00:25:16,359 --> 00:25:19,040 Speaker 4: laid restrictions on their airs to say, if you're a teacher, 481 00:25:19,040 --> 00:25:21,000 Speaker 4: if you're a doctor or a lawyer. 482 00:25:21,000 --> 00:25:22,119 Speaker 1: Then you get x amount. 483 00:25:22,240 --> 00:25:24,280 Speaker 4: If you do something else, then it's going to go 484 00:25:24,359 --> 00:25:25,840 Speaker 4: to part of it's going to go to a charity. 485 00:25:26,000 --> 00:25:27,960 Speaker 4: And this was just a slap in the face to 486 00:25:28,000 --> 00:25:30,240 Speaker 4: these to these kids, and it really and honestly it 487 00:25:30,320 --> 00:25:33,439 Speaker 4: poisoned the memory forever of what those kids would have 488 00:25:33,480 --> 00:25:35,280 Speaker 4: of it, because what if they didn't want those So 489 00:25:35,440 --> 00:25:37,359 Speaker 4: why would they chain themselves to a career they weren't 490 00:25:37,359 --> 00:25:40,199 Speaker 4: happy with just because of trust set them up to 491 00:25:40,240 --> 00:25:40,480 Speaker 4: do that. 492 00:25:40,800 --> 00:25:42,000 Speaker 1: So sort of I guess the. 493 00:25:42,000 --> 00:25:44,879 Speaker 4: Right intent grandparents want to guide their children, their grandchildren 494 00:25:44,920 --> 00:25:46,760 Speaker 4: to the right direction. But at the same time, the 495 00:25:46,800 --> 00:25:49,360 Speaker 4: world changes and things change, and that did not give 496 00:25:49,359 --> 00:25:51,480 Speaker 4: them the freedom to do that, and it created resentment. 497 00:25:51,560 --> 00:25:53,960 Speaker 1: It was really kind of sad. Yeah, but in what 498 00:25:54,000 --> 00:25:56,080 Speaker 1: would have happened, you know, kind of the point I'm 499 00:25:56,080 --> 00:25:59,200 Speaker 1: trying to make if there had been a few family vacations, 500 00:25:59,280 --> 00:26:02,439 Speaker 1: family dinner where people just get in a room and 501 00:26:02,640 --> 00:26:06,080 Speaker 1: talk about this stuff and arrive in an agreement ahead 502 00:26:06,080 --> 00:26:08,760 Speaker 1: of time instead of just you know, putting things in 503 00:26:08,840 --> 00:26:11,800 Speaker 1: writing that that tend to be I mean they do. 504 00:26:11,840 --> 00:26:15,600 Speaker 1: They turn into irrevocable policy statements once you die and 505 00:26:15,640 --> 00:26:19,119 Speaker 1: they can't be changed. That's what I find to be unfortunate. 506 00:26:19,200 --> 00:26:21,320 Speaker 1: All right, we'll leave it there. A good estate plan 507 00:26:21,840 --> 00:26:27,720 Speaker 1: transfers assets, A great estate estate plan transfers autonomy, values, 508 00:26:27,960 --> 00:26:31,760 Speaker 1: and purpose. If your errors don't feel included in the process, 509 00:26:32,240 --> 00:26:35,679 Speaker 1: well they may never embrace the outcome, regardless of the 510 00:26:35,720 --> 00:26:39,240 Speaker 1: dollar amount involved. What should you do when the numbers 511 00:26:39,320 --> 00:26:42,960 Speaker 1: say you're fined but your gut still isn't convinced. It's 512 00:26:42,960 --> 00:26:45,679 Speaker 1: one of many questions we will answer next. You're listening 513 00:26:45,680 --> 00:26:48,439 Speaker 1: to Simply Money, presented by all Worth Financial on fifty 514 00:26:48,440 --> 00:26:56,480 Speaker 1: five KRC, the talk station you're listening to, simply Money. 515 00:26:56,480 --> 00:26:58,960 Speaker 1: You're set up by all Worth Financial. I'm Bob Sponsller 516 00:26:59,040 --> 00:27:03,480 Speaker 1: along with Brian's ice Ice Baby. I see what you're 517 00:27:03,520 --> 00:27:05,679 Speaker 1: doing there, Joe Strecker. I like it all right. Do 518 00:27:05,680 --> 00:27:08,040 Speaker 1: you have a financial question you'd like for us to answer? 519 00:27:08,520 --> 00:27:10,720 Speaker 1: There's a red button you could click while you're listening 520 00:27:10,760 --> 00:27:13,600 Speaker 1: to the show. If you're listening to the show on 521 00:27:13,640 --> 00:27:17,040 Speaker 1: the iHeart app, simply record your questions and they will 522 00:27:17,080 --> 00:27:21,160 Speaker 1: come straight to us. And speaking about listening to the podcast, 523 00:27:21,359 --> 00:27:23,840 Speaker 1: you know, rather than the radio. Shoot, Brian, when we 524 00:27:23,880 --> 00:27:27,440 Speaker 1: have a level three snow emergency and people can't drive 525 00:27:27,560 --> 00:27:30,640 Speaker 1: and listen to us on fifty five KRC, well there's 526 00:27:30,680 --> 00:27:34,040 Speaker 1: another reason to download that podcast, so you don't miss 527 00:27:34,280 --> 00:27:36,720 Speaker 1: one minute of this show, right Brian. 528 00:27:37,280 --> 00:27:39,920 Speaker 4: Yes, can't step back from the hot air and the 529 00:27:39,920 --> 00:27:43,000 Speaker 4: bloviations of Bob Sponseller and Brian James. So of course 530 00:27:43,400 --> 00:27:45,200 Speaker 4: many ways to access that. Matter of fact, some of 531 00:27:45,240 --> 00:27:48,160 Speaker 4: these questions I think we had came from the podcast. 532 00:27:48,200 --> 00:27:50,920 Speaker 4: This was a red button question. So the very first 533 00:27:50,920 --> 00:27:55,240 Speaker 4: one we've got here where we got people listening to 534 00:27:55,280 --> 00:27:57,560 Speaker 4: our podcast and are curious about wanting to know how 535 00:27:57,600 --> 00:27:58,720 Speaker 4: to deal with their situations. 536 00:27:58,720 --> 00:27:59,840 Speaker 1: This is Larry and Madeira. 537 00:28:00,359 --> 00:28:02,800 Speaker 4: Larry says he's seen Monte Carlo results, but it doesn't 538 00:28:02,800 --> 00:28:04,919 Speaker 4: really trust him, and he's wondering what these simulations are 539 00:28:04,960 --> 00:28:07,640 Speaker 4: actually testing and what do they completely miss. Well, this 540 00:28:07,720 --> 00:28:09,359 Speaker 4: is near and dear to our hearts, because I do 541 00:28:09,400 --> 00:28:13,240 Speaker 4: believe in Monte Carlo simulations for the purpose of stress testing. 542 00:28:13,320 --> 00:28:13,439 Speaker 1: Right. 543 00:28:13,480 --> 00:28:17,080 Speaker 4: So these are often presented, unfortunately as precision tools. You know, 544 00:28:17,119 --> 00:28:19,440 Speaker 4: push button A and you'll get result B. It doesn't 545 00:28:19,440 --> 00:28:22,119 Speaker 4: work that way. Better understood as a stress test. So 546 00:28:22,119 --> 00:28:24,760 Speaker 4: what it's really doing, Monte Carlo takes all your inputs, 547 00:28:24,800 --> 00:28:28,160 Speaker 4: you're expected returns, you're the what you're expecting to get 548 00:28:28,160 --> 00:28:30,320 Speaker 4: out of your financial plan in terms of spending, what 549 00:28:30,400 --> 00:28:34,480 Speaker 4: your resources are, sources of income, time, horizon, and so forth, 550 00:28:34,600 --> 00:28:38,040 Speaker 4: and then literally run thousands of randomized market outcomes around 551 00:28:38,080 --> 00:28:40,760 Speaker 4: a certain average based on how aggressive you want to be. Right, 552 00:28:40,800 --> 00:28:42,920 Speaker 4: what that means is that in year one we lose 553 00:28:42,960 --> 00:28:44,560 Speaker 4: ten percent, and then in year two we're up twenty, 554 00:28:44,680 --> 00:28:46,880 Speaker 4: then we're up fifteen, then we're down four, then we're flat. 555 00:28:47,200 --> 00:28:49,200 Speaker 4: Mix it up again and again and again, and then 556 00:28:49,240 --> 00:28:51,280 Speaker 4: you're looking at what I like to call a batting average. 557 00:28:51,280 --> 00:28:54,600 Speaker 4: That's a percentage of time or percentage of those simulations 558 00:28:54,600 --> 00:28:56,520 Speaker 4: that come out with at least a dollar in the 559 00:28:56,520 --> 00:28:57,200 Speaker 4: bank at the end. 560 00:28:57,720 --> 00:29:00,360 Speaker 1: It's useless if you only run one of them. 561 00:29:00,400 --> 00:29:03,800 Speaker 4: It's very useful if you use it to define certain 562 00:29:03,840 --> 00:29:06,720 Speaker 4: things like what if I take social Security earlier versus later, Well, 563 00:29:06,720 --> 00:29:08,960 Speaker 4: that's going to move that outcome around. Or what if 564 00:29:09,000 --> 00:29:10,480 Speaker 4: what if we want to buy the second home. What 565 00:29:10,520 --> 00:29:11,960 Speaker 4: does that do to us if we tie some of 566 00:29:11,960 --> 00:29:14,520 Speaker 4: our money up, you know in an ill equid asset, 567 00:29:14,600 --> 00:29:16,520 Speaker 4: Well that that'll This will tell you exactly what that 568 00:29:16,600 --> 00:29:19,640 Speaker 4: income could be taking into account the market. Now, those 569 00:29:19,680 --> 00:29:22,000 Speaker 4: are the good things. On the other hand, what what 570 00:29:22,160 --> 00:29:24,320 Speaker 4: where the weakness is? There's weakness in anything. If there 571 00:29:24,360 --> 00:29:26,240 Speaker 4: was a silver bullet for all this, that's what we 572 00:29:26,240 --> 00:29:28,680 Speaker 4: would use. But first of all, the downside of Monte 573 00:29:28,680 --> 00:29:30,360 Speaker 4: Carlo is it does assume the future is going to 574 00:29:30,360 --> 00:29:32,640 Speaker 4: be hay statistically like the past. It's simply looking at 575 00:29:32,680 --> 00:29:36,440 Speaker 4: past results of markets and applying those to uh to 576 00:29:36,760 --> 00:29:42,200 Speaker 4: future situations. But so there could be some regime changes, 577 00:29:42,280 --> 00:29:44,840 Speaker 4: higher taxes, lower real returns, things that haven't happened in 578 00:29:44,880 --> 00:29:46,680 Speaker 4: the past, or haven't happen for a long time. Often 579 00:29:46,720 --> 00:29:49,000 Speaker 4: can get underweighted or ignore it. So this is why 580 00:29:49,080 --> 00:29:50,640 Speaker 4: we need to make sure we don't treat it as 581 00:29:50,640 --> 00:29:52,760 Speaker 4: the only thing, the only option out there. All right, 582 00:29:52,760 --> 00:29:54,920 Speaker 4: So let's move on to Charles in Mount Lookout. So 583 00:29:55,560 --> 00:29:57,200 Speaker 4: Charles has a question for you. Bobby says, how do 584 00:29:57,240 --> 00:30:00,000 Speaker 4: you model tax changes over time and projections instead of 585 00:30:00,080 --> 00:30:02,160 Speaker 4: assuming today's rule state constant forever. 586 00:30:03,480 --> 00:30:05,920 Speaker 1: Well, Charles, if you listen to Brian's answer to the 587 00:30:06,040 --> 00:30:08,280 Speaker 1: last question, you know my answer is going to be 588 00:30:08,440 --> 00:30:11,280 Speaker 1: just a slightly different flavor of what he just talked about. 589 00:30:11,800 --> 00:30:14,640 Speaker 1: I think the purpose of financial planning is to give 590 00:30:14,760 --> 00:30:17,959 Speaker 1: folks a peace of mind that their plan is going 591 00:30:18,000 --> 00:30:21,280 Speaker 1: to work based on assumptions that are important to them. 592 00:30:21,760 --> 00:30:24,720 Speaker 1: And if you model out different assumptions. For example, if 593 00:30:24,760 --> 00:30:28,920 Speaker 1: somebody is really highly concerned the tax law changes might happen, 594 00:30:29,160 --> 00:30:31,720 Speaker 1: well let's model it out. What if capital gains rates 595 00:30:31,720 --> 00:30:34,800 Speaker 1: go from fifteen to twenty five percent, What if we 596 00:30:34,880 --> 00:30:38,040 Speaker 1: have a tickup in marginal tax rates. Let's model it 597 00:30:38,080 --> 00:30:41,560 Speaker 1: out just like we would model out Marty Carlo. You know, 598 00:30:41,640 --> 00:30:45,160 Speaker 1: analysis of market volatility like Brian just talked about, and 599 00:30:45,240 --> 00:30:47,600 Speaker 1: the key is to look at how your plan works 600 00:30:47,680 --> 00:30:51,240 Speaker 1: over both scenarios. But again, the purpose of these financial 601 00:30:51,280 --> 00:30:54,440 Speaker 1: plans is not to zoom in on exactly the right 602 00:30:54,560 --> 00:30:57,800 Speaker 1: number on the spreadsheet over the next twenty years. It's 603 00:30:57,840 --> 00:31:00,600 Speaker 1: to look at a trend. How is the plan likely 604 00:31:00,680 --> 00:31:04,320 Speaker 1: to work under different scenarios. So, if tax law changes 605 00:31:04,400 --> 00:31:07,240 Speaker 1: is something that's important to you, Charles, sit down with 606 00:31:07,280 --> 00:31:10,520 Speaker 1: your fiduciary advisor and model it out a couple different 607 00:31:10,560 --> 00:31:13,600 Speaker 1: ways so that you walk out of there feeling comfortable 608 00:31:13,960 --> 00:31:16,360 Speaker 1: that your plan is going to work in any of 609 00:31:16,400 --> 00:31:19,560 Speaker 1: these scenarios. And if it won't, then you've got some 610 00:31:19,600 --> 00:31:22,959 Speaker 1: decisions to make, basically on how much money you spend 611 00:31:23,240 --> 00:31:25,040 Speaker 1: if you do want a plan for some of these 612 00:31:25,480 --> 00:31:28,080 Speaker 1: downside you know, gut punches if we get them down 613 00:31:28,120 --> 00:31:31,320 Speaker 1: the road, all right, Brad and fort Wright says, I've 614 00:31:31,360 --> 00:31:35,120 Speaker 1: spent decades being careful and disciplined with money, and now 615 00:31:35,120 --> 00:31:37,880 Speaker 1: that we're finally in a place where we should feel secure, 616 00:31:38,400 --> 00:31:41,960 Speaker 1: I'm surprised by how anxious I still feel. How do 617 00:31:42,040 --> 00:31:44,960 Speaker 1: I know whether that anxiety means something is actually wrong 618 00:31:45,000 --> 00:31:47,800 Speaker 1: with our plan or if it's just the plain old 619 00:31:47,840 --> 00:31:50,720 Speaker 1: emotional side of letting go of control. This is a 620 00:31:50,720 --> 00:31:51,800 Speaker 1: great question, Brian. 621 00:31:51,960 --> 00:31:53,840 Speaker 4: Yeah, it's pretty common too. A lot of people go 622 00:31:53,880 --> 00:31:56,440 Speaker 4: through this, especially for people who built their security through 623 00:31:56,480 --> 00:31:59,120 Speaker 4: their own discipline rather than windfalls. If you work to 624 00:31:59,160 --> 00:32:00,960 Speaker 4: build it, you'll treat it differently than if it was 625 00:32:01,000 --> 00:32:03,120 Speaker 4: handed to you in a lump sum. So first off, 626 00:32:03,120 --> 00:32:06,280 Speaker 4: bred I would suggest try to separate that financial risk 627 00:32:06,400 --> 00:32:09,520 Speaker 4: from the control risk. Right, So for decades, your your 628 00:32:09,520 --> 00:32:13,080 Speaker 4: safety has come from your own blood sweat into your saving, optimizing, 629 00:32:13,160 --> 00:32:15,720 Speaker 4: saying no to certain purchases, that kind of thing. Now 630 00:32:15,880 --> 00:32:18,320 Speaker 4: the plan is doing the work and not you. So 631 00:32:18,360 --> 00:32:20,240 Speaker 4: that shift kind of creates a loss of agency. You 632 00:32:20,240 --> 00:32:22,520 Speaker 4: don't feel like you're in control anymore because you don't 633 00:32:22,560 --> 00:32:25,320 Speaker 4: have to be. Even a mathematically sound plan feels fragile. 634 00:32:25,520 --> 00:32:27,720 Speaker 4: That when that feedback loop between your effort and the 635 00:32:27,760 --> 00:32:30,720 Speaker 4: outcome disappears. That's real, but it's not a failure of planning. 636 00:32:30,760 --> 00:32:33,880 Speaker 4: It's just a transition. Congratulations, you built a machine that works. 637 00:32:33,920 --> 00:32:35,800 Speaker 4: Now you got to trust it. Another thing to think 638 00:32:35,840 --> 00:32:38,120 Speaker 4: about it is that that anxiety might be you know, 639 00:32:38,200 --> 00:32:41,960 Speaker 4: it's just informational. So that if the anxiety decreases when 640 00:32:42,000 --> 00:32:43,800 Speaker 4: you run these stress tests, right, if you're looking at 641 00:32:43,840 --> 00:32:47,120 Speaker 4: high inflation, poor early returns, those kinds of things. Then 642 00:32:47,160 --> 00:32:50,440 Speaker 4: it was signaling uncertainty that needed clarification anyway, And now 643 00:32:50,480 --> 00:32:53,840 Speaker 4: you've done that. That's productive, that's good anxiety. So don't 644 00:32:53,840 --> 00:32:56,400 Speaker 4: don't don't stop looking at it that way. Keep looking 645 00:32:56,440 --> 00:32:58,960 Speaker 4: under every stone for where the risks are, because eventually 646 00:32:59,040 --> 00:33:00,800 Speaker 4: your brain will get bored with it because you won't 647 00:33:00,840 --> 00:33:03,760 Speaker 4: find any. And that's congratulations are due because you built 648 00:33:03,800 --> 00:33:07,960 Speaker 4: yourself a solid plan. Hannah in Mainville, Hannah wants to 649 00:33:08,000 --> 00:33:10,320 Speaker 4: know how do you compare two plans that both work 650 00:33:10,360 --> 00:33:14,040 Speaker 4: statistically but behave very differently in worst case type scenarios. 651 00:33:14,080 --> 00:33:17,480 Speaker 1: Bob, Well, good question, Hannah, And again, you know, I 652 00:33:17,840 --> 00:33:20,280 Speaker 1: think Brian covered this one as well with the last question. 653 00:33:20,360 --> 00:33:23,880 Speaker 1: A lot of similar questions tonight just asks slightly differently. 654 00:33:24,480 --> 00:33:27,800 Speaker 1: And again, at the risk of repeating myself, I think 655 00:33:27,800 --> 00:33:31,520 Speaker 1: if you run these different scenarios based on outcomes that 656 00:33:31,600 --> 00:33:34,760 Speaker 1: you're worried about, you know, if one of those scenarios 657 00:33:34,800 --> 00:33:37,960 Speaker 1: does not work, then it's good to know that ahead 658 00:33:37,960 --> 00:33:40,280 Speaker 1: of time, and then that can allow you to make 659 00:33:40,440 --> 00:33:43,280 Speaker 1: maybe some different spending decisions, because at the end of 660 00:33:43,320 --> 00:33:46,200 Speaker 1: the day, we want people to sleep at night, And 661 00:33:46,280 --> 00:33:49,360 Speaker 1: we do not want people to panic and move to 662 00:33:49,480 --> 00:33:52,760 Speaker 1: cash at the first sign of a market to climb, 663 00:33:52,800 --> 00:33:57,120 Speaker 1: because that's what throws the entire thing off, is short 664 00:33:57,240 --> 00:34:02,040 Speaker 1: term emotional decision making. So run the scenarios, even ones 665 00:34:02,080 --> 00:34:04,960 Speaker 1: that you're you know, fearful about, and then at least 666 00:34:05,040 --> 00:34:07,239 Speaker 1: you know you know how the plan's gonna work in 667 00:34:07,240 --> 00:34:09,719 Speaker 1: any of those scenarios. And then you got some decisions 668 00:34:09,760 --> 00:34:11,600 Speaker 1: to make. Do you want to plan for the best 669 00:34:11,600 --> 00:34:14,920 Speaker 1: case scenario, the worst case scenario, or maybe somewhere in 670 00:34:14,960 --> 00:34:18,480 Speaker 1: the middle. All right, what's the best airline? A new 671 00:34:18,560 --> 00:34:22,400 Speaker 1: ranking reveals which carriers are delivering and which ones are 672 00:34:22,440 --> 00:34:26,400 Speaker 1: grounded by delays, cancelations and lost bags. You're listening to 673 00:34:26,400 --> 00:34:29,280 Speaker 1: Simply Money, presented by all Worth Financial on fifty five KRC, 674 00:34:29,680 --> 00:34:37,240 Speaker 1: the talk station. All Right, cold as ice, I gotta, 675 00:34:37,280 --> 00:34:40,800 Speaker 1: I gotta, I gotta admit something I completely missed Joe's 676 00:34:40,920 --> 00:34:44,799 Speaker 1: free freeze frame music. In the second segment, He's three 677 00:34:44,920 --> 00:34:49,520 Speaker 1: for three tonight on putting nice weather related references into 678 00:34:49,560 --> 00:34:53,239 Speaker 1: this bumper music. Uh, this is an elite evening for 679 00:34:53,360 --> 00:34:56,520 Speaker 1: our producer, Joe Strecker. Thank you sir. All Right, you're 680 00:34:56,560 --> 00:34:59,000 Speaker 1: listening to simply Money, presented by all Worth Financial. I'm 681 00:34:59,000 --> 00:35:02,000 Speaker 1: Bob Sponseller along with Brian James. All Right, you've got 682 00:35:02,040 --> 00:35:04,840 Speaker 1: the second home, the travel points and more, but which 683 00:35:04,880 --> 00:35:08,600 Speaker 1: airline is actually worth your loyalty? We've got some new 684 00:35:08,640 --> 00:35:11,240 Speaker 1: results that are in and some of the biggest names 685 00:35:11,280 --> 00:35:13,920 Speaker 1: in the sky had a really tough year in twenty 686 00:35:13,960 --> 00:35:14,560 Speaker 1: twenty five. 687 00:35:14,640 --> 00:35:17,680 Speaker 4: Brian, Well, we love our rankings these days, don't we. 688 00:35:17,800 --> 00:35:20,680 Speaker 4: So the Wall Street Journal ranked nine major US airlines 689 00:35:20,719 --> 00:35:24,640 Speaker 4: on seven equally weighted operations metrics such as on time arrival, 690 00:35:24,680 --> 00:35:28,839 Speaker 4: flying cancelations, delays, bags handling, tarmac delays, YadA, YadA, all 691 00:35:28,840 --> 00:35:31,960 Speaker 4: this stuff that tends to anger us. And also the 692 00:35:32,000 --> 00:35:36,160 Speaker 4: fun one what the Transportation Department calls passenger submissions, which 693 00:35:36,200 --> 00:35:40,399 Speaker 4: is griping and moaning from passengers of course. So what's 694 00:35:40,440 --> 00:35:42,560 Speaker 4: the best airline in America right now? This is a 695 00:35:42,560 --> 00:35:46,200 Speaker 4: little bit of a shock. It's not Delta. It's actually Southwest. 696 00:35:48,000 --> 00:35:50,919 Speaker 1: Yeah. Southwest came on top for the first time since 697 00:35:51,040 --> 00:35:56,360 Speaker 1: twenty twenty. They posted the fewest customer complaints and tarmac delays, 698 00:35:56,400 --> 00:36:01,240 Speaker 1: plus one of the lowest cancelation rates in the industry. Brian, 699 00:36:01,320 --> 00:36:04,360 Speaker 1: I think some of these numbers and surveys move around 700 00:36:05,480 --> 00:36:08,879 Speaker 1: depending on what kind of traveler you're dealing with. I mean, 701 00:36:09,160 --> 00:36:13,200 Speaker 1: if you're carrying mostly business travelers with connections and all that, 702 00:36:13,360 --> 00:36:16,759 Speaker 1: it's much more difficult to be on time. And I 703 00:36:16,840 --> 00:36:19,520 Speaker 1: think that's why Delta, you know, maybe had a little 704 00:36:19,560 --> 00:36:23,520 Speaker 1: bit of rougher time of it in twenty five. But anyway, 705 00:36:23,560 --> 00:36:28,080 Speaker 1: Southwest CEO Andrew Watterson says the airline has spent billions 706 00:36:28,400 --> 00:36:32,560 Speaker 1: on his operation since it's holiday travel meltdown in late 707 00:36:32,600 --> 00:36:35,319 Speaker 1: twenty twenty two and twenty twenty three. I think we 708 00:36:35,640 --> 00:36:39,520 Speaker 1: remember all that where you know, uncharacteristically a lot of 709 00:36:39,560 --> 00:36:43,920 Speaker 1: Southwest flights just didn't happen or had severe delays, and 710 00:36:44,000 --> 00:36:46,759 Speaker 1: it was just a shock people are and people abandoned 711 00:36:47,040 --> 00:36:49,720 Speaker 1: the airlines so to speak, for a little bit of time, 712 00:36:49,800 --> 00:36:53,239 Speaker 1: and they've they've spent five years fixing it and they're 713 00:36:53,280 --> 00:36:56,279 Speaker 1: finally back on top, believe it or not. Allegiant, who 714 00:36:56,320 --> 00:37:00,160 Speaker 1: I've had some nightmare scenarios with another budget headline or 715 00:37:00,200 --> 00:37:04,600 Speaker 1: airline actually came in second thanks to its low cancelation 716 00:37:04,840 --> 00:37:10,040 Speaker 1: rate and solid baggage handling. That's a shock to me. 717 00:37:10,320 --> 00:37:13,160 Speaker 1: Delta came in third, and I think I've tried to 718 00:37:13,160 --> 00:37:15,759 Speaker 1: explain the reasons why United was in the middle of 719 00:37:15,760 --> 00:37:19,160 Speaker 1: the road, but it did have the worst baggage handling 720 00:37:19,239 --> 00:37:22,680 Speaker 1: numbers of any airline and at the bottom of the list. 721 00:37:22,880 --> 00:37:27,040 Speaker 1: American Airlines and Front Tier tied for last place. Brian, 722 00:37:27,120 --> 00:37:29,480 Speaker 1: I know you like to travel. What's been your experience 723 00:37:29,520 --> 00:37:31,680 Speaker 1: out there? Yeah, just a little bit of everything. 724 00:37:31,719 --> 00:37:33,279 Speaker 4: I mean, it just kind of depends on which way 725 00:37:33,320 --> 00:37:35,919 Speaker 4: the wind is blowing, you know. I feel like things 726 00:37:35,920 --> 00:37:39,120 Speaker 4: took a step back when we lost our hub status 727 00:37:39,719 --> 00:37:42,319 Speaker 4: here in Cincinnati a couple decades ago. But you know, 728 00:37:42,360 --> 00:37:44,759 Speaker 4: eventually you get where you're going. I feel like I've 729 00:37:44,800 --> 00:37:47,359 Speaker 4: had I've had some sideways experience with every one of these, 730 00:37:47,440 --> 00:37:50,080 Speaker 4: so at the end of the day, we're fortunate that 731 00:37:50,120 --> 00:37:51,960 Speaker 4: we can get anywhere we want to get with one 732 00:37:52,000 --> 00:37:52,560 Speaker 4: or two flights. 733 00:37:52,560 --> 00:37:54,960 Speaker 1: Addison, is this why you like to spend more time 734 00:37:55,080 --> 00:37:58,160 Speaker 1: in your Tacoma pickup with your camper and just ignore 735 00:37:58,200 --> 00:38:01,600 Speaker 1: the whole process, Just find a way to not be involved. 736 00:38:01,960 --> 00:38:03,759 Speaker 4: I go running away in the woods and hide and 737 00:38:03,800 --> 00:38:05,800 Speaker 4: nobody bugs me, and I handle my own baggage. 738 00:38:06,480 --> 00:38:09,239 Speaker 1: All right, good stuff, all right, A little bit of 739 00:38:09,920 --> 00:38:14,400 Speaker 1: perspective here, American did have the highest cancelation rate, but 740 00:38:14,840 --> 00:38:17,200 Speaker 1: again at the end of the day, we're just talking about, 741 00:38:17,239 --> 00:38:20,279 Speaker 1: you know, around the edges here. The highest cancelation rate 742 00:38:20,360 --> 00:38:24,440 Speaker 1: was just two percent of flights. For comparison, Southwest, the 743 00:38:24,520 --> 00:38:28,280 Speaker 1: quote unquote best airline canceled a little less than one percent. 744 00:38:29,200 --> 00:38:31,960 Speaker 1: This is just all something interesting, just to date it 745 00:38:32,040 --> 00:38:34,239 Speaker 1: to kick around for those that like to travel a lot. 746 00:38:34,440 --> 00:38:36,960 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 747 00:38:37,000 --> 00:38:40,319 Speaker 1: presented by Allword Financial and fifty five KRC, the talk 748 00:38:40,400 --> 00:38:40,640 Speaker 1: station