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Speaker 1: This is Taking Stock. Coming up on taking stock making
Speaker 1: decisions about your money. We'll talk about motivation that healthy
Speaker 1: financial relationship, behavioral economics, coaching, as well as therapy techniques
Speaker 1: and how to do real good research called Barks for Me.
Speaker 1: Joining us from Boston based actually well, the mass based
Speaker 1: Commonwealth Financial Network. As we continue our special live broadcast
Speaker 1: today here at Smith and Williski Restaurant right down on
Speaker 1: the Boston Harbor, Let's get back to the newsroom in
Speaker 1: the World headquarters. Charlie Pellett's got a Bloomberg business flash
Speaker 1: and I thank you very much. Kathleen, thank you him.
Speaker 1: The Dow just turning negative, down a point right now,
Speaker 1: as P five hundred index a little change, giving up
Speaker 1: earlier gains. The SMP five hundred index is higher. It
Speaker 1: is on track to snap a two day losing streak
Speaker 1: as rebounding crude prices spurs rally and energy producers, while
Speaker 1: corporate earnings help whose financial companies. West Texas Intermediate crude
Speaker 1: up three point two percent of advancing a dollar seven
Speaker 1: eight right now on w t I. Brent crude up
Speaker 1: two point nine percent to affarel, the tenure up four
Speaker 1: thirty seconds, the yield there one point five four. Michael
Speaker 1: Purvis is chief global strategist at Weedman Company. He was
Speaker 1: interviewed this morning on Bloomberg Surveillance. The real focal point
Speaker 1: here is is that the role of central banking, the
Speaker 1: role of the tenure, treasury yield in the equity equation
Speaker 1: has become more and more dominant. And if there's a
Speaker 1: reversal in that, right, if that, if that, if that,
Speaker 1: uh cork explodes the other way and we have a
Speaker 1: massive sell off and sovereign paper that is going to
Speaker 1: um the you know, very disruptive to the equity framework
Speaker 1: that is supporting a lot of these things. American International
Speaker 1: Group is on track for its biggest jump in four
Speaker 1: years after its profit beat estimates. Oil surging more than
Speaker 1: three percent today. We've got a i G up seven
Speaker 1: point two percent, up three seven to fifty eight O
Speaker 1: two right now on a I G healthcare shares falling
Speaker 1: for a second day, Biogen down more than four percent
Speaker 1: of it doubts it could be a takeover target. SMP
Speaker 1: five hundred index off a point to fifty seven. Again
Speaker 1: there of point one percent. Goal down eighty beounced thirteen
Speaker 1: fifty nine, a drop of point six percent. And now
Speaker 1: let's take a look at the other stories making news.
Speaker 1: Thank you Charlie from the Bloomberg news room. I'm rainey
Speaker 1: in a cent cio. There's a report that senior Republican
Speaker 1: officials are exploring options if Donald Trump quits the presidential race.
Speaker 1: AC News says those officials believe that Trump is so
Speaker 1: unpredictable he might withdraw. A new candidate would have to
Speaker 1: be selected by one sixty eight members of the Republican
Speaker 1: National Committee. White House Press Secretary Josh Ernest was asked
Speaker 1: today about Trump's suggestion that November's presidential election could be rigged.
Speaker 1: I would just note that it is often acclaim made
Speaker 1: by people who don't end up winning elections. President Obama
Speaker 1: is shortening the sentences for two hundred fourteen federal prisoners,
Speaker 1: including sixties seven serving life sentences. It's the most commutations
Speaker 1: in a single day in more than a century. Almost
Speaker 1: all the prisoners were serving time for non violent drug offenses.
Speaker 1: Most will be released December one. Dr Anthony Fauci, director
Speaker 1: of the National Institute of Allergy and Infectious Diseases, says
Speaker 1: the Zeke virus is unlikely to become a national epidemic
Speaker 1: here in the US. It's unlikely that we are going
Speaker 1: to have a broad, widely disseminated outbreak of ZEKEA in
Speaker 1: the continental the United States, similar to what's happened in
Speaker 1: Brazil and what is happening in Puerto Rico. At least
Speaker 1: fifteen cases of zeke infections have been confirmed in an
Speaker 1: area of Miami. They're believed to have been transmitted locally,
Speaker 1: and New Jersey has received a half million dollars from
Speaker 1: the CDC to help treat any ZEKEA infections and pregnant women.
Speaker 1: The latest statewide count shows seventies six infected with ZEKA
Speaker 1: after returning from travel overseas. Half of them are in
Speaker 1: Bergen and Passaic Counties. Officials say there are no cases
Speaker 1: of the infection being transmitted by mosquitoes and that the
Speaker 1: species that carry the virus has not been found in
Speaker 1: the state. Global News twenty four hours a day, powered
Speaker 1: by more than journalists and analysts in more than one
Speaker 1: hundred twenty countries. I'm Rainy and Essensio. This is Bloomberg, Charlie,
Speaker 1: and we thank you. And again we've got stocks higher.
Speaker 1: Tesla reporting after the closing bell up now by eight
Speaker 1: tenths of one percent, SMP five Index up a point
Speaker 1: again there of one tenth of one percent. I'm Charlie Palaton.
Speaker 1: That's a Bloomberg business flash. This is taking stock with
Speaker 1: them Fox and Kathleen Hayes on Bloomberg Radio for broadcasting
Speaker 1: Life Today from Smith M. Lensky's near the Boston Harbor
Speaker 1: in Boston Seaport District. So we can talk to people
Speaker 1: like our next guest, So, how do you feel about
Speaker 1: the market right now? How do you feel about your investments?
Speaker 1: Do robo advisors make you feel better or worse? Well,
Speaker 1: here to talk about what makes us think that way
Speaker 1: and ways we can do with our own thinking. Caulbert
Speaker 1: He is senior vice president, Technology Strategy and financial behavior
Speaker 1: Specialist at the Commonwealth Financial Network. He's here in the
Speaker 1: Boston area. H You may recall hearing him on the
Speaker 1: show when we've gone to the Commonwealth Financial Annual Meeting.
Speaker 1: Always a treat for us on taking stock cold Welcome
Speaker 1: back to the show, Thanks so much for having me.
Speaker 1: So your degree and uh, you're actually it's a master's
Speaker 1: have applied positive psychology from the University of Pennsylvania. Uh,
Speaker 1: A lot of people don't feel that positive right now,
Speaker 1: and I honestly think robo advisors is one of the reason,
Speaker 1: because maybe millennials feel better because I like to just
Speaker 1: do things on their phones. But I think a lot
Speaker 1: of people miss the human touch absolutely, and I actually
Speaker 1: think millennials missed the human touch too. One of the
Speaker 1: things that I think is missed in working with millennials
Speaker 1: is the fact that they do want wise advice. They
Speaker 1: may want it through an instant message or a text
Speaker 1: or you know, a video chat or something else where.
Speaker 1: It's they're not having to actually go to your office,
Speaker 1: but they do want someone that they can rely on.
Speaker 1: How do you how do you identify fear based attitudes
Speaker 1: and behaviors? Well, I think that there are ways that
Speaker 1: you can identify it, certainly in person when you see
Speaker 1: different facial expressions and when you see different body postures,
Speaker 1: and there are incredible techniques that are just so easy
Speaker 1: to use. Like whether it's a doctor or financial advised
Speaker 1: or any professional when they see this type of behavior,
Speaker 1: One thing that they should know is that there are
Speaker 1: actually two nervous systems in the body. One system is
Speaker 1: that fight and flight nervous system. And when I'm in
Speaker 1: that state, that's called the sympathetic. When I'm in the
Speaker 1: sympathetic nervous system, I actually can't think rationally. It's only
Speaker 1: in the parasympathetic with psychologists nicknamed the rest and digest
Speaker 1: system that I can think rationally and make wise decisions.
Speaker 1: And so when an advised or or a doctor or
Speaker 1: anyone else who's trying to counsel someone is working with
Speaker 1: someone that they see is stressed or anxious or fearful
Speaker 1: or angry, the first step is really moving them from
Speaker 1: that sympathetic to the parasympathetic. Well, you better have a
Speaker 1: degree in pasitive psychology to do that, or you better
Speaker 1: have watched Lie to me that series that ran for
Speaker 1: a couple of years, which must have been one of
Speaker 1: your favorites. Absolutely, and that's based on actual research that
Speaker 1: was done worldwide to recognize different emotions that actually they
Speaker 1: have these things called micro expressions where when you practice this,
Speaker 1: you can actually see these things that the person themselves
Speaker 1: might not even realize they're experiencing. Absolutely, it's a great show,
Speaker 1: all right. Now, let's tie that into how people address
Speaker 1: their investments, because if you're a robo advisor, if you're
Speaker 1: doing something where it's just a human to a piece
Speaker 1: of technology, you can answer questions rather dispassionately and think
Speaker 1: that you're giving the correct answer. But when the stock
Speaker 1: market goes the way you didn't expect, that rationality can
Speaker 1: go out the window. Such a great point, So psychologists
Speaker 1: also talk about this notion of hot states and cold states,
Speaker 1: and hot states are when you're emotional and cold states
Speaker 1: or when you're rational, and a lot of times when
Speaker 1: you're filling out paperwork or going through an online wizard,
Speaker 1: you're in one of those cold states, and so you're
Speaker 1: rationally thinking about how much risk I can comfortably take.
Speaker 1: But then of course the market starts going down and
Speaker 1: you see your savings dwindling and retirements out the window.
Speaker 1: You might have to defer for a few years and
Speaker 1: you hate your job. All of a sudden, that hot
Speaker 1: state has kicked on, right, and so it pushes you
Speaker 1: to make act to take action, and a lot of
Speaker 1: times that action isn't in your best interest. And that's
Speaker 1: where whether it's a wise friend or a wise financial advisor,
Speaker 1: that's where they really come in handy in or and
Speaker 1: they're going to keep How do I know if I'm
Speaker 1: got the right financial advisor? I might if I feel
Speaker 1: good talking to you? Is that a good sign? Or
Speaker 1: does it show that I'm kind of gullible? And if
Speaker 1: someone's nice to me it says what I want to hear,
Speaker 1: You know that I'm not going to get the best advice.
Speaker 1: Is there a way to to deal with your feelings
Speaker 1: which drive a lot of the thought, but which we
Speaker 1: think is objective, but it's very subjective when it comes
Speaker 1: to making an important decision like that. That's a great question.
Speaker 1: There's actually some interesting research out there about doctors and
Speaker 1: that the doctors that they're that patients like the best
Speaker 1: actually give some of the worst advice. And so I
Speaker 1: think you're spot on that it's not just about feeling
Speaker 1: good about your financial advisor. It's also that they help
Speaker 1: you plan for the future. I think there are really
Speaker 1: three things that a financial advisor can spend their time
Speaker 1: on trying to predict the future, what's going to happen
Speaker 1: in the markets, what tax laws are going to change, etcetera.
Speaker 1: And personally, I think that's impossible. So if you have
Speaker 1: an advisor that's telling you they're doing that, they're likely
Speaker 1: not actually able to do that. They can plan for
Speaker 1: the future right techniques that already exist, whether it's putting
Speaker 1: money into a row for the right reasons or whatever
Speaker 1: else might be, and then they can wisely react with
Speaker 1: you to the current events. And I think those last
Speaker 1: two are the things that advisors should focus on. And
Speaker 1: so if you have an advisor that's doing those last two,
Speaker 1: well then you're in the right place. I want to
Speaker 1: just get your thoughts on the combination of having a
Speaker 1: live human being assist you or guide you with your
Speaker 1: financial future, but also employing some of these new robo
Speaker 1: advising technologies. Give me about ten seconds, All right, great point.
Speaker 1: I think it's robo versus RoboCop. And everybody wants RoboCop.
Speaker 1: You want somebody that you can look at in the eyes,
Speaker 1: but who's using all of the technology that the world's
Speaker 1: got available. And so similarly, if your advisor isn't using technology,
Speaker 1: they're not able to serve you well, thanks very much,
Speaker 1: good advice, good interesting alright. Cole Burke is the senior
Speaker 1: vice president Technology Strategy and a financial behavior specialist for
Speaker 1: Commonwealth Financial Network. They are based in Waltham, Massachusetts. If
Speaker 1: you're listening to Taking Stock, I'm pim Fox. My co
Speaker 1: host Kathleen haays. We are broadcasting from Atlantic Wharf in Boston,
Speaker 1: home to Smith and Lensky's. This is Bluebird. Donald Trump
Speaker 1: is against it, Present Obama is for it. Killer Clinton
Speaker 1: seems to be somewhere in the middle. Find out if
Speaker 1: the T P P trade deal is good politics and
Speaker 1: good economics. That's next.