It’s Episode 124 and disbelief is the mother of all bull markets. We hit a recent high this past week in the S&P 500, piercing above where the index was last August on a lot of really good news. Inflation coming down a lot over the course of the last couple of months. We see the Fed making a decision to pause on interest rates. China is stimulating its economy as it’s been slightly slower than was expected on the reopening. So a lot going on, a lot of questions about what’s going to happen for the rest of the year. Is it highly likely we’re going to go into recession, not going into recession? And does this bull market have legs?
On The Tipping Point, we’re going to talk about the long game. When you’re investing your money, trying to get financially independent, you got to think long term, not short term.
Disbelief is the mother of all bull markets
The market bottomed in October, and every economist predicted a recession, maybe a depression. But no one was telling you it’s a good time to invest. The market is looking at next year, not today, not yesterday, not last week, because the economy is muddling through in spite of the headwinds, including the Fed raising interest rates to such an extreme level in a short period of time.
”If you look at the level of negativity and pessimism around the economy.. it's one of the longest stretches we've seen .. it goes back all the way through last year.
Ryan Payne
”Now's a good time to put some money in the market while the market's cheap.
Chris Payne
Will technology help solve the labor shortage?
There are tailwinds in this economy right now that are not being fully appreciated, like artificial intelligence.
We hear stories like ultimately it’s going to kill us and we’re going to wipe us out be the worst thing that ever happened. But every innovation in technology is the worst thing that ever happens. The truth is it’s going to help productivity in every industry and make people more efficient. Technology and evolving innovation are what the U.S. economy and a global economy have always been about.
The AI impact is going to be huge
It really comes down to a lot of the problems we need to solve. You need automation, you need artificial intelligence just to fill in the gaps because we don’t have enough people.
”AI can help make people more efficient.
Bob Payne
”It's like when I go to CVS now I can self-check out because they don't have enough people. And that's really the solution.
Ryan Payne
The Tipping Point
The Long Game
Payne Points
It’s a great thing that we’re all living longer but it does pose complications when it comes to your financial independence plan. You really have to plan for your money to last a lot longer than your parents did. That’s why today we want to talk about playing the long game. When it comes to your portfolio, things you need to think about so you can remain financially independent for the rest of your life.
Your expenses do not go down as you get older. Things to consider include:
- People want to enjoy their life in their later years. Many in their 80s like to travel, play golf, and go out to dinner and their expenses do not go down as they get older.
- Healthcare costs get more and more expensive
- Long-term care is an important thing you need to factor in. Decide if you’re going to self-insure your long-term care or buy an insurance policy. Either way, it should be addressed as early as your mid-50s to get the best premiums.
- Having a balanced portfolio between being too aggressive and too conservative. It’s something that should be evaluated every year.
”You're going to spend at least a quarter million dollars per spouse in retirement, which I'm telling you guys, all the new cases that I've been looking at, no one's done this type of planning.
Bob Payne
”..it comes down to having belief in what you're invested in and having belief in that you have a good financial plan.
Chris Payne
”.. a lot of times when you give your money to the insurance company, you're betting on a relatively low rate of return.. you have to weigh out if you can get a better rate of return on your own investments..
Ryan Payne
Hidden Facts of Finance
Silicon Valley Bank employees at all levels could buy company shares at a 15% discount, according to a benefits brochure. Staffers could also hold shares in their 401ks. SVB stock was made up 18% of retirement plan assets, an unusually high amount at a public company, according to an analysis by the National Center for Employee Ownership.
Meta is requiring all employees to work in the office at least three days a week, with no exceptions.
John Deere says its fully autonomous tractor platform for planting, weeding, and watering, and harvesting could lower farm operations by 25%.
Emerging markets represent nearly 70% of the world’s growth, but only 20% of the total global equity market capitalization, according to morning, according to Morningstar. A burgeoning middle class continues to develop in emerging markets and should present interesting opportunities for investors, albeit with higher volatility.
