It’s Episode 130 and the rally continues to broaden. We’re seeing energy stocks, financial stocks, small-cap stocks, and emerging markets, really starting to move as tech has started to slow down and cool off a little bit. Is this a real rotation in the market? Do you need to reposition your portfolio?
On The Tipping Point, we’re going to talk about your financial health, how it’s very similar to your physical health, and the kind of checkups you need to make sure you’re on your path to financial independence.
Remember BlackBerry?
BlackBerry was revolutionary in its time. It was a wireless phone that you could email on. A Canadian company that was at 45% market share and is now zero. At the time, nobody could have predicted that Apple would get into the smartphone business and create the iPhone.
Could it happen to Apple? You don’t know.
Apple is a great company. But concentrating on one stock because it’s a great company is a poor investment strategy. Creative destruction is always happening and you never know where it’s going to come from.
The mistake investors make
Apple stock is number one holding in the S&P 500. The number 8 holding is Berkshire Hathaway, which is almost 25% Apple, too.
”No one would have predicted that at that time Apple was going to get into the smartphone business and eat BlackBerry's lunch.
Ryan Payne
”A great reminder of the creative destruction that you have in a capitalist society.
Bob Payne
Diversifying means not having to be exactly right about any one company or sector. Cover all your bases.
Investing is hard for those who need to be exactly right about an individual stock, or a sector. The opposite of right is precisely wrong. Just own everything and broaden your exposure.
Don’t try to time the market
Markets are up over 25% since September, and some are thinking, do I get in now? Do I wait for a pullback? But the problem is you’re always waiting for a pullback. Last year was a great time to invest, but everyone on Wall Street told you, don’t get in yet. The market’s going to go even lower. And you keep waiting and all of a sudden you miss another move in the market.
”..if you have to be right, the opposite of that is precisely wrong. And that doesn't get you anywhere. So that's why a lot of investors fail.
Bob Payne
Look at what nobody’s talking about
Emerging markets are up like 6% in the last month. Oil now is going higher, maybe due to China reopening, which has been slow, but is starting to happen. Even now with markets up big, there are lots of asset classes that are still cheap. And even if you have a short-term sell-off, your bigger risk is missing that big move up.
”Just get invested. Don't wait.
Ryan Payne
The Tipping Point
Your Financial Health
Payne Points
At our firm Payne Capital Management, we’ve found you really need to treat your financial life the same way you do your physical health. And most of us don’t do that.
Some people just avoid that checkup
The problem with people getting physicals every year is they don’t. And the same thing happens with your financial life. We think it’s so critical that you have someone that says, Hey, we’re going to sit down, have a regular checkup every 12 months because your financial health is always changing, like your physical health.
”Our grandmother used to say "I don't want to go to the doctor because I'm afraid he's going to tell me there's something wrong." Well, the same goes for your portfolio.
Chris Payne
”You always get that physical every year, but you've got to have regular financial check ups, too. And most of us don't do that.
Ryan Payne
Prescription without diagnosis is malpractice
Some in our industry prescribe without diagnosing. You walk into these firms and they just start selling you products and they have no idea what you’re trying to accomplish. You would never do that with your physical health. We end up with a collection of investments because someone just prescribed something without even looking at what we’re trying to do.
”Wait a second, you didn't check my vital signs or my overall health. How do you know that's the right solution? But that's the equivalent getting a financial plan.
Ryan Payne
Do you have a financial specialist?
In the medical world, you have your general practitioner that you may go to to check your general health, but you typically get referred to a specialist when you have something wrong. The financial industry is not that different. You want to have that wealth planner, someone who’s looking at the overall picture. You also want a specialist who works with taxes. An estate planner that knows how to title everything properly and have it all coordinated together.
”You need to have someone that coordinates everything with your CPA, with your attorney and someone who really cares about you.
Bob Payne
Hidden Facts of Finance
Among companies up more than 300% this year, Carvana, known for its dozens of car vending machines and zero years of profitability, crypto mining concerns, Riot Platforms and Marathon Digital Holdings, and Upstart Holdings, an AI-driven lender.
Deloitte estimates that the US will face a shortage of 70000 to 90000 semiconductor workers over the next few years. McKinsey forecast that the US should be short 300,000 engineers and 90,000 skilled technicians by 2030. This could prompt a highly skilled migration campaign to the US.
It’s impossible to miss the headlines about possible work stoppages, massive wage increases, and other work-related issues. Screenwriters and actors are striking. While UPS just reached a five-year labor deal with the International Brotherhood of Teamsters that would raise wages by roughly 30% cumulatively over five years. And now General Motors is in the crosshairs as it negotiates with United Auto Workers.
