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Payne Points of Wealth Podcast

6 Trillion in Cash: Are investors in denial about interest rates? Ep#145

By January 21, 2024No Comments

The inertia of money – will investors make the same mistake this year?

Investors don’t want to move their money because they’re getting 5% right now. But we know with a lot of clarity those rates will drop this year. Now’s the time to be proactive and get your money invested as opposed to sitting in cash.

The Fed is already at its target

When you look at core numbers shelter inflation is declining. So if you take that number out, the Fed’s already at their target.

we know the Fed's going to cut rates this year. The odds are extremely high, yet you get the kind of inertia with money.

Ryan Payne

..Money market funds have floating rates .. you want to make sure you're a little more forward thinking with your money.

Courtney Garcia, CFP®

..even with the market ramping up so much, everybody still has so much money in cash and they just can't get off that ledge..

Chris Payne

..take out the shelter numbers, really smart economists like Jeremy Siegel and Ed Yardeni recognize, the Fed's already at their target.

Bob Payne

The Tipping Point

Important Questions to Ask Your Financial Professional

Today, we discuss some of the most important questions you should be asking your financial professional to ensure you’ve got the right financial game plan for 2024 and beyond.

Question #1: Can I live off my assets when I want to?

..you should do a financial plan first, go through what your income is, what you're saving .. then set a target date when you want to live off those assets.

Chris Payne

.. We're in a new year.. it's just a good reminder. Take a look.. make sure you're getting your projections updated..

Courtney Garcia, CFP®

There's nothing more comforting than running those projections..you've been following the plan for 10, 15 years. You can’t outlive your money.

Bob Payne

Question #2: How much am I paying in fees?

A lot of times you just don't know what you're paying and you get sticker shock when you find out what the actual fees are.

Ryan Payne

I can't tell you how many people are currently not paying an adviser but they're paying more in fees than working directly with an advisor who will use lower cost products.

Courtney Garcia, CFP®

Hidden Facts of Finance

The dividend champ of all the publicly traded companies, there’s only one with 69 straight years of dividend increases, it’s called American States Water, a smallish California utility worth about 3 billion that supplies water to 80 communities in the state. American States Water stock has excellent long term track record, with an annualized return of 12.5% a year since 1988 versus 10.8% a year for the S&P 500. An impressive showing for a low risk utility. Just as a comparison, Coca-Cola’s raised their dividend 61 straight years in a row.

BYD overtook Tesla to become the world’s biggest electric car company in the final quarter of 2023. The Chinese company sold a record 525,000 battery electric vehicles in the last three months of the year, ending December 31st. As a comparison, Tesla delivered 484,507 in the same period. However, of the entire year, Tesla still outpaced BYD selling 1.8 million electric vehicles versus BYD’s 1.57 million electric vehicles still up 73%.

Abercrombie Fitch was the biggest winner last year. Their shares soared 285% beating not just the S&P 500 up 24%, but the top five performers in the S&P, including Nvidia, which was only up 239% from a comparative basis.