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Payne Points of Wealth Podcast

Will Nvidia be the Cisco of 2024? Ep#146

By January 26, 2024No Comments

Stock Market Bubble?

We’re seeing money narrowing into those big mega-cap stocks as the S&P 500 reaches a new all-time high. The weighting of tech in the S&P is starting to resemble the index back in ’99-2000 before the tech bubble burst.

Last year many investors were panicked and no one wanted to be in the market. Now the pendulum is starting to swing the other way. People are asking “what am I doing in all this cash? My 5% is going away. Let me get into the market.”  And of course, they’re going to follow the winner.

The problem is when you get a big bubblicious move up, the other side of it typically isn't pretty.

Ryan Payne

Comparing Cisco and Nvidia

Back in the day, Cisco stock was flying high. Investors wanted it. They didn’t really know what it was but they had to have it. Today, Nvidia is the winner everybody wants to own. Since it bottomed out, Nvidia is up over 250%. It can go higher but at some point, everything goes out of favor.

..I'm starting to get the same calls now.. "Bob, I need to own Nvidia!"

Bob Payne

I think that's the biggest risk.. not being smart, proactive, diversifying.. putting blinders on and putting all your money in one place.

Ryan Payne

But there is good news for investors with FOMO who want an alternative to sitting in cash

There are still opportunities in small and mid-cap stocks, which are below their all-time high. The equally weighted S&P is not at its all-time high. Also, plenty of opportunity in international stocks.

..meanwhile, we've got bargains everywhere.

Ryan Payne

The Tipping Point

Financial Planning Fill in the Blank

Ryan quizzes Bob

Today, Ryan quizzes Bob on financial planning with a “fill in the blank” challenge. Listen or watch for Bob’s answers, but we’ve given some hints below.

#1 The best way to be sure you don’t run out of money in retirement is to ________________.

Be sure you compensate for biggest, most insidious, heinous tax there is....

Bob Payne

#2 The stock market has the ability to  ________________.

..confound the majority opinion of the time..

Bob Payne

#3 You should run the other way if a financial advisor tells you  ________________.

..I have a whole list for that one..

Bob Payne

Hidden Facts of Finance

In 2000, you got 5.5% for a one-year CD but the post-tax return was -2% when you factored in a 25% tax rate and a 3.38% inflation rate.

Since 1962, after the yield curve inverts, the average is 589 days to go into a recession.