Payne Points of Wealth
 

Payne Points of Wealth

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Welcome to the Payne Points of Wealth: The podcast that addresses all the pain points that come with creating your wealth, growing your wealth, and sustaining your wealth. Hosted by the Family Wealth Experts of Payne Capital Management, Bob, Ryan & Chris Payne. On a weekly basis, they deliver timely strategies and solutions for the pain points that come with building, preserving and managing your wealth.

Episodes

If it’s in the Press, it’s in the Price, Ep 16

Thursday Dec 03, 2020

Thursday Dec 03, 2020

We basically have the same story over and over again, pundits are concerned about the second wave of the Coronavirus and as we’re recording this, we have a change of regimen of government, and a new president starting in January. What does that mean for the markets? The concern is abounding and there is record cash, yet the market continues to go higher just as we predicted on this podcast weeks ago. So the BIG question is… where do we go now? That's what we're going to dissect on today’s show! Don’t miss it!

 

You will want to hear this episode if you are interested in...

  • Record highs [1:14]
  • Impossible timing [2:47]
  • Economic data -vs- the news [4:44]
  • Handling a downturn [7:01]
  • The Tipping Point [8:59]
  • Fear around investing in the market [10:33]
  • Too much risk [12:40]
  • Millennials aren’t 20 anymore and they’re playing catch up [14:31]
  • Hidden Facts of Finance [17:03]
  • What creative destruction is around the corner? [18:43]
  • Finding a needle in a haystack [20:42]

Embracing a history that creates wealth

If we know about it— if it's in the press, it's in the price— the market knows about it too, it's not ignoring that. It's the difference between being an informed, educated investor and just waking up every day and making it up as you go. When you look at the historical returns of the market and you look at the history of our economy, it always grows. 

If you make a projection of where the S&P, Dow, Russell 2000 or Ethereum Indexes will be in the next 10 years, we'll tell you one thing we know— it's going to be higher. We don't know when it's going to go higher, but it will be higher. It's just a matter of educating yourself on the history of the market. Understanding how the market is always discounting future revenues and future earnings and looking at volatility differently. People shouldn't be afraid of it, they should be embracing it because that's how you create wealth. Interested in hearing more? Check out the episode to see all the brilliant things we have to share! 

This week on the tipping point: managing risk

Managing risk is one of the most crucial elements of a successful wealth plan. So we thought we’d break down what risk really means to your portfolio. How do you really manage it? Risk is something that's only truly recognized in hindsight. When you think about risk, it's the possibility of something bad happening. No one likes bad things, right? If you're always avoiding something bad then you’re sitting on your hands and inertia causes you to do nothing. But risk does cut both ways so if you're sitting on your hands, in this case, you're sitting in cash. That insidious tax inflation's going to eat away at your purchasing power and you probably won’t be able to retire as early as you’d like. Check out the episode to hear about the flip side of that when you take too much risk!

This week’s hidden facts of finance

Every week Ryan goes out of his way to make a point that investing in the S&P 500 is not a one-stop-shop when it comes to investing. The detail that a lot of investors are missing is that it's a global economy and China is coming on strong. Right now there are 119 homegrown electrical vehicle companies in China. They have 1.4 billion potential customers that might be buying upcoming Chinese cars over Tesla cars. Just like Yahoo fell victim to a better search technology being developed by a little known startup called Google back in 2000, you never know what kind of creative destruction's around the corner that will change everything. For more fun facts be sure to listen to the show! 

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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The Mother of All Stock Rotations, Ep 15

Thursday Nov 26, 2020

Thursday Nov 26, 2020

We told you that you could see a stock melt-up going into the end of the year, and now we're here. Money's come off the sidelines in droves! Money managers are getting reinvested, and the big question comes: Is this it? Have we gotten the melt-up? We are also going to hit on what you should be doing with your wealth plan right now and how you should be setting that up. We're going to break it down for you, so be sure to check out the episode!

You will want to hear this episode if you are interested in...

  • Revenge of the nerds! [1:13]
  • Growth that’s made everything else pale in comparison [3:04]
  • Don’t get tricked into thinking you’re diversified [5:13]
  • The market doesn't care about valuation...until it does [6:08]
  • The Tipping Point [9:05]
  • Knowing what you own and why you own it [10:45]
  • Taking money from your portfolio [12:42]
  • Something more important than just a good stock idea [16:02]
  • Hidden Facts of Finance [17:36]
  • Lending money where you’re guaranteed to lose [19:02]
  • ETFs cross a milestone for the second time ever in 2020 [21:33]

Tech’s outperformance has “normal stocks” paling in comparison

We’ve made a killing in tech stocks over the last 10 years. Its growth has way outperformed what it does historically. Historically, it’s been normal to average about 10% per year. We've seen 18% per year for the last 10 years even though the rest of the value and small-cap companies have done about average. It's not that these small-cap companies are horrible performers, it’s that growth has been so ridiculous over the last 10 years, it makes everything pale in comparison.

This week on the tipping point...knowing what you own and why you own it!

Up until the pandemic hit back in March, many people would ask why they own bonds? They don't pay very much. It costs a lot to buy them. However, as the pandemic hit, bonds were the only thing in their portfolio that was profitable, and now you have the ability to take some profits from the bonds and buy back into the market when it's low. A bond is something that is negatively correlated. That just means it goes up and down differently than the rest of your financial assets. For more on this check out the episode!

This week’s hidden facts of finance

It may surprise you that when a Democrat takes over the presidency from a Republican (which, for the record, we're NOT saying has happened yet) the average cycle return has been 43.6%. What usually shocks everyone to find out is that a market under a Democratic president historically has done better than a market under a Republican president. Just so you don't get too concerned, it doesn't matter if it's a Democrat or Republican because historically the market's always going up as long as SOMEONE is sitting in the oval office! Check out the show for more hidden facts of finance!

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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What are you doing with your money that can get in the way of good investing?, Ep 14

Thursday Nov 19, 2020

Thursday Nov 19, 2020

Today, we're talking about AFTER the election, we’ve talked about the election for the last couple of weeks and we warned you not to let the election get in the way of making good investment decisions. The economy is recovering. And what do you know, the Payne’s were right. The market has been straight up since the election. Well, it's theoretically over, right? We're not 100% sure, but it looks like Biden will be in the White House come January. With elections over and the economy starting to recover the question is... What do you do with your money now? What strategies do you utilize? What should you be looking for? We're also going to talk about other things that can get in the way of good investing and things you need to watch out for in your portfolio to make sure you get on YOUR path to financial independence. Let's hit it. Let's get into it. We've got a great show for you this morning so don’t miss it!

You will want to hear this episode if you are interested in...

  • The economic recovery that’s being missed [2:01]
  • Is it a matter of change or waiting on the rules? [3:42]
  • American’s finding a spend save balance? [5:46]
  • Economist still casting doubt about spending [7:08]
  • The Tipping Point: overconfidence in your ability to manage your portfolio [9:09]
  • The Market is the most humbling place in the Universe! [10:52]
  • The flip side...lack of confidence [13:27]
  • Good investing’s just not sexy [15:48]
  • Growth vs value [17:42]
  • Hidden Facts of Finance [19:47]
  • Cash is trash [22:19]

Mind-blowing recovery and the why behind uncertainty 

Unemployment today is where economists thought it was going to be at the end of next year. We're there a year ahead of schedule. Historically the stock market makes about 10% after net of inflation you're about 6-7%. In the last two weeks, the market went up almost 14%. So that's like two years’ worth of return in two weeks! How’s that for recovery!

Are the political leaders on Capitol Hill smarter than the captains of industry that run our biggest companies? We think companies just sit back and say, okay, what are the roadblocks they're going to create in Washington, DC. They wait until the rules are set so that they can figure out how to maximize profit margins based on their new rules. That's why there's so much uncertainty around elections. It's not a matter of if it’s going to change things. It's a matter of the captains of industry, the companies that you all invest in and that we all own, are waiting to see what the new rules are so they can figure out how to get around them to make the most money for their shareholders and for themselves.

This week on the tipping point

We've talked about this a lot in the past, but your ego and overconfidence can get in the way of a solid financial plan. We've seen many cases that have led to destruction in people's financial life because their ego and their overconfidence in their abilities to manage a portfolio made them blind to real holes or issues within their financial plan. Today, we will break that down so that our listeners don't make the same mistakes with their portfolios. If anyone can see holes in portfolios, it's the three of us so tune in to get the goods!

This week’s hidden facts of finance

Vehicle sales have experienced a V-shape recovery, increasing 36% from the 2nd to 3rd quarter of 2020. Auto manufacturing contributes more jobs than any other industry when you take into account all the parts, and suppliers, aftermarket servicers, replacement parts suppliers, and support services for a major auto plant. In hindsight, it's not surprising that car sales went up. Who wants to ride the subway during a pandemic! 

We've seen more New York license plates in New Jersey than ever before. People are coming out of the cities. They're buying in the suburbs of New Jersey and the subway doesn't get you there! So car sales are increasing. Not a shock in hindsight, but who could have predicted that last March. It’s definitely one of the reasons why the unemployment numbers have come down so much over the course of the last couple of months. Check out this segment for more hidden facts of finance!

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris

Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Trading One Uncertainty for Another, Ep 13

Thursday Nov 12, 2020

Thursday Nov 12, 2020

We are finally past the election so we can put that worry behind us... and pick up a new one. As the economy continues to open we’ve seen reports of a spike in Coronavirus cases. Reports have come in about countries in Europe, like France and Germany, starting to lockdown again. The uncertainty has shifted to how we are going to keep reopening the economy. However, if you look PAST those headlines of “Europe Shutting Down” you will see that schools are still open, you can still get a haircut, it’s not the kind of lockdowns we faced in March, it’s more like lockdown lite! Listen to the episode for the full story and loads of other great info!

 

You will want to hear this episode if you are interested in...

  • The news in plain sight [0:33]
  • The certainty of uncertainty [1:46]
  • Necessity is the mother of invention [3:23]
  • What’s going to drive stocks higher? [5:12]
  • Dividends are going up! [6:40]
  • The Tipping Point [8:53]
  • How do you get money in the market without being all or nothing? [11:23]
  • Have a trusted advisor to rebalance your portfolio [14:03]
  • Building your Arc before the flood comes [16:16]
  • Hidden Facts of Finance [18:21]

 

More signs of a recovering economy 

Stock dividends are going up. Income's going up. It’s like every company is saying, “Hey, our picture looks good for next year. We're comfortable paying out some of our profits now.” They weren't comfortable with that just a couple of months ago. We think that's a vote for the future! If you're comfortable paying out your profits, that says your future looks pretty good. 

A stat we came across recently shows 1.5 million businesses formed in the last quarter. That’s 80% quarter over quarter. That means that as we're coming out of this recession, businesses are getting started. People are looking for opportunities and they're doing it on a huge scale and that has to bode well for the economy next year, and just looking forward to it in general.

 

This week on the tipping point

Trying to pick individual stocks is like trying to pick the winner in a beauty contest. Your definition of beauty doesn't determine who the winner is. You may think that one candidate is better looking or more talented than another candidate but only the judges’ opinions matter. If you're going to pick the winner of a beauty contest you have to figure out what the judge's view of beauty is. Figuring out what the judges think is the same thing as picking stock in the market. It's not about picking good companies, it's about figuring out what the judges— the people that are buying stocks— want and what THEY consider good companies. And you know what, unless you can read people's minds, you might as well just go to the racetrack. Check out this awesome episode to hear more!

 

This week’s hidden facts of finance

US online holiday shopping is expected to grow 33% this year up $189 billion! Amazon plans to hire 100,000 temporary workers for the holidays. That’s a good reminder job growth follows economic growth. Amazon tripled their profits last quarter and based on their conference call, they expect the fourth quarter to be even bigger. It just goes to show, you can never discount the American consumer. The sun rises in the East—mom and American spend. Listen to the segment for more interesting facts!

 

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Market Change is No Respecter of Election Results— It’s Coming Regardless, Ep 12

Thursday Nov 05, 2020

Thursday Nov 05, 2020

Maybe it’s time to get into cash, wait this thing out, see what happens. Then when cooler heads prevail make some investment decisions later...what do you think?

By the time you listen to this, the election will have taken place but it may not be over. The volatility caused may still be lingering as well. We just hope you aren’t sitting around— in cash— waiting for the perfect time to get back in the game only to miss the biggest melt-up of the decade! We hope you’ve been listening as we’ve told you to stay in so you don’t miss the big move. It can happen in an instant and if you aren’t in when it comes you’ll never make it up! You have to keep the long term goal in sight. Join us this week as we talk about this and more and perhaps have a few (much needed) laughs along the way. 

You will want to hear this episode if you are interested in...

  • Have we been wrong all along? [0:46]
  • Where’s the bigger risk? [2:38]
  • Things people aren’t paying attention to [4:22]
  • Something we hear time & time again [6:22]
  • Investing in next year...today [8:06]
  • 5 days equals 30% of a 50 year period [9:26]
  • The Tipping Point: Now or Later? [10:11]
  • Have your people talk to...YOUR people [12:30]
  • To debt or not to debt [14:28]
  • Are you up to date? [15:56]
  • The perfect estate plan [18:05]
  • Hidden Facts of Finance [19:33]
  • We HAVE been here before and it led us to the roaring ’20s [21:27]

Sometimes you don’t see things you aren’t looking for

There are some things happening that aren’t getting attention. Everyone is really hot on the Teslas of the world but they aren't talking about things like small caps— which have started to do really well. There many things in different areas in the market that are improving and people aren't paying attention. A lot of people don't realize that China made a new high last week. The focus is on the S&P 500 and there’s a recovery happening around the world that’s being missed.

This week on the tipping point

When it comes to making decisions on your financial plan, sometimes it's more beneficial to defer action other times it's critical to address something right away. How do you know when to do what? In this episode, we discuss some different financial matters and decide if it's good or bad to put them off. 

One example. If you're saving in your retirement accounts— your 401ks or 403B's— you're putting money in pretax, so you are deferring taxes. The problem is eventually when you're 72 you have to start taking it out THEN it becomes what we call a ticking tax time bomb. Those required minimum distributions could potentially push you into a much higher bracket making it a very tax-inefficient portfolio. If you're a younger investor, you might want to look at that Roth 401k option where it's after-tax. The beauty in a Roth 401k, or some other Roth account, is that all that growth is tax-free later. Listen to the episode for more examples! 

This week’s hidden facts of finance

You’ve probably heard people voice concern about this pandemic because we've never in history had to deal with something like this. However, the fact is we have! We had the Spanish flu in 1918, 1919, & 1920, last checked— there's NO vaccine for the Spanish flu. How did our economy recover then? How did the world recover from the Spanish flu? We don't really know, but we do know it recovered, we know we have been here before. To top that off the 1918 Spanish flu was followed by the roaring ‘20s, one of the greatest economies in the history of the planet! Something to look forward to? We think so!

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Market Irony and Where You Don’t Want to be When the Melt Up Happens, Ep 11

Thursday Oct 29, 2020

Thursday Oct 29, 2020

It seems week after week it's the same story. A lot of uncertainty out there. Most Wall Street strategists have been negative and wary. Bob, Ryan, and Chris had been very bullish and the market continues to go higher. Bob, Ryan, and Chris continue to be right while strategists continue to be wrong. What's going on? 

There’s a fog of uncertainty that seems to be shadowed by the fact that earnings are starting to get strong. In truth, of the 10% of the S&P companies that recently reported their earnings, 86% topped the consensus expectations. Even though the analysts and the economist continue to be pessimistic we’ve had good economic numbers on a weekly basis and quarterly earnings are off to a phenomenal start. Listen to the episode for more info.

 

You will want to hear this episode if you are interested in...

  • The news in plain sight [0:35]
  • Is economic growth picking up? [2:04]
  • Elections affecting pullbacks in the market [3:49]
  • Reality... [5:03]
  • Something stocks love [5:54]
  • The irony of right now [7:02]
  • The Tipping Point [9:05]
  • Why we’ve never had a client hold a bond fund [12:52]
  • The best advice you can give anybody right now [13:53]
  • 900 times forward earnings! [15:54]
  • Hidden Facts of Finance [18:06]
  • Past performance doesn’t tell you what will happen going forward [19:53]

 

Don’t miss the melt-up because you were sitting in cash

The great irony right now is that you may think that by going to cash you're playing it safe, but in reality, what you're doing is risking a huge melt up to the upside. Because of low-interest rates and de-urbanization the housing and automobile markets are growing like crazy. We've been talking about this trend a lot. In New York City people are leaving and going to the suburbs. Then they need to buy a car, so car sales are up 50% in the last couple of months. So that part of the economy is already cooking. 

What if we start to travel again on top of that? It's almost like it's going to be the economy on steroids versus where we were in January pre-pandemic. We’re really scared to miss the upside here and investors should be too. You shouldn't be worried about another big sell-off, which could happen, but realistically we probably won't see one as we did in March. But what you want in on this year is a huge melt up to the upside. If you miss that move, if you miss that return, that's basically your next decade of move in stocks. If you want more on this topic and more check out this episode of Payne Points of Wealth!

This week on the tipping point

The best advice we can give right now is that the #1 thing you need to know— the only true hedge in any portfolio— isn't gold, it isn't buying puts, it isn't trading the market. It's owning high-quality bonds that have a fixed rate of interest and a maturity date. That’s the only hedge we’ve ever seen in 45 years that works, and it works every single time. You want to protect your principal owned bonds that have a fixed rate of return and maturity date and make sure they're high quality. And be sure you have someone who knows what they're doing to be certain that they're high quality! Listen to the tipping point segment for more great tips!

This week’s hidden facts of finance

The best performing stock’s past performance is 100% indicative of… past performance. It doesn't tell you what's going to happen going forward. When a stock goes up 100% it typically doesn't go up 100% the next year. At one point this year, before its stock tumbled, Nikola was worth more than Ford Motor’s $30 billion market capitalization. It now trades at 7.4 billion. The biggest difference between Nikola and Ford is that Ford actually has earnings. Just to remind everybody of the risk in the market, you could have purchased Nikola stock at 80 in June and it’s 20 today.

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

Read more

Projecting a Market Future Based on Personal Experience, Ep 10

Thursday Oct 22, 2020

Thursday Oct 22, 2020

The real loss in the market is when you succumb to your emotions. There are many markets and they are all affected by different situations. None of them ever drops to zero, even though that seems to be the driving fear behind so many decisions to get out instead of staying in for the long haul. Listen to this episode of Payne Points of Wealth to hear more on how to combat this fear and many more valuable tips. 

You will want to hear this episode if you are interested in...

  • Why the market doesn’t care what everyone else is worried about [1:22]
  • Secret indicators nobody knows about [3:08]
  • Things that aren’t being talked about [5:46]
  • Being smarter than your DNA [8:14]
  • The tipping point [10:10]
  • A picture that saves you 3000 words [13:30]
  • Fear of no control [17:55]
  • Hidden facts of Finance [19:50]
  • The death bell ringing at the movies [21:36]
  • The superpower that isn’t growing [22:12]
  • The second biggest total on record for the worst thing you can own [24:39]

 

Opportunity is calling… are you listening? 

We are all human beings and we project a future based on our own most recent experiences, on the other hand, the stock market never looks back. It’s always moving forward. Always pricing in what’s coming months and years down the road. The market tells you every day where the opportunity is. The question is… are you listening? Check out this episode for a wealth of tips on how to be a better listener!

This week on the tipping point

Should you have an exit strategy if things get bad? What if there is a sell-off between now and the end of the year? We think you have to be comfortable with a couple of laws we call protecting your portfolio against downturns. A big part of that is bear markets, it's not that uncommon and it's going to happen over time. Markets go down, but they also go up, it doesn't mean you have to get in or out. Overcome the fear that arises from negative news by not putting all of your money in one place— be diversified! 

You don't want to bet it all on one situation, you want to have an ALL situations portfolio. That way no matter what happens— whether the market goes up or down— you have something that can benefit or something that can protect you. Listen to the Tipping Point segment for the full story and the answers to the questions above.

This week’s hidden facts of finance

The outcome of the US election doesn't matter to most Chinese companies whose ownership and business operations are largely domestic. Over the last six months, we’ve heard “I don't want a Chinese company in my portfolio” or “I don't want a company that does business with China, in my portfolio” so we made a list of stocks they can own— there were none! 

If you have a portfolio of domestic companies and you own a great American company and the CEO gets up and says there are 1.4 billion potential customers for our product. But because you requested not to do business with China, we're not going to sell anything to those 1.4 billion customers, we're going to let our competition do it. I'll tell you what I'm doing that day. I'm selling that stock and buying the stock of the competition. Check out the segment for other random facts!

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

Read more

If You're Sitting in Cash Your Biggest Risk is the Cost of Opportunity, Ep 09

Thursday Oct 15, 2020

Thursday Oct 15, 2020

If You're Sitting in Cash Your Biggest Risk is the Cost of Opportunity, Ep 09

Politics still have things stirred up but the market seems to be handling it better than people are. Use this volatility as your ally because it seems like fear versus market action is disconnected right now. Just because YOU think the market is going to drop due to election results (whatever they may be) doesn’t mean it WILL. 

Never discount the American consumer's ability to spend money. It’s not smart to bet against it. What happens when we get a vaccine or when we get comfortable again? People start traveling, taking cruises, and flying again. The lockdown economy made a ton of money while everyone was in solitary confinement but what about the un-locked-down economy? It's about to boom again. No matter who's in office. Tune in to this week’s episode for the full scoop on this and more!

 

You will want to hear this episode if you are interested in...

  • News in plain sight: POTUS & FLOTUS’ covid effect on the market [0:39]
  • Your political bias and your portfolio [1:45]
  • Are things going to hell in a handbasket? [3:40]
  • What’s driving the economy? [5:03]
  • Will consumers start to spend again...did they ever stop? [7:24]
  • The Tipping Point [10:53]
  • Holding stock in the company that cuts your checks… is it a good idea? [15:52]
  • Hidden Facts of Finance [21:30]
  • Old school over new school in gains [28:06]

 

Appreciation isn’t the only return

A big thing that people miss in terms of a portfolio of investments is that the return comes not only from appreciation but also from income. When you have a portfolio of high-quality bonds— and you should ONLY own high-quality bonds— and you also have high-quality stocks in that portfolio, you're actually making money every day. People have these buy low and sell high ideas and that's garbage! Stay invested! A better way of looking at it is to get paid while you wait for your money to double. That's the way you should look at it. What it comes down to is your biggest risk is not the election, it's that person you look at in the mirror every day. It’s their political convictions that are getting in the way and stopping you from being a good unbiased investor. If you miss a big move up in stocks, you never get that return back and if you've already missed the summer melt-up, don't miss the next move up too! Stop sitting in cash, get in, and stay in!

This week on the tipping point

Vanguard released its annual report called How America Saves, with several interesting facts about the investment world. Studies showed that 78% of investors use target date funds in their 401k with 54% using only target date funds. Another interesting fact is that 74% of all Vanguard 401k plans offer a Roth option, but only 12% of participants in those plans had elected the Roth option. The last stat we want to mention is that in the 10 years between 2010 and 2020, the number of people holding company stock in their 401k dropped by 16%. What might be the reason for this? And would you consider it a positive trend? You’ll want to catch the episode to get our thoughts— good, bad, and the ugly— on these stats. 

This week’s hidden facts of finance

Ball Corporation recorded the lowest coupon ever for a junk bond with a maturity of five years at 2.8, seven 5% in August. The Double-B rated market, AKA junk bonds, is about 55% of the high yield bond market. As of the end of July, bond buyer beware. When you look at bonds and your portfolio, you want to have two things… you want to have a bond that comes due and you want to have a fixed coupon. Well, this bond does have a fixed coupon of 2.875%, but it may not come due. The problem with junk is that they can go out of business. They have a higher probability of failing. When you invest in bonds you want safety. Returning your money's important return of your money is paramount. Listen to the full segment to hear the rest of our hidden facts of finance! 

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Uncertainty Continues With Talk Of An Economic Stall And An Impending Second Wave, Ep #08

Thursday Oct 08, 2020

Thursday Oct 08, 2020

As headwinds continue to blow, uncertainty continues to be at heightened levels. What we're hearing and seeing is everyone feeling like the economy is starting to stall. That we've had a V-shape recovery and there's this consensus out there that maybe it's over. Top that with an impending second wave of the pandemic as the weather gets colder and the question we are getting over and over again is… Is it time to cash out before the election? Is the economic rebound finally over? Do you think that means that everybody's thinking the same thing at the same time? Could that also mean that the market may have already priced in all this news? Join us on this episode of Payne Points of Wealth to find out. 

>>>>>>>>>>>>>.PLAYER GOES HERE<<<<<<<<<<<<<<<<<<<<

You will want to hear this episode if you are interested in...

  • The housing market BOOM [2:45]
  • The second wave of the pandemic & a vaccine [4:59]
  • The market never goes down on the same news twice [5:41]
  • Your portfolio in a volatile time [7:04]
  • The tipping point: Strategy games [9:26]
  • Our experience with timing the market [10:41]
  • Money saved in taxes and a ROTH [13:22]
  • Playing stock roulette [16:26]
  • Hidden facts of finance [19:48]

Let’s give them something to talk about… housing!

What we think more people should be talking about is housing! Here we are in the middle of a recession and housing is booming. Let’s put that in perspective, Dow Jones U.S. Home Construction Index is up 120% since the March low and the S&P 500 is only up about 50%. Housing is clearly outperforming the market. It's soaring. Rates are ridiculously low, so much in fact that some people that would normally buy for cash are borrowing and making more in their portfolio than they are spending in interest. 

There are still parts of the economy that aren't doing well, like restaurants and hotels. But every job that you get in housing has big-time multiplier effects. Think about this… you buy a new home in the suburbs, then you go to a home improvement store, or you need a new appliance, or you put in new furniture, so there are many different parts of the economy affected by this positive multiplier. There are parts of the economy not only booming but having a multiplier effect that offsets a lot of the losses in other parts of the economy. 

The strategy game on this week’s tipping point

In our collective 70 years, we have probably have seen every financial strategy under the sun. What we know is some financial strategies work, some don't work at all, and some kinda work. You can relate it to different games like roulette, which is basically no skill at all, chess where it's all about skill, and poker where there are elements of both. No matter your strategy we can all agree that going to Atlantic City or Las Vegas and gambling a little can be fun. But when you're putting your entire future and your entire net worth in that gambling strategy it’s dangerous and can be detrimental to the long-term financial health of you and your family. Listen to this week’s tipping point to get our take on this strategy game. 

This week’s hidden facts of finance

Around 85% of our energy needs are currently satisfied by coal, oil, and natural gas. The energy sector might be in one of the best buying opportunities of our lifetime. 

Exports to the US amount to a mere 3% of Beijing's gross domestic product. We're still their biggest consumer at about 16.8% of total overall exports. That’s three times higher than their second-biggest receiver, which is Japan.

The average TV bought in North America now has a 50” display at a price of just $360. TV's are a notoriously low-margin consumer electronics business. 

China’s national railroad corporation unveiled plans to more than double the length of its high-speed railroad network— already the world’s longest— to more than 70,000 kilometers within 15 years. It will connect China's largest megacities. 

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Volatility & Uncertainty are your friends… dressed in a mask trying to scare you to death, Ep 07

Thursday Oct 01, 2020

Thursday Oct 01, 2020

Volatility & Uncertainty are your friends… dressed in a mask trying to scare you to death, Ep 07

The real story this week is that election uncertainty is upon us! You're hearing more and more news about how the election will affect the markets. Contributing factors causing volatility are the recent death of a supreme court justice, tension in the political realm, riots going on in different cities, all the while we are STILL in the middle of a pandemic. What else could go wrong here? The big question on many investor's minds this week is should I... Stay in cash? Get invested? If I am invested, is it time to go to cash and just wait for this thing to blow over? Listen to the episode to get our take on the answers to these questions! 



>>>>>>>>>>>>>.PLAYER GOES HERE<<<<<<<<<<<<<<<<<<<<

You will want to hear this episode if you are interested in...

  • Where is the worst place to be right now? [1:15]
  • When can you expect to get good prices? [4:02]
  • Betting on the reopening of the economy. [5:59]
  • What would Warren do? [6:43]
  • The tipping point: How to recover from recession missteps. [8:03]
  • Have you been ignoring your finances? [10:01]
  • What kind of fees can you lower in your portfolio? [11:38]
  • Getting your financial physical. [14:54]
  • Hidden facts of finance: Russian vaccines, dividend yields, & bonds, oh my! [16:25]



Uncertainty creates a great buying opportunity

You don't get good prices when there's a lot of certainty out there. When people are feeling good about the markets is when the markets are sky-high. It’s when people are jittery that you get those low prices. That’s when you get great discounts in the market, creating great buying opportunities. As the saying goes, you can't get good prices without bad news. And that's certainly what's happening right now. 

This is really the bane of the investors’ existence, having to embrace uncertainty in the market. Historically when things are the most uncertain you’ll find the best buying opportunity. Yet, we want to wait for clarity, for the sky to part, and the sun to come out so we feel good. Of course, that's always the worst time to invest because good news comes with bad prices. Take advantage of these dips because you don't get them that often. 

Recovering from recession missteps on this week’s tipping point

Today we will talk about some of the recession missteps made and how to recover from them. What do you have to do now to get back on track and back on your path to financial independence? We think one misstep people made was selling out of the market when it went down, and now they’re sitting in cash and have no reentry plan. What do you do next?

The way to look at that is there's not just one market. There are multiple markets around the world. So there's plenty of opportunities to get in at a low cost. The thing is you have to make the conscious decision to get back in and then stay in. The dilemma is when you get out at 100% you're making a bet. If you get all out then you need to make another 100% bet to get back in. And that's what we call all or none. And an all or none position is always a terrible place to be when you're an investor. Listen to the episode to hear how you should diversify when you are buying back in. 

Stock dividends are the place to be on this week’s hidden facts of finance 

The Russian vaccine called Sputnik 5 has only gone through phases one and two and it's been sent to Venezuela and Nicaragua for phase three trials on people who aren't Russians. That sounds safe! 

Talk about dividend yields! The common shares of ATT now yield almost 7%. That's amazing and about twice what the telecoms long term bonds pay. JPMorgan's developed market global government bond index currently yields 1.3%, but the longterm 44-year average is more like 6.4%. It seems that stock yields are better than bond yields these days. You wouldn't want to sit in cash getting 1% and it doesn't sound like developing market yields are much better. Stock dividends are the place to be.

See if you qualify for a complimentary financial review from the Paynes



Connect With Ryan, Bob, and Chris


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