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
Thursday Sep 24, 2020
Thursday Sep 24, 2020
In pandemonic times, zero-commission trading platforms have become the casino of Americans who are cooped up at home. Companies like Robinhood are offering zero-commission trading, making people less hesitant to trade. That combined with the fact that alcohol sales are up 14% since the beginning of COVID and a 92% increase in options trades this year leads us to think there may be a lot of people making some questionable trade decisions.
Sitting at home without the typical legal gambling outlets the stock market seems to have become the place where huge bets are being made by those looking to satisfy their gambling fix. At the casino, you put money on the table — that’s what buying a call option equates to — putting money on a table and hoping for a return. Options trading is challenging and not something the average investor should try to tackle on their own. Following trends isn’t investing it’s speculation. In a game of speculation, the house is more likely to win, so I guess our advice today would be don't drink and trade and stay out of the casino. Hopefully some good will come out of this though and people will start to understand investing and jump in for the long haul by buying individual stocks or index funds because that’s where the REAL money is made.
You will want to hear this episode if you are interested in...
- Drinking options...oh, wait we meant options trading. [0:39]
- Tech bubble talk. [3:01]
- “Paradigm shift” [4:25]
- A huge consequence of concentrating your money in one place. [5:08]
- Questions to ask yourself? [7:24]
- The tipping point: Investment hearsay. [9:00]
- When it comes to financial planning what’s best for you? [14:39]
- Hidden facts of finance: Retail blues. [18:37]
Tech bubble, same old same, or something different this time?
Let’s talk tech bubble... again...it’s prime time in the news when talking about financial markets and what we are hearing is that it is different this go around. That it’s not the same as the tech bubble of 99-2000 when there was this big proliferation of cheap online trading sites, doctors and lawyers were quitting day jobs to become day traders, and you had this belief that there was this new economy. But wait… doesn’t that sound a lot like 99-2000 after all?
When it comes down to it you have to ask yourself, is mean reversion still a thing, or are those lofty tech valuations eventually going to come back down to earth. You should also question whether or not you believe we're going to beat this virus? Is the economy going to reopen again? If it does are all those stocks that are benefiting from lockdown going to be great long-term buys. As the economy picks up and grows, as we go out, drive more, and fly more, as we go back to our normal routines how will that affect the market? What stocks are going to benefit from that? Or is this new normal going to last forever? If history has taught us anything it’s that nothing lasts forever.
Investment hearsay is this week’s tipping point
What’s the pain point that has the biggest impact on your wealth right now? When it comes to investing your money and financial planning, we think it’s “investment hearsay”. People love to give blanketed advice. Even if they have no credentials and no professional background. They feel like it's okay to give unsolicited investment and financial planning advice and it gets consumed like it's actual gospel. We think it's really dangerous. You get this advice from cocktail parties or maybe someone very confident about how they invest their money, and a lot of times it's just completely WRONG. Are you getting dangerous advice from unqualified people?
Retail blues on this week’s hidden facts of finance
This week’s hidden fact is all about “retail blues”. Twenty-four(24) retailers have filed for bankruptcy from Jan - July 16, 2020! That’s more in half of this year than all of 2019 combined. We are also looking at as many as 25k stores closing in 2020 vs 9832 in 2019. This has a great deal to do with the pandemic but it’s also due to online retail.
Zoom stock has zoomed up 465% in 2020 is now worth more than a hundred billion dollars. Peloton has a market cap of 25 billion after gaining 209% this year, as its stationary bikes replaced gym memberships. Netflix stock is up from $1 to a close of $500, adjusted for splits, since its debut less than two decades ago.
See if you qualify for a complimentary financial review from the Paynes
Resources & People Mentioned
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify
Thursday Sep 17, 2020
Thursday Sep 17, 2020
Over the past week, we’ve gotten calls from long-time clients who are asking us what sounds like a reasonable question: “Why are we not putting ALL my money in these growth stocks that keep going up?” As we said, it SOUNDS like a good plan, but it’s based on a wrong understanding of how the market works. When stocks are high — and most of the stocks in the current growth stocks are so high they are overvalued — you don’t want to buy them. Buy low and sell high is the motto of savvy investors.
Ryan likens the markets over these past two weeks to a massive casino. Traders have been basing their trades on the most recent happenings in the market — tech stocks that keep going up — so they try to ride that train even further. But this week, the train hit the brakes a bit. Is it the beginning of the end?
You will want to hear this episode if you are interested in...
- Finally, some tech sell-offs — and the question on everyone’s minds [0:33]
- The “smart money” is positioning in cheaper asset classes, not what’s hot [5:30]
- And the economy keeps getting better [7:55]
- Two fundamental things when it comes to income plans [10:26]
- Why your portfolio should be based on your goals and a diversified strategy [16:27]
- The random facts of finance that may shock you [18:03]
The tech bubble could be popping, or is it just a correction?
As we began to see sell-offs of tech stocks this past week, everyone began asking the question: "Is this it? Is the tech bubble about to burst?" We tend to think it’s the beginning of the end because stocks that go up when the sales of the company haven’t gone up are risky at best. The growth we’ve seen in these stocks is superficial, driven by speculation, not sound investment strategy. It’s only a matter of time before it’s over — and it looks like it could very well be over.
Economists are batting 1000 — and all wrong
We’ve all got that friend or relative who continually sees the glass half empty. There are lots of reasons some people see the world through a negative lens, but one thing Bob has always said is that many people think they sound smarter when they talk negatively or critically about things. Economists these days seem to be in that boat. All they can say about the economy is skeptical, but the reality is that we’re much better off than anyone predicted and it just keeps getting better.
In every dark cloud, there are silver linings and in the current situation, you can take advantage of what’s happening in the economy to profit from it. But you have to take your eyes off the glitzy, fancy-looking things out there and instead, look at the common sense things that are happening and invest in them. In this conversation, we chat about some of those and give tangible examples of how the smart money is going in this direction.
Your income plan needs to have clearly defined income streams
Do you even know the different types of income that fuel your lifestyle? There are likely more types of income than you think. First, and the one most of us think of, is wages or earned income. But there is also Social Security and pensions, rental income, annuities, and interest and dividends earned on stock holdings. You want to build your retirement portfolio for income because income is what will matter most to you during retirement.
But as you do so, do it in a diversified manner. You don’t want to overweight any one investment. That can bring on sudden losses that are devastating. What you need to keep in mind is that even when the market is down, interest and dividends don’t really change that much. That means interest and dividends can easily be the biggest part of your return, long term. The secret to investing is that if you own investments that pay income, and if you don’t spend that income, it gets reinvested to buy more shares for your portfolio. That is sustainable, dependable, repeatable income — and it’s smart. Listen to hear more about how you can make it happen.
Resources & People Mentioned
See if you qualify for a complimentary financial review from the Paynes
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify
Thursday Sep 10, 2020
Thursday Sep 10, 2020
We are beginning to sound like a broken record — you remember what a record is, don’t you? Again, we’re discussing the incredible sustained growth of tech stocks in the U.S. even though many of them, like Peloton and Tesla are not posting ANY profits. What’s going to happen with this tech bubble bursts? Are you putting yourself at risk?
And why are some people so afraid of the stock market? It’s one of the only investment vehicles that on average, always goes up. That may sound like an exaggeration but it’s not. Listen to this episode to find out why we can say that, what it means for smart investors, and how you can make sure that your investment strategy is proactive rather than reactive.
You will want to hear this episode if you are interested in...
- The mind-numbing tech stats (worth more than all of Europe) [0:38]
- Doing the simple math on the top five tech companies - does it make sense? [5:47]
- It’s a huge opportunity cost by NOT investing your money [10:20]
- We always think the country we are from is the best for investing [19:01]
- New York City has a 20% unemployment rate. Wow! [19:35]
- When insiders are buying, you don’t want to be on the outside, looking in [22:55]
Who will be left holding the bag when the soaring tech stocks take a dump?
As one example of the insanity happening with tech stocks right now, Tesla stock continues to go up — and what does Tesla do? They issue more stock. That only benefits Tesla, not retail investors who keep buying up their stock. There are lessons to be learned here friends, and some of it comes from looking at history. Back in 2007 the European stock market was worth four times the U.S. Tech sector. Today it’s just the opposite. So, why not buy European stocks now while U.S.tech is so high as an investment in the future?
The point is this: the tech stock bubble will not continue forever. Smart investors like Warren Buffett and Tim Cook (Apple’s CEO) know this. Warren is buying in Japan right now, as well as energy, and Bank of America Financial (all of which is being poo-pooed on the financial channels right now). Tim Cook just sold $130M worth stock in his own company, Apple (a tech company, by the way). What does that tell you? Would you sell your company’s stock if you were convinced the company would go up 1000-fold in the next few weeks? Diversification is a good play right now, to prepare for what’s coming.
Markets are like a pendulum, swinging between fear and greed
The reason people feel like the stock market is risky is that they’ve listened to too many horror stories about someone who lost their shirt in the market. But most people who tell that tale are guilty of buying a few favorites without keeping a balanced portfolio. Yes, tech is doing extremely well right now, and nobody can tell you the day and time the current tech bubble is going to burst. So should you ride it out, hoping for the best? Hope is not a good investment strategy. You need to be proactive rather than reactive when it comes to investing. Diversifying your money makes sense and it’s the strategy that’s hiding in plain sight during this tech insanity.
People will always do what’s in their best interest - until they become afraid
Because people always do what’s in their best interest, many are holding cash right now, waiting out the pandemic and the upcoming election before they decide what to do with their money. But that's unwise thinking. The reality is this: holding cash is MORE risky long-term than stock market investing. Here’s why: Inflation goes up by 3% every year, so you have to grow your money to keep up with what it costs you just to live. With the average Money Market account yielding 1%, you can see what’s happening if cash is your current strategy.
If you understand how the stock market works and keep a balanced portfolio, all you can do is win. The market may adjust from time to time, and when it does people become afraid, but your shares don’t disappear when the market goes down. You still own them. So should the market drop, and you keep your cash IN the market until it goes back up (and it will), you will reap the reward. Just know that the fact is that stocks have gone up over your entire lifetime, even though they pull back at times, and you can be at ease.
Resources & People Mentioned
See if you qualify for a complimentary financial review from the Paynes
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify
Thursday Sep 03, 2020
Thursday Sep 03, 2020
One of Bob’s favorite sayings is this: “History doesn’t repeat itself, but it sort of rhymes.” When it comes to financial trends and market behavior, it’s many times more true than most people realize. In this episode, we discuss the similarities today’s market has with the market conditions that existed back in 2009 — and what it could mean for the current big tech stock growth.
We also have a big treat for you, our first guest, Adam Johnson. Adam’s newsletter, “Bullseye Brief” is something all three of us subscribe to and read weekly. His insights into what’s happening in the market and how to best leverage it for growth are amazing. His portfolio is up 30% this year already. Stick around, this episode is definitely worth your time.
You will want to hear this episode if you are interested in...
THE NEWS IN PLAIN SIGHT
- Today’s bear market turned bull [2:01]
- Comparing earnings in 1999 to earnings numbers we see today [3:40]
OUR FIRST GUEST - Adam Johnson
- Adam’s view on the markets - we’re roughly where we should have been had COVID never happened [9:40]
- Why Adam doesn’t care for gold because he’s about ingenuity and growth [14:26]
- The base case on the S&P 500 from Adam’s point of view [16:26]
THE TIPPING POINT
- The rules of investing [18:43]
- Markets tend to return to the mean, over time [20:42]
THE HIDDEN FACTS OF FINANCE
- 6 million trading accounts have been opened recently [24:50]
- U.S. companies are very involved in China, even its stock market [26:01]
- Global eCommerce is still only between 22% and 25% of sales [29:01]
History doesn’t repeat itself, but it kind of rhymes
When looking at what’s happening in today’s markets, it’s eerily similar to the 2009-2010 time frame. At the peak of the dot com bubble at that time, tech stocks were 35% of actively traded stocks. Today, big tech is trading even higher at 37%. Today’s S&P 500 is trading at 26X this year’s forward earnings, which is exactly what it was trading at back in September of 2009. And back then, the NASDAQ traded at 35X forward earnings and is trading at that same pace today.
What’s the point? We just might want to consider what happened back then, after tech stock prices kept rising and rising. They didn’t stay high. They came tumbling down when the bubble burst. Are there lessons for today’s investors? Listen to hear how overvaluations and tech investing newbies may be leading investors to a similar downturn.
Those who don’t know history are destined to repeat it
Let’s take TESLA as an example of the craziness going on right now. Its stock is up 525% over the last 12 months and a Bank of America analyst just upgraded it. Chris just had a conversation with a client whose TESLA stock is up 80% but he’s hesitant to take the profits from it for fear it will go even higher and he'll miss out. What he’s failing to realize is that what’s happened to TESLA is not normal market behavior. When the tide goes the other way, it’s not pretty.
We can see that investor behavior really hasn’t changed much over the years or through the generations. Millennials are still trading stocks that are up rather than doing the due diligence needed to make wise, long-term investments. It’s not as alluring to buy low because those stocks are not the darlings everybody is talking about. But it’s typically one of the wisest choices to make long-term.
If not big tech stocks, then what?
Like tech stocks that keep going up (and feel like they will never go down again), the current trends won’t continue to rise. For that reason, we want to be thinking about the next 10 years, not just about today’s trends. Our guest on this episode, Adam Johnson makes it his stock and trade to find the places to put his money that will accomplish growth long term.
Currently, Adam’s investing in Biotech, Medtech, and Energy — and he has NO money in the big tech companies. What’s his result been? Admittedly, when COVID first hit, his portfolio was down 30% almost immediately, but it’s recovered completely and appears to be growing even more.
Adam also believes that because the demand for oil hasn’t disappeared, coupled with the fact that it takes a very long time to jump-start oil production, we’re set for a recovery in the oil sector. He believes the equilibrium (where oil companies can both make money and can afford to invest in new wells) is somewhere in the $50 per barrel range, so there’s still plenty of room for growth if he’s right. Listen to hear Adam’s insights and to rethink your investing strategy.
Resources & People Mentioned
See if you qualify for a complimentary financial review from the Paynes
- The Jesse Livermore book mentioned by Ryan
- Adam Johnson, founder of Bullseye Brief (get your 45 day trial)
- Cheniere Energy - one of Adam’s current favorites
- Energy Transfer - another of Adam’s current favorites
- RobinHood Trading Platform
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify
Thursday Aug 27, 2020
Thursday Aug 27, 2020
The stock market continues to rise in spite of the dire predictions we’re hearing from analysts and pundits. What’s that all about? As you might expect, we’ve got some ideas about what is going on and you may be surprised to hear that we tend to think the market is right and the pundits are wrong.
Listen to hear why we think so and what we believe is going to happen with Big Tech companies. And... in our “Tipping Point” segment we address one of the biggest issues we see coming through our planning practice: Retirement Planning and the MYTHS that fuel mistakes. Don’t miss it!
You will want to hear this episode if you are interested in...
THE NEWS IN PLAIN SITE:
- The disconnect between the market and the economy [0:33]
- The big tech bubble and why it can’t last [5:47]
THE TIPPING POINT:
- Five questions you must answer when building your financial plan [8:57]
- Taxes are a huge issue to consider as well [14:29]
THE HIDDEN FACTS OF FINANCE
- The five largest companies in the index make up 23% of the entire index [18:10]
- Is buy and hold stock investing dead? [19:08]
- Is gold and silver overpriced? [20:29]
As the market continues to skyrocket, many pundits are scratching their heads
As Chris points out, sometimes it feels like there would be no news if there wasn’t bad news. But that statement is NOT taking into account this fact, which is not being talked about: 84% of companies have beat analyst expectations by 22%. That’s the story of this market - everyone has been negative about the economic outlook and meanwhile the market continues to prove them dead wrong. One example from this episode:
A double-dip recovery pattern was predicted. It hasn’t happened. Instead, we’ve experienced a a “V-shaped” recovery of consistent growth. How can Wall Street get it so wrong? There are many reasons for such misguided notions, and it’s what we address on this episode.
Is the market missing something? Nope. It’s investors who are missing out
We keep hearing that the market is missing something, but it’s not. The market is doing what the market is supposed to do. It’s looking toward the future and has been very accurate so far. It’s Investors who are missing out on great opportunities provided by the current market.
Why? Because they are worried. This whole COVID thing has everybody concerned that the market is unstable and that investing is risky right now. Pile on top of that an upcoming election and you can understand why Investors are leary. But here’s the thing, worry isn’t a good strategy. Holding onto your cash isn’t either. There are many places to put your money that will include income with growth — and I’m not talking about big tech companies.
Join us for this episode. You’ll hear our opinions about how to take advantage of the market conditions we’re experiencing right now.
The 80% retirement income myth is hurting lots of people
You’ve likely heard it said that you can plan on needing about 80% of what you currently spend each month to support your retirement years. From years of running a financial planning firm we can tell you that is simply not true. When you have more time on your hands, which you do during retirement, you tend to spend more money. The fact is that you’re going to need MORE money to live on during retirement, not less.
Let’s look at a handful of the reasons we can say that so confidently.
- The average life expectancy is going up - that means you may have more years to fund with your retirement savings
- Health care costs are going up and retirees tend to spend more on healthcare
- And there’s the reality of taxes. You can count on about 30% of your portfolio going to taxes in the end. OUCH!
- The cost of living will double every 20 years, so that’s a problem when you base what you need in the future on what you’re making now.
So the question you need to answer is this: “Where is that amount of income going to come from?” Said another way, “How do you make decisions about what goes into and what goes out of your portfolio?” Listen to hear how we suggest you figure out how you’re going to fill the income gap.
Resources & People Mentioned
See if you qualify for a complimentary financial review from the Paynes
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify
Tuesday Aug 18, 2020
Tuesday Aug 18, 2020
Wow! The economy is doing some crazy things here as we hopefully wrap up this thing we’re all calling COVID. We’ve got big tech stocks like Amazon and Facebook continuing to rise in value, with no shortage of people still wanting to buy them. At the same time, the dollar is falling, which presents interesting opportunities of a different sort.
This episode of Payne Points of Wealth features our thoughts as fiduciary advisors — from a three-generation perspective — about these issues and more. We’ve got a variety of perspectives for you to consider, so be sure you take the time to listen.
You will want to hear this episode if you are interested in...
- The current growth of big tech [0:33]
- How creative destruction might change the game [3:20]
- Opportunities related to the weakening U.S. Dollar [7:05]
- How to get the best advice from your financial advisor (and how to choose one) [8:30]
- The hidden facts of finance going on behind the scene [14:26]
Big tech: Wow… are you comfortable with prices at these levels?
Bob says he’s getting a nose bleed from the heights the big tech stocks are reaching… and it makes sense on one level. Even 70 to 80-year-olds who have never bought anything online are now buying everything online because of COVID. As a result, you guessed it, the big tech companies behind those purchases are making bank and their stocks continue to rise.
But can it go on forever? Facebook already has 40% of the world’s population using its products (Facebook, Instagram, Whatsapp), so how much more upward room is there? While Bob thinks that leaves 60% of the world as a market for them to go after, Ryan isn’t so sure that’s how to look at it. How about you? Are you buying tech stocks right now? If so, what happened to the old maxim, “Buy low, sell high?” Take the time to listen to this episode and you might find a new perspective to inform your investment decisions.
Tech stocks are doing great. But should you buy them?
One of the things we’ve seen happen as a result of the “stay at home” orders that have been enforced worldwide is the growth of minor tech companies that are taking on the tech giants. TikTok is a great example. This “creative destruction” taking place is going to present all kinds of opportunities for investors that are unrelated to the typical big-name tech companies.
But be careful. What’s trendy and popular isn’t always the best bet long term. You need the right data to make the right investing decisions because your goal should not be to buy what’s popular right now, your goal is to buy what’s going to be popular tomorrow. That requires insight that you may not have. Listen to our conversation to hear how we’d advise that you approach the issue, and learn how you can get your own complimentary financial review from Payne Capital Management.
Who should you choose to help you make investment decisions?
One of the most frequent questions we get here at Payne Capital Management has to do with choosing an investment advisor. How do you make the choice wisely? There are lots of titles and terms out there financial professionals use to describe themselves — wealth managers, advisors, Certified Financial Analysts, fiduciaries — how do you know which is the best fit for you?
Let’s start with where you’re at right now. Who is advising you about your investment decisions today? Is it someone you can trust to have your best interests in mind or someone who’s just out to make a buck off of you? Don’t misunderstand, there’s nothing wrong with financial advisors being paid for what they do, but you need to be careful about who you choose to guide your financial decisions. During the second segment of the show today, listen to our discussion about the different types of advisors and how to go about choosing the right one. Do you need an architect or a builder? The answer might surprise you.
Resources & People Mentioned
- Get your complementary financial review from the Paynes - www.PayneCM.com/FinancialPlan
Connect With Ryan, Bob, and Chris
- http://PayneCM.com
- Follow on Twitter
- Follow on Facebook
- Follow on LinkedIn
- Subscribe on YouTube
- Follow on Instagram
Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify