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

Does Financial History Repeat Itself? Maybe. Ep #3

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

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
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The Market Disconnect, Retirement Myths, Taxes and More Taxes, Ep #2

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.

  1. The average life expectancy is going up - that means you may have more years to fund with your retirement savings
  2. Health care costs are going up and retirees tend to spend more on healthcare
  3. And there’s the reality of taxes. You can count on about 30% of your portfolio going to taxes in the end. OUCH!
  4. 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

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

Read more

Big Tech Going Through The Roof, The Dollar Falling, and a Rising Market, Ep #1

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

 

Connect With Ryan, Bob, and Chris

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

Read more

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