So rates have been higher for longer. We have these rates that are kind
of kicking everybody's butt right now when it comes to commercial real estate, consumer
debt, like all of that type of stuff. And so even the FED
would have been like or cutting a quarter point today. Okay, so then
your credit card went from twenty nine point nine to nine to twenty nine point
seventy four. Right, It's not going to make a huge dedicate impact on
anything. But what it could do is it could say, hey, like
we understand the lag effects are kicking in. Let's slow them down before they
break everything. You were listening to, Carrie. Let'sa's financial survival Network where
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Financial Survivalnetwork dot com and get your free newsletter and gift. Financial Survival Network
now more than ever. And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Well, we got the
news today. The inflation is down. How convenient? And if inflation's down,
then how far off can rate cuts be? Well, our good friend,
Eddie Gifford is here to explain. Eddie, it's great to have you
back on. So when's the rate cuts coming? Well, not today,
we just found that out. You know, I was is that has been
coming in. We're starting to notice that it really looks like the lag effects
of the higher rates combined with the high inflation is really starting to make things
crack, maybe even crumble a little bit. So you know, if I
was Powell, I probably would have cut a quarter point today, but that's
not what happened. So, as you mentioned earlier, CPI still slowing right,
not going down, but still slowing, and we got beat today where
I actually came in lower than expected, so the market was super happy about
that. FED held rate steady and then but then you know they they basically
said that they're only projecting one cut this year. So it's a It's very
strange because for God like me that talks to main street USA every day and
sees people that are challenged right now, that doesn't seem to be the picture
that they're painting for us. Uh huh. So you know, I guess
what choice does he have? Figures to the elections probably cooked already. Nothing
you can do there, so might as well just do what's right for the
country or do what's wrong for the country. Well, I think if we
look back throughout history, but the FED has never got it right. And
you know, generally speaking, what happens is they wait too long to cut
and so by the time they cut, things break and crumble. And the
reason they're cutting is because something broke. And you know what we're we've been
seeing it for a while. We've seeing we've seen utilities outperforming, although they've
pulled back a little bit. We've seen gold outperforming. We're starting to see
treasuries outperform again. We're starting to see all these like flickering risk off signals.
But of course, you know, everybody keeps telling me, no,
the sign is different, it's time, it is different. And then in
two years we're going to look back and be like, oh my gosh,
all the signs were there. Why didn't why didn't anyone do anything? What
was going on? So it just feels like we're barking up that same tree
that we're always barking up, and consumer's going to end up being the one
who gets hurt by it. Mm hmm, Well do you think that rate
said the cure for all that all that ails us here, No, because
that there's already been I mean, think about it. So rates have been
higher for longer. We have these these rates that are kind of kicking everybody's
butt right now when it comes to commercial real estate, consumer debt, like
all of that type of stuff. And so even the FED would have been
like or cutting a quarter point today. Okay, so now your credit card
went from twenty nine point nine to nine to twenty nine point seventy four.
Right, it's not going to make a huge dedicate impact on anything. But
but what it could do is it could say, hey, like, we
understand the lag effects are kicking in. Let's slow them down before they break
everything. And that's just not what's happening that. You know, the the
problem with being like overlay data and as you get up in this situation where
the data has to show that things are bad or you know, abysmally bad
before you do anything, well, by the time that happens, it's too
late to cut. It's too late to do these things. So I think
that they've already waited too long. And you know, obviously the fear is
the inflation factor we're seeing that slow. It's still not you know, heading
down to two anytime soon. But you know, we can get it down
to two or one or zo would be a delation ravent where everything pops and
we see this significant correction in the stock markets and we're prime. I mean,
it's easy to look at it and say, hey, this is a
bubble. It feels like a bubble, and you know, but how much
further can inflate? Your guess is good as mine. But when it pops
can to be ugly. Hey, when it pops, it's gonna pop puff.
So so you're sticking to the thesis gold, you know, silver bitcollin.
What about other commodities here? Yeah, I mean we're sticking to the
adage of rules based quantitative type strategies and making sure that your your portfolio is
truly diversified. So everyone has like one hundred stocks, they think they're diversified,
you're not. Every single stocks moves in the same direction. Everything is
correlated. Like everyone thinks that, oh, we have stops and bonds.
Well, except for inflationary times, bonds correlate with equities, and so you've
got to have something that maybe has some type of ruleset, rules base that
helps you lean in or lean out of a trend, depending on what the
trend is. And you got to have this stuff like the commodities and the
precious metals and even the cryptocurrencies now as they've offered, you know, a
uncorrelated return. You know, we don't necessarily want inversely correlated, because all
that means is that one side goes up by ten percent, the other side
goes down by ken percent. Well, we just earned zero, right,
we went unincorrelated. We want everything to make money over a long term cycle,
but we wanted to make money at different times. And that's what that's
what a real portfolio looks like. And unfortunately I don't see many portfolios that
look like that nowadays. As somebody once told me, the trend is your
friend until the end. Yes, it's one of those things where the market's
going to do what it's going to do until it doesn't, and you have
to have a rule or some type of exit in place, because especially if
you're near retirement, Like, yeah, a lot of people I've been meeting
with recently like they've won the game, and yet there's still risk one and
they're skipping over the preservation part of their timeline prior to the distribution stage of
their retirement plan. And you know, it's one of those things where you
got to you got to pay attention to what your own plan is and you've
got to make adjustments is necessary. If you only need a six percent rate
to return to retire based on the uturient asset level, why are you taking
ten percent risk? All it takes is one moment, and if that portfolio
gets cut in half, you're working for another ten years. Now that portfolio
goes up by another twenty percent, it probably doesn't change your plane at all.
You're still going to live the way you're going to live. But if
that port realily goes down like fifty percent, your plan just got blown up.
And it's interesting to see that people don't think like that or even just
understand or realize the risk that's associated with the sequence of returns is they're looking
to, you know, transition into the next days of their life. So
how do you measure risk by the way? What's the accepted way and do
you have any different approach to it? Well, of course Wall Street will
tell you at standard deviation, but all set of deviation is is volatility and
just because something is more volatile, it could be volatile and moving downward,
and something that's more that's that's more volatile, could actually be more conservative if
the drawdowns are less. So we pay, we pay very very close attention
to portfolio max draw down. And then you know, we're looking more at
Sortino than Sharp because I've never had a client mad at me for volatility to
the m side. You know, volatility, it's it's so crazy. It
accidentally made like they're not mad at me about that. You know, obviously,
volatility to this downside, that's the thing that people are concerned about.
And so max draw down in s Chertino helps us identify, hey, is
this a good portfolio and can this work to our advantage? Shrap is nice,
but the sharp stuff takes into account that downside volatility, and I'm sorry,
it takes into account that upside volatility. And we like upside volatility.
I don't know anyone who doesn't like upside lolatility. We don't like the down
next. Sometimes you got to take the good with the bad, though,
right well, I mean that just depends on your role set and whether or
not you have an actual diversified portfolio. You know, wallst you would tell
you, yes, if you want to get above average returns, you got
to take above average risk. I would say, the trend is your friend.
Lean in when it's good and have access in place, and when the
trend is down, don't ride the roller coaster down to the bottom. There's
other stuff that does well in that scenario, and your rule should be able
to find, or your quant should be able to find where the opportunities are
in that situation. All right, So when we talk again next month thirty
you think we'll be looking at a rate cut. It was surprising me if
we'll see a rate cut in July. I was. I mean, I
would have said that a rate cut today is justify. I don't think they
do anything in September, mainly just because they don't want to mess anything up
from an election standpoint. If it were me, you know, based on
what the data I'm seeing so far, if it continues in the same trajectory,
I would probably recommend cuts like at every meeting for the rest of the
year. But the Fed's not me, and then they're looking at what they're
looking at, and I think that they're too late to the party. I
just hope that the bubble's not so big that when it bursts, there's there's
you know, too much blood in the streets. Too much, too much
is you would basically need boots to pretty much way through it, all right,
boots? I mean I don't know like that as much. We've had
fifteen years of zero percent interest rates. I might even argue you might need
a boat with a paddle because it could get real bad. They made a
bigger boat. Huh, yes, yes, little scary. I hope I'm
wrong. I hope I'm wrong. Carry, But there was al stuff there.
You know, the bigger the bubble get, the worst it is when
it pops. So there are ways to make moneys off those scenarios. But
it's not buy and hold, that's for sure. All right. Well,
Eddie, appreciate you coming on. Just tell us how we connect with you
these days. The best place to find you in all Yeah, the easiest
thing to do. I go to Eddie or sorry, go to Detectivewealth dot
com backslash Eddie dash Gifford that's Eddie with a Y G I F F R
D, or going to that old friendly Google type of Eddie Gifford. Eddie
was a y Gifford and they'll probably see this interview on there tomorrow, all
right, a bunch of other stuff too, so you know, we're here
to help. It's a training time and there's a lot of people concerned and
that's what we're here for. That's what we'd like to hear. Eddie.
Appreciate you coming on. He got question. I'm for Eddie myself. Shoot
me an email kl at Carrie LUTs dot com. A link to Eddie's site
will be found in the show outs to this interview on Financial Survival Network dot
com. While you're there, please subscribe to our newsletter. Eddie. Always
a pleasure. We'll talk to you again real soon. Thanks again, Carrie,
Thanks for listening to Carrie Letz's Financial Survival Network, your solution to today's
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