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Welcome you are listening to watching the Financial Survival Network. I'm your host,
Carrie Letts. CPI number comes out today. Oh it looks so good if
you could only believe it just five point one percent or year over year.
But what aren't they telling you? What do you need to know? Eddie
Gifford is with us now frequent guest to the show. Eddie, welcome back.
So you must be encouraged by the CPI report today. Very thanks for
having me. Yeah, I think that I don't know if I'm encouraged from
the standpoint that you know, we're basically just staying right in alignment with expectations.
The good thing is is that like we're not off on the wrong side
of things. So I think what it does is it gives us more clarification
that the Fed's going to come with one more great hike unless something weird happens
over the next two weeks, of course, and that's going to be kind
of you know, the slow and steady race that they're trying to fight.
Of Course, there's a lot of stuff that can happen. There's some signs
that a couple of things might have broken. We look at last month as
a proxy, so I'm interested to see how everything goes. But I'm still
not convinced that we're out of the woods yet. Not out of the woods
yet. I'm not convinced either. These inflationary friends tend to take ten to
twenty years. They don't just go away after a year. And what everything
the FED told us has been wrong? Transitory inflation? It's transitory. Well,
everything in life is transitory when you get down to it. Why should
you believe them over this, Well, I think it's one of those things
where you kind of can't. Right, if we go all the way back
to the seventies, the way that they calculated CPI compared today is completely different,
and in fact, like some experts have said that if they used the
same methods they used back then, our inflation numbers would be double what they
are today. And I think that, you know, when I talk to
clients on a daily basis, I feel like that's where they're at. And
the other thing that people don't remember or don't realize is that, you know,
even if you know we are five today, and even if a year
from now inflations three or even two for that matter, all this stuff just
stacks on top of each other. Right, So it was ten percent,
and then it was another five percent on top of that, and it's another
three percent on top of that, and there's another two percent on top of
that. Well, you look like ty three to four year time period,
and we're talking about the monthly outlay being thirty or forty percent higher because of
that stack in effect, and there's only so much we can take as consumers
before we start to break down. And you know, the increase in interstrates
doesn't help. It doesn't help at all. And in fact, the reason
that they're trying to increase rates is because they are trying to break something.
The easiest way to take demand out of the market is to break something so
that everybody just fleas and doesn't buy anything anymore. And so it's it's definitely
hard to be like, oh, yeah, they have it right this time.
I don't think the FED has ever actually had anything right. I think
there's a good chance that they've already overtightened, and so you know, the
question is is just when is that thing going to break and what is it
going to be. I don't know, but I think that a lot of
people have like this uneasy feeling, and I don't think they're wrong, right,
I mean, yeah, obviously, look at the regional banks. They
broke them, right, Yes, definitely, the regional banks are kind of
like the first and the thing that that whole situation is over, I think
is very naive. The reality is is that every single bank, big or
small, does have a lot of these long dated treasuries on the books.
Their balance sheets are going to look very very bad this year. And you
know, the reality is is that but before a couple of weeks ago where
they got backstopped, there was a lot more risk, of course, but
the things are kind of breaking down, and I don't know if it's going
to be a big bank that goes under. I don't know if they're what's
going to happen, but it feels like there's another credit event looming. It
could be the fact that everybody refuses the slowdown unspending, and so they're do
the whole buy now, pay later thing for everything. So the stating effect
continues. It's just at what point does it hit that hit and just like
burst. And unfortunately, the thing that always happens with these things is that
it's the one thing we weren't thinking about or weren't talking about. And I
don't know what it is, but it's it's hard to be like, oh,
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The information you need to drop now more than ever. Well, when
we're looking at portfolios in general, portfolio construction is huge, and so you
know that the whole like diversification thing, but actually be truly diversified. You
own own stuff like bonds, own stuff like gold, own the precious metals.
There are probably some cryptocurrency like bitcoin in there too, and then have
an exit strategy for everything that you're actually buying, right, it doesn't just
just buying it itself and then forgetting about it. I mean, technically that's
a strategy. Technically that's a plan, but you should have an exit strategy.
You should have like I'm going to buy this because of this reason,
but I'm gonna say it when it hits this because I'm going to cut my
losses, or I'm going to take money off the table when it hits this
because I'm going to take some profits. So I think having an actual investment
plan with several different types of investments in it is important. I think that
there's you know, there's there's merit, but there's also danger to the idea
of, well, I'm just gonna put all my money in treasuries because I
can earn four and a half five percent. The problem is is that when
does the money go back in? Right? What if what if this melt
up that we've seen so far since October of last year, go spend another
one hundred percent before it pops, because that could definitely happen. And you
know, and and I mean, if we're sitting on the sideline earning five
like, maybe we're comfortable there. I mean at the day, it just
comes down to whether or not the client is comfortable or the person is comfortable.
But at the same time, if you're missing out on a thirty forty
fifty percent increase on the other side, that can really beat you up emotionally
and psychologically as well. Right, So I think the versification having an exit
strategy. But any money that you need in the next six, twelve,
eighteen months, don't take risk with it. There's just really too many unknown
factors out there. I couldn't agree with you more. And so caution is
the buy word. Don't buy and hold, but don't buy and fold either,
right exactly. I mean you have to have you either need to work
in with an advisor that has a rule set of this is what we buy,
this is when we buy it, this is when we get out,
And so we're taking the emotion out of things. The may invaritate, the
more evolved how that things get, The more emotional people get, and the
more they're likely to act on something that maybe they wouldn't have acted on if
they were just like looking at it or zooming out before making that move.
So I think that you know, definitely having a plan of not only like,
oh, what's my long term financial plan? How do I hit my
retirement? What do I do for my savings goals and that type of stuff,
but actually have like, hey, when I buy this, if it
goes down ten percent, I'm going to get out, right, if it
goes up fifteen percent, I'm going to take some money off the table.
I mean, I'm a Vegas boy. I'm from Las Vegas. So I
know that any successful gambler out there has their set of rules and they follow
them right and I think that the same thing holds true an investment land right
now. We got to have rules, we got to follow them, and
we got to stay away from all the emotional distress that can happen because we
could be up fifteen percent next month and we could also be down thirty percent
next month. That's just the kind of market that we're in. Exactly.
Couldn't agree more. Well, we appreciate you're coming on as always, Eddie,
tell us where we find you on the web, how we connect with
you. So obviously one of the easiest ways to go to that thing called
Google and type in Eddie Gifford. That's Eddie with a Y Gifford GI f
O r D. But the website is cactivewealth dot com backslash Eddie Gifford.
That's the easiest way to kind of like get out there and kind of do
like your own research on me and then see where I've been and learn a
little bit more about my story. But I'm excited to talk to anyone who
while wants to just get a different perspective or maybe a different opinion on things,
since everyone really seems to be the same. Well, you know what
they say about opinions. But in any event, if you've got a question
for Eddie, shoot us an email or myself for that matter, k l
at Kerry Lutz dot com. Make sure you go over to the site Financial
Survival Network dot com and you'll find a link to Eddie's site in the show
notes. Just click it and you'll get there and sign up for your free
newsletter while you're at it. Eddie a pleasure, Thanks for stopping by.
Thank you for having me Kerry, as I always have a great day.
Thanks for listening to carry Lutz's Financial Survival Network, your solution to today's trying
times. For the latest, go to Financial Survival Network dot com. Financial
Survival Network now more than ever,