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My philosopher the mark is and in
general is I try not to overly time

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it. I tend to believe in
more of a core satellite approach to investising.

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So for those folks that don't understand
the lego, essentially that means that

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you pick your core holdings. So
you are listening to Carrie Lutz's Financial Survival

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Network where you get valuable information you
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today's trying times. You need the
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Go to Financial Survivalnetwork dot com and
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Survival Network now more than ever.
Welcome you are listening to and watching the

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Financial Survival Network. I'm your host, Carrie Letz. Well, we got

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with us today, Derek Mazaria.
Derek, you're a dedicated certified financial advisor

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and author and well, seems like
a turning point in your life was two

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thousand and eight the financial crisis.
Tell us what happened then? What did

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that? How did that change you? Sure? Well, so back in

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two thousand and I was actually my
first job out of college is working with

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with AFLAC selling them something metal insurance
and a lot of that is done through

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the employer. So in two thousand
and eight, I was actually still struggling,

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not doing well, and I lost
about a third of my book of

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clients because most of them got laid
off. So that really shaped a lot

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of what I looked about today.
And in two thousand and early two thousand

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and nine I actually decided to jump
in and become a financial advisor because someone

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I was na working with thought we
might be a good fit, and I

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started working as a financial advisor basically
ever since then. All right, so

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what's your philosophy of the markets.
My philosopher the markets and in general is

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I tried not to overly time it. I tend to believe it more of

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a core satellite approach to investising.
So for those folks that don't understand the

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lego, essentially that means that you
pick your core holdings, so though for

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most people it's going to be something
like the SAB five hundred, and then

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you lend kind of a mix of
other asset class around it, things like

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small cap and you know, virging
markets and overseas accounts, and then you

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make small tweaks and shifts based on
essentially what your financial goals are, so

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you can make some small tweaks around
the edges. You know, I'm big

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on analogy to carry, So how
of the analogy I typically use is set

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the house up, design it,
then maybe rearrange the furniture and change the

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drapes, but don't really you know, redo the kitchen, okay, And

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how's that working for your clients?
You know, I think it works out

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really well. I think one of
the things that it really helps solve is

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a behavioral issue that we run into
a lot with with markets, because in

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the short term they can be incredibly
violatile, and I mean this year is

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probably a great example of that.
You know, the beginning of the year

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ripped, and then since July we
really had a really big come down from

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then, and we had an over
ten percent drop from July on and then

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we were one of the best Novembers
we've ever had. So, you know,

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people are overly emotional with their investing. There was multiple points where they

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would have gotten out of the market
and not stated all right, So looking

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ahead here, we've had quite a
rally atiot theories as to why I think

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a couple leagues I think the market
in some level what was a little over

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sold. I think one of the
things we look at when you look at

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what happened the beginning of the year, at least the first half, was

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a lot of that was really driven
by seven companies, so a lot of

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it allowed the other companies to catch
up, you know. I think the

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good news we've seen the inflation numbers
start to trickle down from the high nine

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point one percent, so that's positively
impacting the market returns there. Earnings were

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above average. I don't think they
were excellent. I don't think there are

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anything to write home about, but
coming from a few quarters ago when we

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had negative earnings, I feel like
we're on at least a better path than

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we were. You know, a
lot of companies in twenty twenty two were

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we're trimming the fat, so to
speak, so they're doing some layoffs.

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A lot of them have locked in
debt that's fairly low interest rates. They

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lodged in a bulk of money back
in twenty twenty twenty one, so I

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think for those reasons, we saw
a bunch of the pullback. Plus the

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treasury rates started to drop a little
bit as well, so the idea that

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hey, there's money elsewhere that's cheaper
or that's lower risk, that is going

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to get a good return, it's
starting to drop too. So I think

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when you look at all those factors, that's probably why the market started to

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rebalance a rally a little bit in
November. All right, So you think

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it can keep going, Well,
that's that's the magic question, Kerry.

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So I think in general, yeah, well, i'd imagine it's probably gonna

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meander for a bit. If I
had a guess, I think the rally

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was pretty sharp and quick, so
that doesn't necessarily mean it's going to keep

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going up. And you know,
I think when you look at the economy

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as a whole, you could probably
point to a few things where there are

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some risk points. You know,
if unemployment starts to creep up at a

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faster rate than expected, that can
impact the market. If the Fed says,

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you know, unequivocally, we're actually
going to keep rates higher than people

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think, because I think the market
right now is pricing in a March or

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April drop in rates, So we'll
see if that happens. If that goes

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sideways, then we'll never know,
you know. So those those a few

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of the things I look out for
I think the other kind of big thing

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to look out for is the amount
of debt we have as a country.

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That's thing that probably not enough people
are talking about. So looking at how

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is that going to impact spending in
the future, that's definitely something to keep

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an eye on for sure. All
Right, So, yeah, the debt

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is definitely out of control. Spending
is out of control. Doesn't appear that

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anybody wants to do anything about it, does it. No, I'd agree

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with that, and I think that
you can you can talk both sides about

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that one, because I think if
they're really serious about it, they really

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look at what they're over spending money
out and in different ways to the cut

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costs. I mean, that's that's
one of my jobs in general with individual

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folks is how do you how do
you look at what's what's working, what's

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not working, and how do you
make it changes. It doesn't seem like

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they're really interested in making any changes
on you know, either side, especially

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with the mixed Congress. I mean, good luck at actually anything done.

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So that's gonna be other challenge in
terms of getting a budget in order.

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In general, leave this for the
short term, Yeah, so eventually something's

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got to give, right, I
would say, so. I mean,

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one of the things I've been talking
to a lot with clients in terms of

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preparing them is the Tax Cuts of
Jobs Act is going to expire in twenty

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twenty six. So that means a
number of people are going to have increased

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taxes come twenty twenty six. So
I'd imagine if the debt's still really high

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and the spending is still high and
I haven't done much with it, one

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of the only only levers they can
pull is getting more revenue in the door

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daily. Way that the government really
does that is taxes. So if they

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say, look, we're just going
to let this sunset and not you know,

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reset the tax rates to wherever they
are today and let that increase happen,

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then that's one way it can impact
potentially your listeners in terms of,

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you know, maybe reducing their ability
to spend because they are paying more taxes.

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All right, Well, maybe maybe
something will happen and we'll all be

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surprised, Right, that's a possibility
for sure. All Right, Hey,

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so looking forward to the new year, with all this uncertainty, where do

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you put your money? Well,
honestly, Kerry, for me, that

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that depends on where you are.
It's really hard to say specifically. You

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know, I still would believe in
the market. If you're investing long term,

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short term, you probably want to
be in fixed investments, especially bonds

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right now with this market environment.
When the Fed does dromp interest rates,

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those are well positioned to do our
perform well because typically the increase a rate

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dropping environment, you'll see positive bond
returns in that cycle. Okay, so

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bonds are back in fashion. What
about higher yielding stocks, dividend stocks well,

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so those tend to do poorly when
there's higher interest rate bonds available,

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So i'd watch off that. The
thing that you would really want to focus

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on, especially in a shakier marketing
cycle like this, is now necessarily dividend

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painting stocks for quality companies. So
companies that have high free cash flow,

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have cash on the books. Most
of them often do pay dividends, but

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they're not you know, quote unquote
the high dividend paying stocks, So be

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looking for some form of income with
a little bit more of a kind of

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risk buffer. Quality stocks are probably
the way to go in that regard because

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they tend to do well in shape
here markets, and they still offer that

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income potential for you, all right, and steady away from small cabs,

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you know, not necessarily, because
the one challenge you've seen with small caps,

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especially in the past year and a
half, is they tend to do

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very poorly in higher interest rate environments
because they tend to take on more debt

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than a large cap stock would,
and they take on debt that's not as

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favorable. So they really tend to
struggle with higher interest rates. So if

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we see a rate drop coming in
the future, that could be an opportunity

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for folks to invest in small caps. You know, we've actually his steed.

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From a valuation standpoint, small caps
right now are actually at a pretty

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i want to say historically lobal value, but they're relatively low value from where

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they've been the last ten to fifteen
years. All right, all right,

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So anything else, any other pearls
of wisdom you have for as Derek that

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we can take to the bank here, you know, I think the other

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thing I really just said it is
the end of the We're getting close.

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I would just really pay attention to
some tax moves you can make, so

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you know, with the volativity market, I would look at things like potentially

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tax lost harvesting. You can look
at, you know, making gifts to

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folks, putting those last five Tory
nine contributions in before the end of the

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year, because those things, as
much as we love the market investing,

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those can really be something that we
have control over and provide a positive ROI

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for us of the long goal.
So I'm just generally doing some tax plannings.

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I think that I see is offer
and overlook with a lot of folks.

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All right, I think we got
an idea of where you stand there.

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People want to find out more about
you, connect with you on the

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web. How do you do that? Sure? So, as you mentioned,

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I do have a book out that's
called just Retire Already, So you

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can go to just Retire Already dot
com to either check the book out or

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if you did want to work with
me, or check me out even more.

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I do have a contact page there, so feel free to reach out.

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I'm also pretty active on LinkedIn and
just Derek Mazarella on linked In there,

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and that's probably the best two avenues
to check me out. All right,

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Hey, well, link to Derek
sites on the show notes of this

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interview on Financial Survival Network dot com. While you're there. Sign up for

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00:10:05,679 --> 00:10:09,919
our free newsletter. If you got
any questions for Derek or myself, shoot

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me an email kl atcarriluts dot com. Appreciate you coming on, Derek.

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We'll talk to you again soon.
Thanks, Kerry, appreciate it. I'm

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great today. You thanks for listening
to Carrie Lutz's Financial Survival Network your solution

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00:10:22,440 --> 00:10:28,120
to today's trying times. For the
latest, go to Financial Survivalnetwork dot com.

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