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Speaker 1: The recession hasn't happened, and the fear that I have

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is that we could still have a recession around the corner.

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You know, we had an inverted yield curve for a

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couple of years. It's uninverted and when you look at

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the history of recessions, I don't want the numbers in

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front of me, but many of the recessions happened after

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the yield curve uninverted.

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Speaker 2: And my fear is that a lot of.

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Speaker 1: People think that the stock market is a safe haven,

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and a lot of people might think that we're not

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going into recession, and that could be a big mistake

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because we're not recession proof and it still could be

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around the corner.

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Speaker 3: You're listening to Carrie Letz's Financial Survival Network, where you

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get valuable information you just can't find anywhere else to

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thrive in today's trying times. You need the Financial Survival

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Network now more than ever. Go to Financial Survivalnetwork dot

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com and get your free newsletter and gift. Financial Survival

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Network now more than.

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Speaker 4: Ever, and welcome you are listening to and watching the

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Financial Survival Network. I'm your host, Carrie Lutz. As we

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get into the last week of October, of twenty twenty four.

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Speaker 2: What is going on? We all know.

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Speaker 4: Elections about to take place, for better or for worse.

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There's always one sure loser in every election since I've

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been alive, and that is the American public. So I

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don't see anything that's going to make this any different

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that all the others. The debt keeps piling up, the

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economic challenges somehow, you know, Anthony Sacara's with us. Anthony,

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you know, I see likes bad things happening to the country.

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Speaker 2: We don't need to get into them.

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Speaker 4: But yet like these big companies, I think they said

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ten large companies are born every decade in America something

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like that. Did you see that statistic? So we have

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Tesla and Nvidia, we have all these large companies that

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really literally came out of nowhere. So in spite of

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things being bad, these companies keep cropping up here. What's

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your take on it?

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Speaker 1: Yeah, I did see that, and I've read other studies.

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And by the way, Kerry, thank you for having me back.

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Happy Halloween to all of you listening Halloweens right around

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the corner. You know, the thing that is interesting about

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this is Apple is a great example of a company

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that a lot of times people will hang their hat

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on We recently had a client that we took on

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that invested ten thousand dollars of Apple I want to

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say it was like ninety two or something like that,

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and he wound up cashing out at one point eight

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million dollars when we took it on.

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Speaker 2: This was a couple of years ago. And that's the

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way that the mouth work.

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Speaker 1: And so what I find happening is I find that

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a lot of people will hang their hat on a

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particular company, and instead of writing a diversified portfolio of

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stock to success, they'll hang it on one company. Now,

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we have to remember that for every Apple that's out there,

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there were probably ten thousand one of the apples that

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you know, failed at the same time that Apple succeeded.

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And what scares me, and I see this as starting

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to be a trend, is that a lot of people

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will pick a company Apple back in the day and

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Vidia now for their chips and the AI craze that's

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going on, and almost looking for that one company to

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really ride them all the way to success. And I

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think that's a very dangerous approach. You know, if you

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take a look at you know, companies in general, they

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all cycle. They're companies that are on the perch today

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may not have existed twenty five and thirty years ago.

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Speaker 2: Think Google and Amazon right.

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Speaker 1: And companies that are out of business today were the

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top companies seventy five years ago. Think Woolworth right, think Sears,

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you know, and so on. And if you look at

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the Dow thirty, for example, you know, the thirty biggest

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companies in the world. The reality is, if you go

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back eighty years and you take a look at the

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companies that were in the Dalt already thirty biggest companies

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eighty years ago, and you compare that to today, most

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of your listeners probably would be surprised to find out

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that there are exactly zero companies in there today that

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were in there eighty years ago. The last holdout was

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GE and GE gut booted.

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Speaker 2: From the Dow what three or four years ago. Yeah,

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you have.

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Speaker 1: And so you know, sometimes people will say, well, I'll

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just invest in those companies and I'll just ride that

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for the rest of my life. No, if you've done

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that eighty years ago, you would be out of luck today.

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And so none of the thirty top companies eighty years

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ago are in the top thirty today, but it gets worse.

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And that is that other than ge, the other twenty

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nine companies that were the top companies in the world

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eighty years ago are all out of business. They weren't

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able to change and adapt, and we are in such

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a changing and adapting the top companies today are not

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going to be top companies in the future. And you

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need to have a diversified portfolio of a lot of

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good companies, not one. But I do see a trend

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of people taking a lot of money and putting it in

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the one stock that they hope is going to win Tesla,

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Netflix and Video, and that's a dangerous trend to do. Yes,

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you should have some in your portfolio, but don't base

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your entire future on one stock. And I see it

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people a lot of people wanted to.

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Speaker 4: Do that interesting interesting analysis there, and yeah, like the

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companies have their twenty thirty year run at things right,

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and then maybe some of them go forty to fifty

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like gm Ford, and then they then they fall.

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Speaker 2: Right exactly right.

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Speaker 1: You know, the time the faster chimes change, the more

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companies are going to fall. I think Blockbuster right that

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you know, Netflix came along and realized that why do

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we have to go to a store, Why do we

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have to rent a tape?

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Speaker 2: Why do we only have seven days?

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Speaker 1: And when you look at Blockbuster and you've studied the

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history of Blockbuster, what you realize is that a part

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of their business plan and a part of their revenue,

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a part of what made them good and profitable, was

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the fact that they'd charge late fees on.

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Speaker 2: The people that didn't bring back these videos in time.

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Speaker 1: Now, call me crazy, but setting up a business and

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running a business to where your profitability is going to

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depend on penalizing the customers for not doing that, that's

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a recipe for failure. And then when Netflix came out

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and said, no, we're going to produce these things that

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we're going to deliver it to you right in your

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home and you don't have to go to Blockbuster. Blockbuster

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could have been Netflix if they had pivoted, but they didn't.

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Speaker 2: Same thing with Kodak. Kodak could have.

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Speaker 1: Been in the digital space when it comes to film,

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but they didn't. So at the faster things change, the

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companies are going to drop off. And with AI and

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with the things that are going on today, you're one

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hundred percent.

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Speaker 2: Right, you have to really be careful.

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Speaker 1: Companies that are on top today may not be anywhere

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to be seen in a decade.

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Speaker 2: You know.

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Speaker 4: Interesting you mentioned Blockbuster because that was founded by Wayne

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Uzenga and and he is the only person to ever

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found three s and P five hundred companies waste management AutoNation.

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Speaker 2: So Blockbuster's gone. He was long out of it.

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Speaker 4: He saw the handwriting on the wall, and then we

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had AutoNation. That's still going pretty good in waste management.

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The last I heard, people were still producing garbage at

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record rates, right I heard, and still recycling. You know,

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it's it's kind of crazy when you think about it.

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So let's talk about Federal Reserve. Regardless who wins, we

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still got to deal with the Fed.

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Speaker 2: Here, right, yeah, one hundred percent.

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Speaker 1: You know, Federal Reserve has two mandates, low inflation and

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low unemployment. They've had low unemployment for a few years now.

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Unemployment sticked up to about four point three percent until

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a few months ago was under four percent. Souls right

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where it needs to be as far as inflation is concerned.

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Their target is two percent in that level now with

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the mid twos. Depending on whether you look at the CPI,

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the core CPI or the PCE.

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Speaker 2: You know, it's all in the.

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Speaker 1: Mid twos and they have to make changes before they

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get to their target level because they don't want to

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be behind a ball like they were when inflation started

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going through the roof. So they lowered the fifty basis

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points as their last cut. It's widely predicted that in

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the next FED meeting or the FED meeting after that,

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they're going to go another twenty five or fifty bits,

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and then in twenty twenty five maybe another one percent

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or so.

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Speaker 2: Something like that.

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Speaker 1: So it's been predicted that they'll do two hundred BIPs

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over the court for the next years.

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Speaker 2: You miss them. You missed one thing. Though.

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Speaker 4: The Fed actually has three functions. Keep prices stable, keep

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employment levels stable, and keep the stock market from going down.

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Speaker 1: Yeah, yeah, that's that's what that's what they say, right,

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That's what the President says that that's a third function.

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But it's an unwritten function that really is not a

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part of anything that they're supposed to be considering, and

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they'll tell you that they're not.

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Speaker 2: But when it comes so the election.

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Speaker 1: Cycles, there is this debate about you know, they don't

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want the market to fall because of the market falls,

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then all of a sudden recency bias comes into play.

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Speaker 2: Recncy biases the simple.

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Speaker 1: Fact that we tend to act on what happened recently,

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and if the market fell recently by before bad time,

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making a good effect the election.

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Speaker 2: So yo.

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Speaker 1: So they do have that in mind, they're not supposed

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to have that in mind. You can't keep it out.

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It's all intertwined, and lowering by fifty bits is certainly

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going to help the stock market. That's why the market's

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hit some record highs other than the you know, a

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few bumpy days that we've had. But you're right, it's

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really not a mandate of theirs, but it's kind of

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implied into what they do. But it has been predicted

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and hand it is forecasted. They're going to lower by

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two hundred myths over the course of the NXT couple

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of years. That could be good for the stock market.

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Is it going to keep us out of a recession?

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That's a big question that consumers are asking.

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Speaker 2: You know. The reality is is, you know, we don't know.

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Speaker 1: They've been talking about soft landing, they've been talking about

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hard landing, they've been talking about no landing. It's this

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the longest tide period that I remember where we've been

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talking about a recession and the recession hasn't happened, And

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the fear that I have is that we could still

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have a recession around the corner. You know, we had

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an inverted yield curve for a couple of years. It's

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uninverted and when you look at the history of recessions,

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I don't want the numbers in front of me, but

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many of the recessions happened after the yield curve uninverted.

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Speaker 2: And my fear is that a lot of people think.

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Speaker 1: That the stock market is a safe haven, and a

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lot of people might think that we're not going into recession,

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and that could be a big mistake because we're not

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recession proof and it still could be around the corner.

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You need to invest, so whether we have a recession

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or not, you're going to be just fine. And I

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find that a lot of people are investing in a

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way to what if the stock market does bad, it

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goes against them, It's going.

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Speaker 2: To wreck their retirement, it's going to wreck their future.

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Don't do that.

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Speaker 1: Invest in a way that's right for you for your

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phase of life. So you have the ability to win

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no matter what. If you're invested right, that's what should happen.

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It shouldn't matter who wins the president, and it shouldn't

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matter whether we have a recession as to whether you

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to be able to accomplish your goals or not.

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Speaker 2: It shouldn't.

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Speaker 4: But but if you're later in life and take a

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big hit, that's going to make a big difference in

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your life, isn't.

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Speaker 1: It one hundred percent? Which is why you shouldn't be

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in a position to take a big hit. And this

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is something that I talk about on my radio show,

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my podcast, and talk about on my book. You have

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to be invested properly for the phase of life that

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you're in. If you're invested in such a way to

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where you can take a big hit, and if your

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retirement is going to be invested, If your retirement is

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going to be affected if you take a big hit,

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then you are invested wrong. You need to be invested

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in such a way to where you're going to be

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able to retire when you want, or you're going to

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be able to stay retired if you're already retired. I

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don't want you invested in such a way to where

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If the market does well, you can travel. If the

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market does well, you don't have to get a part

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time job. If the market does well, you can do

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the things you want. I want you to be able

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to travel and not have to get a second job

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and not have to keep working in retire on schedule

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regardless of what the market does, even if that means

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you have to get your portfolio more conservative, so you

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have to be invested properly for your phase of life.

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Should not be in a position to where your retirement's

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going to get wrecked if the market doesn't do what

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it's supposed to do.

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Speaker 4: So but over time, and now we've got hundreds Well,

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in the US we've got the it goes back to

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the eighteen eighties, the advent of the Dow Jones index.

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But in Europe it goes even further. But since since

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the advent of the Dow Jones, you know, a dollar

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invested would re rep huge returns. We still have never

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found a machine that creates wealth like the financial markets,

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especially the stock market.

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Speaker 1: Have we Well no, when you look at you know

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the history of investments and what investment has done the

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best over time.

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Speaker 2: The stock market is certainly in that category.

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Speaker 1: And you know, you look at the past one hundred years,

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you know, the Dow Jones going back to late eighteen hundreds,

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I know it's going to average somewhere between you know,

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eight and ten percent a year. But the fact is

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that there are long periods of time where the market,

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including the Dow Jones, is flat, and then there's long

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periods of time where the market does fifteen percent plus,

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like we've had for the last dozen years. And it

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depends on what generation or what decade is going to

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be next. But the history of the market tells us

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that there's bad decades followed by good decades followed by

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bad de gades. Even if you go back to the

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last twenty five years, we're coming up on twenty twenty five.

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Let's go back to the turn of the century and

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kind of see what's happened there. From two thousand to

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twenty thirteen, we had the crash of one and a recovery.

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We had the crash of eight at a recovery for

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thirteen years. If you draw it out, it's a big

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w there's no growth in the market.

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Speaker 2: For thirteen years.

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Speaker 1: And if you wanted to retire in two thousand and

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you were planning on following the rule of four percent

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and selling, you know, spending down your portfolio for the

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next thirteen years, you would be really close to running

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out of money because there was no growth in the

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market over that thirteen year time period. Compare that to

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the last thirteen years. The market's up fifteen sixteen percent a.

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Speaker 2: Year on average. So when you average the two together, the.

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Speaker 1: Reality is is that is that you wind up with

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YO seven eight percent a year. You throw in some dividends,

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you're going to be nine to ten percent a year.

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But averages can be very misleading in the way of

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the stock market. The first decade and a half was horrible,

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no growth. The last decade and a half was great.

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But it's misleading even though we can say it averages

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eight or nine percent a year. I can tell you, Carrie, truthfully,

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a good example of how how misleading averages can be

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in real life. In my example, my wife and I

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run about the average about ten miles a week. The true,

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but the reality is that's not the whole story. The

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way I get there is that she actually loves to

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run it. She runs about twenty miles a week and

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I don't run. So the reality, though, is don't we

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average ten miles to good average? Though we have a

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great average. But the reality is when you know the

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rest of the story, it paints a different picture. And

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it's the same thing with the market. If the market

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does in the next fifteen years what it's done in

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the last fifteen years, I don't care what you do.

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If you're spending down your portfolio, if you're following the

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rule of.

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Speaker 2: Four percent, you're going to be fine.

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Speaker 1: But if the market does in the next ten or

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fifteen years what it did in the first thirteen years

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of the century, and you're spending down your portfolio, you

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could be out of money and you could be in trouble.

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And that's what I don't want to happen to you.

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So yes, if you're trying to accumulate, you have twenty

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or thirty years ahead of you.

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Speaker 2: Be in the market, be in mutual funds, rate strategy.

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Speaker 1: Over time twenty thirty years, you'll average eighty nine percent.

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There's never been a thirty year time period of the

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market that it hasn't done that. But if you're in retirement,

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you can't afford that. The next decade or decade and

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a half. The market's going to be shopping and no

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growth and be selling assets. At the same time, you

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have to be focused on living off the interest and

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dividends of your portfolio so that you can protect your principle.

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And if that means less return, so be it. It's

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accomplishing your goal.

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Speaker 2: Well, it reminds me.

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Speaker 4: I think John Maynard Kane said in the long run,

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we're all dead.

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Speaker 1: Right, that's exactly right. But some people are dead with

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more stress than others. Yeah, running out of money if

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you're if you're invested wrong in, you're selling shares, you're

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following the rule of four percent and the market tanks,

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and now you get to sell more shares and you

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know you're in a race against time because you're cannibalizing

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your principle. That thought, knowing that you have to die

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before you run out of money, that thought can't actually kill.

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Speaker 4: You, yeah, or make you wish you were dead anyway. Well, Anthony,

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just tell us where do we find you? How do

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you connect with people? How can we how can we

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connect with you?

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Speaker 1: Yeah, I think the safest way to go is you

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can go to Anthony scar dot com.

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Speaker 2: My businesses are there on the website.

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Speaker 1: Providence Financialinc dot com or if you just search Providence Financial,

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Woodland Hills, which California, which is where we are.

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Speaker 2: We come up all over the place.

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Speaker 1: And if you have any questions your listeners, any questions

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about anything, recite more than happy to.

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Speaker 2: You'll answer those questions as well to here.

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Speaker 4: So all right, Well, the link to your site is

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in the show notes of this interview on Financial Survival

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Network dot com, so just go there and click it.

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While you're there, please sign up for your free newsletter.

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Got a question for Anthony myself? Kl at Carrie LUTs

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00:17:21,039 --> 00:17:23,680
dot com is the place to send the email. Always

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appreciate you coming on, Anthony. We'll talk to you aga

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in real soon.

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Speaker 2: Thank you for having me, Kerry, appreciate being here.

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Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network, your

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solution to today's trying times. For the latest, go to

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Financial Survivalnetwork dot com. Financial Survival Network now more than

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ever