#62 – Tariffs, Tumult, and Triumph: How to Stay Ahead in a Volatile Market

Wes Moss [00:00:14]:
Good morning and welcome to Money Matters. I’m your host Wes Moss along with the great the Christa DiBiase.

Christa DiBiase [00:00:22]:
You gotta stop with that. People think I have a big ego.

Wes Moss [00:00:25]:
You don’t. We feel like the least amount of ego. The know you were checking your phone. So it’s. I know.

Christa DiBiase [00:00:30]:
Oh my gosh.

Wes Moss [00:00:31]:
It’s. We’re. We’re go. We’re live on the radio. So let’s.

Christa DiBiase [00:00:33]:
I’m a screen ager. Stopping.

Wes Moss [00:00:35]:
Screen ager.

Christa DiBiase [00:00:37]:
No more of that.

Wes Moss [00:00:38]:
I never heard that.

Christa DiBiase [00:00:38]:
Oh yeah. All the screenagers.

Wes Moss [00:00:40]:
Right?

Christa DiBiase [00:00:40]:
I mean you have screen agers. I’m sure I do.

Wes Moss [00:00:42]:
It’s so. It’s so true that they are and it’s like it’s just a constant battle. But the biggest time it.

Christa DiBiase [00:00:48]:
I was actually checking my WSP radio app by the way.

Wes Moss [00:00:51]:
Okay. That’s fair.

Christa DiBiase [00:00:52]:
Everyone should download the.

Wes Moss [00:00:54]:
The biggest is the. Is the bedtime where they the not supposed to have their phones. But of course it’s hard when you’ve got so many kids. Always police that.

Christa DiBiase [00:01:03]:
Yeah. But I’ve been policing myself because I read a study about how you get much more and I use I wear an aura ring at night, which kind of trains you on sleeping. And if you avoid devices two hours before sleep. Two hours.

Wes Moss [00:01:20]:
Does that include the TV or just a device?

Christa DiBiase [00:01:22]:
Yeah, screens. Any screens.

Wes Moss [00:01:23]:
And you’ve seen that actually make a difference in your.

Christa DiBiase [00:01:26]:
It says that. Yeah. It makes a huge difference in your amount of deep sleep that you get. And also you don’t want to eat a couple hours before bedtime. Usually most people say an hour cut out your screen time at least an hour before bedtime. But it does make a difference.

Wes Moss [00:01:38]:
You’ve seen it on your ring report that you actually get more deep sleep out the screen thing.

Christa DiBiase [00:01:44]:
I do.

Wes Moss [00:01:45]:
What if you’ve never had a time in your life where there wasn’t a screen? Do you think your body adjusts to that? I guess I don’t remember a time where there wasn’t a screen. Maybe I’ll try that. That’s interesting.

Christa DiBiase [00:01:55]:
Yep. So today, obviously last week, a lot of volatility. I mean there’s volatility. We’re going to expect more volatility probably in the stock market.

Wes Moss [00:02:04]:
Sure. And it’s almost a given.

Christa DiBiase [00:02:07]:
So you’re going to kind of tell us how to tariff proof our finances. Is that right? I mean, our retirement account proof, I.

Wes Moss [00:02:14]:
Would say that’s a little strong. I don’t know if I can tariff proof anything, but I think we can really. We can. We. I think I want to address that today because it’s been in the headlines all year and there’s real evidence right now. And there was a report on CNBC recently that showed it was from Empower. And Empower is a giant retirement plan company and they have 19 million participants. So it’s a really, they know what’s happening inside 401k accounts.

Wes Moss [00:02:38]:
And what we’ve seen so far in, let’s call it early 2025 is that people are, they’re making a lot of moves within their retirement accounts. Trading is doubled inside of retirement accounts. And even though you still see 60% or so people that are in target date funds are staying the course. There’s a huge amount of people that have been selling and trying to go into safer assets. So we’ve seen this report from Empower says that 40% of folks have sold stocks or large cap US stocks. And where’s that money going? It’s going into the stable value fund, which is really the same thing as kind of cashing out and just stashing money away. So we, we know that there’s been huge activity and it’s really because of all the uncertainty that we’re seeing in 2025. So that is the reality of what’s happening and that’s the reality of what investors do when, when headlines go from normal scary to kind of almost monster scary.

Wes Moss [00:03:37]:
And, and I think there’s a couple of things here where I, I have a solution to that. It’s not a proofing of that.

Christa DiBiase [00:03:42]:
Okay.

Wes Moss [00:03:43]:
But tariffs and then being the, the, the thought of tariffs being in the headlines, that’s probably going to be with us for a while. Doesn’t look like anything anytime too soon. But a couple of thoughts. One, we’ve essentially saw a 10% correction already in 2025. I go back to the long term chart of the market and if you look at the last 80 years, you’re going to see every single year there’s a period of time where markets are down because the stock market is certainly not, it’s not an escalator. It doesn’t just go a little bit higher every day. We have fits and starts and fits and starts and the average for any given year is about 16%. The average normal year we see a 16% pullback.

Wes Moss [00:04:22]:
And what feeds that this? The scary headlines. I think you call them scare lines. Scare lines. And these are the kind of the monsters that make us nervous about the world that we live in. And if you think about the last, call it three or four years, there’s always been a monster theme that has been out there for the media to get as many clicks as they can. And I don’t, I don’t blame the media. I mean, we’re, we’re, we’re media here. But the news media really wants to scare you, make you nervous.

Wes Moss [00:04:53]:
And you click on something and you read it. And if you go back to 2022, what was the fear headline was recession, recession, recession. 110% of economists said we’re gonna go into recession. There were hundreds and hundreds and thousands of headlines that said a recession is intimate. It’s intimate. The recession imminent? I guess it could be. It’s imminent. So that was the cycle in 2022.

Wes Moss [00:05:16]:
Then in 2023 and 2024, I think the media and the market got totally obsessed with Fed cuts. The Fed had raised rates too much. Interest rates are high. Mortgage rates are at 7 or 8%. We can’t afford credit card debt. We can’t afford car loans. We can’t afford mortgages because rates are way too high. That was the prevailing drip of fear.

Wes Moss [00:05:40]:
And it was all about Fed cuts. And the market was obsessed about it. And we got a few cuts. And that, that conversation is gone. By the way, the recession conversation kind of went away. Now we’re into I, let’s call it the third year. And I’m looking back over the main headlines now. We’re in tariff terror 2025.

Wes Moss [00:05:59]:
Everything is about tariffs and how they’re going to create, they’re creating uncertainty. The fact that we haven’t figured out what the tariffs are going to be, that’s creating even more uncertainty. And then what is that going to do to the economy? And our consumers are going to spend less and our employer is going to lay people off and we’re going to have less employment, and then we’re going to spend even less, and then we go into a recession. So Tariff Terror 2025 leads into the potential or the worry for recession, which, by the way, there’s always a worry of going into recession. The answer to this, though, and I’m not going to tariff proof, but give, give us an answer of what happens here. How can you keep investing through all this? And I’ve mentioned here on the show a couple of times, this army of American productivity. And really what that means is this, if you think about the workforce that we have in the United States. It’s 170/million people that are going out there every day for a variety of reasons.

Wes Moss [00:06:54]:
Some people have to work and they’re scared to lose their job. So they’re doing as best as they can at work. Some people do like their work and they’re there and they get some benefit out of it. And then there’s a portion of folks that really love work and their purpose in life is to make their division of their company or their small business a little bit better every day. And imagine though, 170 million people doing that every single day. Big companies do it too. So I think about some of the reactions around tariffs. Well, I think about companies like Hasbro, the giant toy company.

Wes Moss [00:07:28]:
Well, they’ve had a ton of their product made in China. Well, what happens if we have even worse tariffs in China? They have been diversifying their supply chain for some time now. They’re going to other countries, they’re going to Vietnam, they’re going to India, they’re going to other places to try to figure out a way to still do their business and still have a net margin and still make money. Apple’s been doing the same thing, Home Depot, Walmart doing the same thing. Trying to figure out how do we shift our supply chains so that we’re less impacted by tariffs. It’s just another example is no matter what gets thrown at us, what gets thrown at companies, you got a huge amount of people that are all trying to figure out that maze and still have the business grow, still have prosperity. And I don’t know if that tariff proofs anything, but it certainly is the path that we’ve seen for over 100 years. No matter what problem of the day, year, week, decade gets thrown at companies, they figure out a way to cope with it, deal with it, and thrive no matter what.

Wes Moss [00:08:33]:
So to me, I know that we’re in one of those periods of even greater uncertainty. The army of productivity doesn’t get scared out of markets, it keeps going. And neither should we get scared out of our 401ks like we’re seeing in the Empower North. You’ve got to be able to be long term investors and ultimately that’s how we get our gains over time.

Christa DiBiase [00:08:54]:
I love that. I learned a lot right there. That was awesome. Like, I didn’t know those companies were doing that.

Wes Moss [00:09:00]:
And that’s the tip of the iceberg. It’s just every company, CEO, management team, leadership, team, division head, department head, team lead, they’re trying to Figure out how to deal with the cards they’re dealt.

Christa DiBiase [00:09:12]:
And by the way, I would put myself in the third camp on people who I really do love my job. Obviously. I think anyone listening would know I’m so lucky to work with Clark, to work with you and that we do something to help people. Very, very lucky. I hope everyone listening feels the same way about their job. We’ll go to some questions now. Greg in Alaska says, hi Wes, I’m an index fund investor and wanted to know how The S&P 500 index gets weighted for its stocks. How do companies like Schwab, Fidelity and Vanguard add the percentage of a single company stock into the fund? Like how does a company like Apple get a higher percentage in the index than a company like Home Depot?

Wes Moss [00:09:54]:
This is cool. This is a really good question and it’s so important. It’s like a, this is a fundamental, I think I’d maybe take it for granted or if you’re an index fund investor, you do take it for granted. But the averages are very different. Now most of the big averages, The S&P 500 of course is the biggest representation or the most notable, I wouldn’t say the biggest, the most notable representation of US companies. But then there’s the Russell 1000, 2000, the Russell 3000. And for the most part those indices, Greg, are made up on a capitalization weighted basis. So very simply, the bigger the company, the bigger the weight.

Wes Moss [00:10:32]:
And why this is a question is because not all indexes do that. The Dow Jones is totally different. They have a totally different way of doing it. The Dow, which is only 30 companies, also supposed to be representative of the United States general economy. So technology, healthcare, finance, all within the communication, all within the Dow. But the way the Dow does is, is it actually looks at the price of the stock so that if a $200 stock is in the Dow, it has 10 times the weight as a $20 stock. Which is interesting because a stock could just split and all of a sudden because it is a lower price, it now has less weight within the Dow. So that’s why this is a question.

Wes Moss [00:11:15]:
Well, different indexes or indices do it in different ways. The S&P 500 very simply does it on a cap weighted basis. You take the number of shares times the share price and you see the, the overall size. So what that means is that a trillion dollar company, and there’s several of them now has 10 times the weight and the pull and the sway of the S&P 500 than a $100 billion company and a $100 billion company, lots of those in the S&P 500. In fact, it’s considered not even that big, has 10 times the sway as a $10 billion company. So it really, if you really go down the list and you start looking at company number 300, 400, 500 in the S&P 500, it’s not that they’re not billion dollar companies and it’s not that they’re not big enterprises. It’s just that they’re so small relative to the top part of the index. In fact, here we are Today, the top 10 companies out of 500 make up about 30, almost 35% of the weight.

Wes Moss [00:12:21]:
They really matter on what the index does. And that’s why you see two giant companies. I think he asked about Apple and Home Depot, both massive companies, but Apple’s even more massive and it has a bigger weight and a bigger sway in the S&P 500. And that’s how all the index providers do it. So, yeah. And I think it’s important to note that an index fund from Vanguard, Fidelity, Schwab, they’re not going to be perfectly identical, but they’re going to be super, super close because they’re trying to mirror what’s in the index itself.

Christa DiBiase [00:12:53]:
Okay, great.

Wes Moss [00:12:55]:
We’ve got a quick weather traffic, then more MONEY Matters with me, Chris Adibias straight ahead. Good morning. Welcome back to MONEY matters. Here it’s Sunday morning. Wes Moss, your host, my good friend Christa DiBiase here in studio.

Christa DiBiase [00:13:39]:
We are back to answer your investment questions. Jason in Oklahoma says this question’s for Wes. I’m about 20 years from retirement and I’m not 100% satisfied with my 401k options that my company offers through Fidelity. They aren’t bad, but it looks like Fidelity offers similar funds with lower fees. I’m currently in a 2040 target retirement fund with 0.21% fees, but would like to move to a 2050 target fund. It looks like access to Fidelity’s broader options of funds with lower fees. To get into those, I would have to sell my current holdings and use what they call brokerage link. My two questions are, one, can I make these changes without incurring penalties or taxes? And two, if this isn’t a good option for now, can I just switch from one of my company’s target fund offerings to another even though the fees would stay the same?

Wes Moss [00:14:30]:
Jason, the short answer is yes. I don’t see any reason that you would not be able to do that because remember, under the umbrella of a retirement plan, any sort of changes you make, they’re not reported as taxable income. There’s no gains or losses or dividends you get. It all stays in the pot of the retirement fund. So you should be able to just move from a 2040 to 2050, not worry about taxes. Now, if you want other funds with lower fees, then to some extent, I think Fidelity, by having brokerage Link available, is putting the onus onto you. And so it’s a little more work on your part. You’ve got to make the decisions.

Wes Moss [00:15:11]:
You’ve got to be comfortable with how you’re trading or where you’re investing, but you’re not taking the money out and putting it into another account. When you use brokerage link, the money still stays in the retirement plan. But brokerage a link allows you to then go out to their universe and use their other funds. Same thing. It’s still within the retirement plan. So if you make a change, do you sell one target fund and buy five other funds? You shouldn’t have to worry about incurring any taxes or capital gains here. The only thing to think about is that anytime you take, remember just taking money out of that and anytime you pull money out of a retirement plan, you get a check and you spend it, that’s when it becomes taxable. And in his case would be because he seems to be under age 59 and a half, would have the 10% penalty.

Wes Moss [00:15:59]:
But again, short answer, I don’t see any problem with you doing either within a retirement plan. Shouldn’t have to worry about taxes.

Christa DiBiase [00:16:06]:
Great.

Wes Moss [00:16:07]:
I do love these questions. And we have more ahead. News, weather, traffic, the more Money Matters straight ahead. Foreign.

Disclaimer [00:16:22]:
It’S WSB’s Money Matters with Wes Moss, certified financial planner and chief investment strategist from Atlantis Capital Investment Advisors. Wes talks to you about investing and saving for the future.

Wes Moss [00:16:35]:
Good morning. Welcome back to MONEY Matters. Here it’s Sunday morning. Wes Moss, your host here in studio, and the great Christa DiBiase right here in studio. Zrista, thank you. The next topic I want to talk about here is that this goes back to all the uncertainty we have in the marketplace this year. And you think about layoffs and how we’ve seen a spike in that to some extent. We know that there’s been tariff headlines.

Wes Moss [00:17:01]:
There’s lots of uncertainty around that. I don’t think it’s going away anytime too soon. So we talked about the Empower study where we see a huge chunk of people selling their stocks inside their retirement plans and Trying to go to find money markets and safety. So there’s some real trading activity is up. There’s some real consternation right now for investors. And I see it, I feel it. My conversations are, you know, when I sit down with families, I get the first question, are we going to be okay? The world seems like it’s falling apart. I’m scared.

Wes Moss [00:17:32]:
Is my money going to last? I mean, that’s the, I can feel that sentiment happening right now. It’s different from a couple of years ago when the market was just steadily higher and nobody was worried about anything. Those are great periods of time, but they just don’t last all that long. And we’re back to uncertainty soup is where we live most of the time, particularly with as investors. We’ve seen the market be down 10% already in 2025. We’ve seen a thousand point down 1000 points in a day. Now the percentage is not nearly as bad as it would have been 15 years ago. But still that gets our attention.

Wes Moss [00:18:07]:
It kind of gets the hair standing up on the back of our neck. And I’ll have families ask me, hey, how much dry powder do I have again? Well, what’s dry powder? And we’ve talked a little bit about this, but dry powder back in, let’s go back to the Revolutionary War when we use gunpowder. If it was wet, didn’t work. Dry powder means it’s something you can use almost as how do I protect myself? This is what’s going to keep me safe. But it’s got to be dry. So dry powder. The way I think about this from an investment standpoint is these are your safety assets. And the question is how much of that in the overall portfolio should you have.

Wes Moss [00:18:45]:
Now the way I look at this is that we know we go, we have corrections very frequently. We have bear markets relatively frequently and that means down 20 plus percent. But the average bear market recovery, and that’s, I think the important timeframe here is 2.6 years, let’s call it, let’s round that up to three. So we do know when markets go down. If we don’t want to spend the money that we have invested in stocks or equities, it may take on average three years before we want to start dipping back into that. So I’ve developed, to me, I think what helps people feel secure and feel safe while still having stock market equity exposure is to have about three years worth of dry powder. Now how do we. What’s the.

Wes Moss [00:19:35]:
First of all, what goes into dry powder? First of all, this Is anything that’s safety oriented, it’s not perfectly safe. It doesn’t mean it has to be in cash. I like using bonds, fixed income here. There’s a bunch of categories, government, municipal and corporate. The I wouldn’t put high yield bonds in this category. It’s not dry powder because they’re, they, they high yield bonds are risky and they move a lot more like stocks. But if you’re looking at Treasuries and municipals and money market, a money market absolutely counts here. But particularly with bonds, it’s not just that they should hold their value in a stock market correction, but the majority of the time, again, not 100% of the time, but the majority of the time they’re actually non correlated.

Wes Moss [00:20:18]:
They’re inversely correlated, meaning that we go into a stock market correction, bond prices typically go up. So if we have that in the portfolio, not only does it stay steady, but it actually rises and can really help to offset some of the stock market side of the ledger losses. So dry powder can be multiple things, but it’s. These are investments with, with a relative degree of safety. They can be inversely correlated. The stock market. And the question is, how much do you do? So what’s three years? You take how much you need per year. So let’s, I’m just going to use round numbers.

Wes Moss [00:20:55]:
You need $50,000 a year. You have $20,000 a year in Social Security. So we have guaranteed. You take your spending need annually minus your guaranteed income flows and that leaves us with $30,000. That means you know that you need $30,000 of extra money out of your investment, the whole investment pie, every single year. Well, we’re in a period of time, let’s say that the markets aren’t good. You don’t want to pull from the stock side, so you’re pulling from dry powder. So 30 times three equals 90.

Wes Moss [00:21:31]:
So we need 90 to $100,000 worth of dry powder in the portfolio to say the least or to kind of add a minimum. That means if you have $300,000 invested, about a third of it would need to be in dry powder. If you have a million dollars invested, you may not. The percentage is much lower. It’s really about a dollar amount here so that we can get to it when we need it. When the stock side of the market, which is erratic, isn’t behaving like we’d like to see. And that’s how I think through dry powder, not inversely correlated. It gives us a peace of mind and it accounts for the Time it takes for stocks to come back when we go into a bear market.

Christa DiBiase [00:22:08]:
Great. All right, you ready for some questions? All right, let’s do it. This came in from Tim in Florida. This is about sector weighting. I’m being pitched a service from my 401k provider to review all of my accounts for sector weighting. They have 10 sectors they feel should be evenly distributed. The one in particular they mentioned to me was the technology sector. My investments have about 28% in this sector.

Christa DiBiase [00:22:32]:
I’ve noticed that broad market indexes like VTI have about 30% in there. How important is sector weighting? FY I’m a couple of years for retirement. I have 300k of dry powder. Oh, I am about. I have about $3 million in investment. So 10%, just like you kind of said in that example would have been. Our current spending is just over 12k a month and I don’t foresee a big increase in retirement. The kicker is this sector management is they, they want me to move my IRAs into their investment house.

Christa DiBiase [00:23:04]:
And that’s the name of the investment.

Wes Moss [00:23:06]:
Okay, this goes back to. We had a question about indexes and the S P 500 versus the Dow. Why one company has a bigger weight. And it just goes back to these most, not all, but the majority of large indices. And we don’t invest in indices. We invest in funds or ETFs or index funds that are trying to mirror the indices. Right. So naturally, because technology stocks are the biggest companies.

Wes Moss [00:23:36]:
So that’s the. Those are the trillion dollar companies. I think there’s a few others that get to a trillion. But the majority of the big, the super mega cap companies in America are tech oriented. That’s why there’s a really high tech weighting in almost every index. The S&P 500 is 35%. You can make an argument that the communication sector, which is not in tech, is also a lot of tech. So you can make the arguments more like 40 or 50, 45% in tech.

Wes Moss [00:24:05]:
So I don’t think it’s a bad idea to think about equalizing your sectors a little bit on the other side. So we have 11 main sectors. Tech, healthcare, financials. Those are some of the really big ones. Industrials. But we also have utilities and we have real estate. And even though we know the big utility companies and they’re billion dollar companies, remember billion doesn’t mean a lot when you’re waiting against trillion dollar companies. So they have a really small weighting in these large broad index funds because they, it may only be 2 or 3% of the total.

Wes Moss [00:24:43]:
So there is some real value in my opinion of looking at a more balanced sector approach in the world that we live in today because tech is dominated so much of the marketplace. And you can do that now. You don’t have to have a company do it for you. There’s a couple of different options that the TIM can do. You can find an equal weighted index where they’re weighting every stock the same amount. That that brings the imbalance down dramatically. And then you can find an equal sector weighted ETF or fund where they literally will say we’re going to have 12% in all, in all the sectors. The exact amount that way you have, you would arguably have utilities have the same weight as tech and the same way as healthcare and the same way as financials over time.

Wes Moss [00:25:31]:
The equal weighted and I’ve looked at this many times over the years and more and more as the market’s gotten so overweighted into one area. The equal weighted market indices actually do really well over time. They just haven’t done as well as the cap weighted indexes because tech has dominated and tech has done really well. So I think it’s a good idea to look at that. But he could. Tim, you can find that in your own funds or ETFs that are. That are doing that job for you.

Christa DiBiase [00:26:00]:
Okay. This question came in from Molly in New York. My kids, age 5 and 10, have $4,000 that was gifted to them by a relative. I bought I bonds with it in 2022. Do you know if I can roll this money into 529s for them without triggering a taxable event? And if so, how do I do it?

Wes Moss [00:26:18]:
Yeah, this is more of just about the rules for Molly in New York. And again, I think you can find. It’s easy to find these rules, but essentially as long as there’s ownership for a full year and it sounds like because this is back in 2022, there’s ownership for over a year. So check that box. They have to be registered in the parent’s name, not directly in the children’s name. Let me just see. Did she say whose name these were?

Christa DiBiase [00:26:48]:
She did not. They got the money. She bought I bonds with it.

Wes Moss [00:26:52]:
So it sounds like it’s still probably her Ali’s name. So if it’s in Molly’s name and the held for 12 months, that’s. Those are the two boxes to check. And the third box is your tax bracket going back to taxes. So the income, there’s some Income limits here for married filing jointly, it’s the 145 to 172 bracket. So if she’s under essentially, I’m sorry, 175 under that, then she would qualify to be able to roll those into a 529. So you go to the U.S. department, treasury, you cash in those bonds, and within 60 days, Molly, you’ve got to get that money into the 529.

Wes Moss [00:27:33]:
And that’s the way you would want to do this. Okay, we’ve got a quick weather traffic, then more Money Matters straight ahead. Good morning. Welcome back to Money Matters. Let’s get back to some of these questions.

Christa DiBiase [00:28:14]:
Christa DiBiase, Gene in Washington says, dear Wes, a question regarding unrealized gains. I generally have $1 million in unrealized gains. This accounts for roughly 40% of the account total. I’m out of work, so will not be getting a W2 this year. Should I generally reduce unrealized gains as circumstances allow? And now specifically, as I have no other income, if I do, I would probably just reinvest in stocks for more growth, possibly some amount in less risky investments, or should I just let the gains grow and fluctuate with the market and not take the tax hit?

Wes Moss [00:28:49]:
Gene, I would just, I’d started to say the short answer is don’t let the. Do you have a dog?

Christa DiBiase [00:28:53]:
I have two dogs.

Wes Moss [00:28:54]:
Two dogs. I do, too. I actually had a family I work with bring in their therapy dog the other day. It was a little, little golden doodle. And it’s, you know, just, it really, it’s funny because you would think these therapy dogs are kind of intact or very calm, running all over my house, running all over the place. And I kind of knew, just like my dog crazy in the very beginning. And then by, by the, by 10 minutes later, she was sleeping in my feet. So anyway, but what I bring that up because you don’t want the tax tail to wag the investment dog.

Christa DiBiase [00:29:26]:
Nice.

Wes Moss [00:29:27]:
You don’t, you don’t want the tail, which is less of the dog, to really manage the whole situation. So you don’t want to just say, well, because I want to get rid of some of these gains, I’m going to do it. The investment side is more important. Now the good news here for Gene is that he can start to manage his tax bracket. We talk a lot about a lot of these questions that we get here. Go back to managing your bracket and taking advantage of periods of time when you maybe have less income. So he’s going to Be year of no income because you’re in a low or zero income from, let’s call it a year, you actually have a lot of room to sell and take realized gains and still not pay taxes. That’s the cool part about long term capital gain rates is that yes, you hear Mostly they’re at 15%, but they’re also at 0% on if you have very little or have lower income.

Wes Moss [00:30:21]:
And they’re also at 20% if you really have a lot of income. So it’s not a static rate. When you sell though, Gene, it also adds to your income. So the virtue if you had zero income, it doesn’t mean you could sell $1 million worth of gains and still pay no taxes. The gains themselves will start to put you in a higher bracket. And this is super rough math, but if you’re a couple married, filing jointly, you have room for about $127,000 worth of gains because you have a $30,000 deduction. And that can keep you in a zero to super low bracket. So I would at least consider that.

Wes Moss [00:30:57]:
Now you have to talk to a CPA here and you’ve got to run a tax projection. But he could, if he wants to eliminate some gains, you don’t do it just because you want to eliminate gains from an investment portfolio. But if you have the room and you can pay very little to no taxes and you want to do that from an investment perspective, which is the priority, then by all means it’s a good strategy to do it. The second thing I would say for Gene is pull up my favorite tab, which is the unrealized gain loss tab. So any brokerage firm you’re in, you don’t just look at the positions, you go to the cost basis tab. And invariably what I would suspect here is that he probably has a ton of stocks and 2/3 or maybe even 75% of them have done really well and have big gains. But there are probably a few that are flat or maybe even lower. It’s those you can sell, take a little bit of a loss.

Wes Moss [00:31:50]:
That actually gives you some leeway because a loss will offset a gain and that’ll help him identify how much room he has to sell so that he could maybe start paring back some of the positions that have gotten too overweighted or too heavy in the portfolio. So there’s just a couple of things to do. Know your tax bracket, how much, if you sell and gain will push you into the higher brackets and manage your taxes by selling some of the or harvesting some of the positions that haven’t done as well.

Christa DiBiase [00:32:21]:
Great.

Wes Moss [00:32:22]:
Christa, I love having you here. I love all the questions you bring to the table. You’re making us work and I love it. So thank you as always for being in studio. Send us more questions@yourwealth.com contact. We’re going to run to question quick news, weather, traffic. Then Jeff Lloyd joins us in studio for the upcoming hour. Straight ahead, are you facing a fork in the road and deciding between continuing your career and retirement? I’m Wes Moss, host of Money Matters and this massive life decision shouldn’t be taken lightly.

Wes Moss [00:33:18]:
Talk with my team if you’d like help reviewing your retirement accounts and building a financial plan, we can help you review options and offer an opinion based on your best interests. You can find us@yourwealth.com that’s y o u r wealth.com.

Disclaimer [00:33:36]:
It’S WSB’s money matters with Wes Moss, certified financial planner and chief investment strategist from Atlantis Capital Investment Advisors. Wes talks to you about investing and saving for the future.

Wes Moss [00:33:50]:
Good morning and welcome to Money Matters here at Sunday morning. Wesley Moss, your host along with co host Jeff Lloyd in studio. Jeff Lloyd, Hey, I know you were doing we had to do picture week this week. How was that? Don’t you love having your picture made?

Jeff Lloyd [00:34:05]:
It kind of felt like I was going back to elementary school to have the head shot shot. Picture day.

Wes Moss [00:34:11]:
Yeah. Well it’s just been a while. We needed a more updated version. I was probably 25 when I had my last photo taken so it’s more of an occurrent realistic look. I think it’s appropriate.

Jeff Lloyd [00:34:23]:
Wes, you hadn’t aged a day.

Wes Moss [00:34:24]:
Sure.

Jeff Lloyd [00:34:25]:
Okay.

Wes Moss [00:34:25]:
That’s sure. So what did not I was going to say what aged me this week was the stock market, but not really. Last Sunday we went over correction statistics. We’re obviously in a correction that we’re technically not out of one until you go back to the high where we where we dropped from. So as of last week we officially went into correction territory. The markets were relatively decent this week, not the slightly up when we had the Fed decision. And that I guess was the big economic news this week. Jeff Lloyd was the Jerome Powell and the Fed staying on hold, not moving rates, staying put, leaving rates unchanged, not touching the dial, standing still, whatever you want to call it.

Wes Moss [00:35:09]:
We are still in that four and a quarter to four and a half percent range on the fed funds rate and they essentially I think they were to me he was optimistic but then just a little bit more caution. The Consumer sentiment surveys are coming in where people are saying they’re a little more nervous. I think that comes from policy uncertainty. We’ve got a tariff headline every 15 minutes. So that’s what the surveys say. Jeff Lloyd, bank of America CEO Brian Moynihan was on this week and talking about the real numbers. I mean, again, something like a trillion. Bank of America is massive, right? They have millions and millions of accounts.

Wes Moss [00:35:46]:
So it’s a pretty good sample set of what the US Consumer is doing. And their consumer is spending six and a half percent more in this first quarter than last year. So consumer sentiment surveys say, oh, we’re nervous, we don’t want to spend yet. People are spending six and a half percent more. And Powell actually mentioned something around that, which was even though there’s some softness in the sentiment data, still no cracks when it comes to actual consumer spending. So that’s the soft data versus the actual hard data still coming in pretty strong.

Jeff Lloyd [00:36:20]:
And that’s kind of one of the things that we’ve continued to be talking about the resilient consumer. And certainly when you have the CEO of Bank of America coming out and saying that they’re seeing some continued strength from the consumer, that’s welcome news. And, and with the Fed decision and Powell’s comments and all that, markets reacted favorably on that Wednesday when the announcement came out.

Wes Moss [00:36:45]:
I did like that. I did like, not didn’t like when first of all, it’s funny that he used the word temporary or transit. He didn’t use transitory. But I thought that they got rid of that word and they let it back in the building this week, they.

Jeff Lloyd [00:36:59]:
Probably shouldn’t have let it back. And just going back a few years, when Jerome Powell was talking about inflation and we heard a lot about, well, inflation is transitory. This is transitory inflation. Well, turns out, I’m not saying he was wrong, but he wasn’t right.

Wes Moss [00:37:15]:
Nice way to put it, Mr. Powell. I’m not saying you’re wrong, I’m just not saying you were right. But he was talking about tariffs. So does inflation get stoked a little bit from. From tariffs? Obviously, you start putting a 10 or 25% tax on something coming into this country, somebody’s got to pay it. And that’s why, of course, just logically, we think, well, tariffs have to be inflationary. Now, they’re much more complicated than that because the foreign countries currency will typically adjust with big tariffs and the manufacturer will eat some of that cost.

Wes Moss [00:37:51]:
So the tariffs that we saw in 2017, 2018, they weren’t really all that inflationary. Now, the thought here is that while we already have tariffs, now we’re increasing them even more and you really squeeze the manufacturer, the producer. Producer, that much more. And the answer is probably not as much leeway there for them to take up the slack and essentially pay the tax so that the US Consumer doesn’t have to pay it. But that’s what Powell was talking about. He was saying, look, we, I know we have tariffs that are potential, that could be inflationary, but it could be. That’s where he used the word, it could be temporary. Which is also another nod to.

Wes Moss [00:38:27]:
There was another nod to the thought that tariffs are more of a tool than, as opposed to this, this door that just shuts and never reopens.

Jeff Lloyd [00:38:37]:
And the inflation expectations were around two and a half percent. And Powell and the Fed came out that those inflation expectations, while temporary, could tick up to that 2.8% range. So ticking up just a little bit. But like he said, and he said it before, temporary.

Wes Moss [00:38:55]:
The other two comments I thought were interesting. One, Powell himself admits no one has a crystal ball. You think of if there’s anybody that really knows what’s happening, it’s got to be the Federal Reserve. They’re the, they’re the captain of the ship. They’re the pilot of the economic plane. But they’re taking in data just like everybody else. And Wall street is really quick to take in data and model out. And the Fed doesn’t seem to be any faster, any better.

Wes Moss [00:39:19]:
So he admits there’s no crystal ball, number one. Number two, he said, look, reporters afterwards ask him about recession. They went, what’s the chance of recession? He said, look, there’s always a chance of recession lurking. There’s always a chance, roughly one in four at any given time. But the Fed, again, they don’t forecast recession. So that’s where we are. Again, I don’t look at it as do nothing. They’re actively doing nothing with interest rates.

Wes Moss [00:39:48]:
They’re keeping them where they are. If we have slower economic growth and we do start to trend lower economically, well, guess what, they’ve got some room. The lower rates stimulate the economy. That’s the whole policy. Those are the levers that the Fed can pull.

Jeff Lloyd [00:40:04]:
Now, would you say the Fed’s kind of on cruise control right now with where the economy is, where inflation is, where employment is, and just kind of in the, continue to be in that, that wait and see mode? We don’t need to start moving slower, we don’t need to start moving faster. We’re just going to kind of maintain the course and speed.

Wes Moss [00:40:23]:
Right, Jeff? I would call it active cruise control.

Jeff Lloyd [00:40:26]:
Active cruise control.

Wes Moss [00:40:26]:
Just like the Chevy commercial.

Jeff Lloyd [00:40:28]:
Not on autopilot.

Wes Moss [00:40:29]:
The guy, the guy’s in the car. He’s in a truck and he’s doing the. They’re doing the clapping game. Clapping game and their hands off the wheel. I think that’s one of the worst commercials I’ve ever seen. What is the point of playing patty cake while you’re driving? Is that why we have self driving cars? Is that why we have active cruise control? Makes no sense to me. Terrible commercial.

Jeff Lloyd [00:40:50]:
I think if I’m driving down 75, 85 and I see the driver doing patty cake, I’m. I’m moving lanes. I’m getting over. I’m not, I don’t want to be anywhere near that car.

Wes Moss [00:41:01]:
Look, it’s March Madness. It is March Madness. It’s basketball season. In fact, next week here in Atlanta, we’ve got the sweet 16, we’ve got the elite eight, and it’s an exciting time. My kids doing multiple brackets. I did this year. I did like the auto populate just because it’s. There’s so much to choose from.

Wes Moss [00:41:22]:
So we’ll see where that goes. But when it comes to March Madness, you look at it in a little bit of a different term because today is an anniversary of something and I can say it’s a good and bad anniversary all at the same time.

Jeff Lloyd [00:41:37]:
And usually when we’re talking about March Madness, we’re referring to the NCAA basketball tournament and the Sweet 16 Elite Eight, the Final Four, the national champion. Even though that’s played in March still. Even though that’s played in April, we still call it March Madness. But yes, today is March 23rd and it is the five year anniversary of the market bottom during COVID March 23rd, 2020 is when the market bottomed back during the COVID pandemic.

Wes Moss [00:42:11]:
These numbers don’t even. I mean, they’re so distance. The. If you look at what happened on the 23rd, the index was at 2200 for the S&P 500. And that was after a collapse of 34% in just 32 days. 30. Some days, yeah.

Jeff Lloyd [00:42:31]:
The market peaked before then on February 19th. And basically a month later, March 23rd hit the market bottom down 34% in just a month.

Wes Moss [00:42:44]:
If you look at the. Some of the. If you think about that then. And this has come up. I was on Von Hessler this week. We’re talking about, hey, how nervous are you about the economy, obviously, everyone’s nervous and the market’s down 10%. It’s gotta be, are you nervous about it? And you have to compare these corrections in these bear markets that we’ve gone into over the past. And I think about the sentiment around then versus, okay, we’ve got a bunch of confusion around tariffs.

Wes Moss [00:43:12]:
We have some fear around the government shrinking and people losing their jobs. And that permeates through it. So I think about the great financial crisis. We had 7% unemployment. It wasn’t just the 7%. It was the 93% of people that thought they’re worried about losing their jobs. That’s what really hits the US Economy. Creates uncertainty, creates fear, and then people stop spending.

Wes Moss [00:43:33]:
And what I think about this time around is that, particularly if I compare it to what happened again five ago when we hit that low, is that there was just complete fear, complete almost hysteria when it came to what we were facing as a, as a country, a nation, as a globe. And then if you look at it economically, it’s just, it was probably the only one of the very few times I’ve been able, ever able to use the word unprecedented because it truly was, it was absolutely in a mod. In the modern world we lived in, hey, we’re just going to shut everything down. And, and, and one of the markers in my mind was that the NCAA tournament was canceled. And then that was the domino that essentially took down pretty much everything else got canceled. And then, and at that point, within a few days, we were in, quote, lockdowns that were supposed to be a couple weeks. They ended up being the better part of a year and even further depending on where he lived in the United States. But so we’re in the middle of that fear and we just had no control and no reference for it.

Wes Moss [00:44:39]:
That was scary. And that took the market down over 30%. What we’re living through today, not to discount the uncertainty that we heard today, but it’s somewhat manufactured, right? It’s, hey, I think we were going to do this tariff and we’re going to do 200 tariffs on champagne coming in from France. And all of this is, it’s the result of something that the, It’s a policy that’s being created on the fly that, guess what? If it were that bad, think about what could have. The administration could say, okay, we’re good on tariffs, and the next day the uncertainty would, quote, go away. We did not have that option. When you go through something like we did the anniversary five years ago, right?

Jeff Lloyd [00:45:17]:
And we have seen and been through political uncertainty before, both now in the past, and it’s going to happen again in the future. Five years ago when there was a global shutdown for a pandemic, we didn’t have much reference to guide us through the markets then.

Wes Moss [00:45:33]:
I’m looking at a heat map of one of the worst days during that period of time. The s and P500 was down nine and a half percent in a day. But there’s a lot of other context around that because there’s some interesting things that happen really soon after that, and we don’t want to discount those either. And we’re not because we’re on Money Matters here on a Sunday morning. I’m your host Wes Moss. We’ve got weather, traffic, the more Money Matters straight ahead. Foreign Good morning and welcome to Money Matters Sunday morning. Your host Wes Moss along with Jeff Lloyd, co hosting here in studio.

Wes Moss [00:46:31]:
Right before the great break, we talked about how this is the fifth, we’re calling it March Madness, but really we’re going back five years and today marks the anniversary of the market low during COVID which happened really quickly. Just within 31, 32 days, we dropped over 30%. And some of those days were just it’s hard to imagine. I remember the circuit breakers were going off. The the market stopped trading. There were pauses. If you go back to March 11, which was leading up to the waterfall decline, S and P was down nine and a half percent in one trading day. That was the sixth worst trading day in the history of the s and P500.

Wes Moss [00:47:09]:
If you look at a chart, all 500 companies, it’s all a sea of red, few green dots, meaning that there were I think 10 companies that were up and there were 490 companies that were down. So there was really almost no way to hide. Google was down 10% in a day, Microsoft down 12. JP Morgan was down 18% in a day. Now that was the tough news. That was the slog and the worry and the fear. What was and by the way, what happens when markets are dropping that quickly? It means everybody’s out there selling. That means that the volume of people going to cash getting out of stocks goes way up really, really quickly.

Wes Moss [00:47:46]:
But then what happened? JEFF lloyd well, when you think about.

Jeff Lloyd [00:47:51]:
The stock market back in Covid, everyone just remembers the big down days, the nine and a half percent drop on what was that? March 12th, down nine and a half percent.

Wes Moss [00:48:02]:
I remember the down days. I will tell you mentally, I can remember being in the office, CBC, circuit breakers stop trading, market gaps down then seven, then nine.

Jeff Lloyd [00:48:14]:
And when you see a headline that S&P 500 has its sixth worst trading day of all time, that’s a scary headline. But here’s what we need to remind our listeners. What happened the next day.

Wes Moss [00:48:29]:
I don’t remember what happened.

Jeff Lloyd [00:48:30]:
We had the 10th best S&P 500 performance in history. The very next day, the market went up 9.3% in a day. So we lost nine and a half and got 9.3% back that very next day.

Wes Moss [00:48:45]:
We were looking, you and I and Connor Miller this week where we were looking at this scatter plot that just showed essentially a tiny little dot for every single market day. And most days are right within 1%. So most are right on that 1% line here and there. And then the outliers are these massive market events. And there’s a red dot for down 5, down 6, down 8, down 10. But what’s so interesting and visually it’s so clear to see that every blue dot, which was essentially which represent really good days, they’re all almost perfectly in line with the worst days. I think your point here is that you almost can’t have an amazing up stock market day without a really bad day. And that goes back to the what we’ve talked about here many, many times, and we will over time, is the reminder you can’t miss those really good days on the market.

Wes Moss [00:49:38]:
Now, the punchline here is that we dropped a 2200 on the SB500. Where do we sit today? Round numbers 5600. So since that bottom five years ago, very scary time. Hard to even stay invested. But if you did or the S P500 is up about 150% since that day five years ago today. And you’re listening to Money MATTERS here on a Sunday morning. I’m your host Wes Moss along with Jeff Lloyd. We’ve got news, weather, traffic, then more Money Matters and a new retirement readiness study from Transamerica.

Wes Moss [00:50:12]:
Straight ahead.

Disclaimer [00:50:22]:
It’S WSB’s Money Matters with Wes Moss, certified financial planner and chief investment strategist from Atlantis Capital Investment Advisors. Wes talks to you about investing and saving for the future.

Wes Moss [00:50:34]:
Good morning and welcome to Money matters. It’s Sunday morning. Your host Wes Moss along with Jeff Lloyd here in studio. Jeff, it’s March Madness. We covered the March Madness of five years ago when March Madness was shut down because of the madness of the global pandemic, market dropped like an absolute crater lockdown. Scary. Here we are five years later, up over 150% for the S&P 500. Now here we are again, a little bit of a tumultuous time if you really compare the two.

Wes Moss [00:51:04]:
Now granted these are some. Covid was an absolute extreme. There’s just really no comparison with the level of fear. However, when markets drop, they drop. People get nervous. We’ve seen 4x of the trading in 401k accounts. We’ve seen people pulling money out of large cap companies and target date funds and going to cash. It’s been a.

Wes Moss [00:51:24]:
I’ve seen that now over the last couple of weeks those studies from big retirement companies. There’s another the. I remember doing this over the last couple of years every anytime the retirement readiness survey comes out. Exciting. Kind of gives us a state of retirement in the United States. This is the 25th annual from Transamerica and it looks at how prepared are people in the United States when it comes to retirement. Who is in good shape, who’s struggling, what are the big needs? How often are people pulling money out of retirement plans, early withdrawals, loans from retirement plans. And then there’s a category.

Wes Moss [00:52:05]:
I call it retirement dreams versus retirement reality. We’re going to get into that in just a second. But because we are still in this period of we’re not out of a correction and we won’t be until we go back to above where we were when the whole thing started. But once you’re down 10% you got to go back up the full 10% which actually mathematically is what, 11% to get back to even remember, the law of the arithmetic of loss is an interesting. It almost intuitively doesn’t make sense. However you explain it, and it does, how you have a 50% loss, a dollar gets cut down to 50 cents. What kind of rate of return do you need to get back to just where you were. 50% loss takes a 100% gain.

Wes Moss [00:52:49]:
Your 50 cent piece, Jeff Lloyd has to double, that’s 100%. So that’s the arithmetic of loss. But how often does a correction turn into a bear market? Again, we can stomach these 10% and, and there’s a certain percentage of folks that get nervous about it. But we weather it. It’s a very much higher percentage of people get really don’t like the down 20%. And history shows us since this goes back to I want to say 1950, really this goes all the way back to World War II. So before 1950 there have been 48 10% corrections and only 12 of them have turned into a full down 20%. So 75% of the time These corrections don’t manifest into full bear markets.

Wes Moss [00:53:39]:
And I’ll take those odds, Jeff.

Jeff Lloyd [00:53:40]:
I’ll take those odds. And what we’re experiencing now or have just experienced is a correction, meaning the market from top to bottom went down 10%. Okay, how often does that happen? It happens a lot more often than we think. It happens 64% of years going back to 1928. So that’s more than once every two years.

Wes Moss [00:54:05]:
Right? Here are some statistics from. Let’s see, size of a decline, 5% or more. Happens essentially three times a year, 10% or more. About again, if you go back over the course of economic history, 1951 till today, call it almost every year, down 15% about once every three years, not minus 20%. One in every five to six years. That’s just the frequency of how these happen. Now if you look at what happens just like we talked about now, this is a five year number we talked about today. Five years ago, market trough from the COVID pandemic, lockdown, shutdown, correction.

Wes Moss [00:54:44]:
Bear market is more than a correction. Of course in hindsight here we are 150 plus higher. But on average what happens a year later? Average S P500 returns following the last 21 corrections of 10% or more since 1980. Six months later if, if we’re not in a recession, markets are up 10 on average. Twelve months later, mark is up 12% on average. So those are the statistics around that. I think the reason this one had just a little bit extra angst is how quickly it happened. If you go back to the last 2010% corrections, this is one of the fastest ones we’ve ever seen.

Jeff Lloyd [00:55:24]:
This was the fifth fastest on record going back to 1950.

Wes Moss [00:55:29]:
By the way, the fastest one ever was in February of 2020. It was an. We’ve dropped 10% in eight days. And then we had some down 9% days that you were talking about. Well, the good news around that is that we had some of the best market updates right around that same period of time. And then of course the market bottomed in that late March period of time and had a tremendous run and just left the folks that were part of the selling. Left them behind is really tough to get back in the market once you’re out. So we’ve talked about that and it is kind of just.

Wes Moss [00:56:03]:
It’s fascinating to see some of these periods of time when it comes to these gains in 2020. Some of these March dates, I guess the day after we bottomed, which would have been March 24th. The market was up 9% over 9% and then proceeded higher from there. Now, all of that to say is that the market is tough. Right? It’s not an easy thing to participate in. You’ve got to have lots of knowledge and perspective around it. And that’s what we try to bring here on Sunday mornings. Try to educate and understand how markets work and that we lived through these.

Wes Moss [00:56:37]:
But it’s also no wonder that it makes it really hard for the average American to invest anything at all and be good investors over time because it’s tough on your constitution. And that brings me to the retirement readiness Reality check, I think is what Transamerica is alluding to. And some of these statistics are kind of fascinating. So it’s Transamerica. They used Harris to survey 10,000 adults. About 6,100 of those folks were employed, self employed, and then the rest, I guess, were actually retired. But here’s some of the statistics around that. When it comes to the state of Americans in retirement, only 44% of folks have recovered financially since the pandemic.

Wes Moss [00:57:27]:
That’s a big number.

Jeff Lloyd [00:57:28]:
That’s pretty eye opening to me. And look, I know there was a lot of turmoil back then, but the market, yeah, the market went down 34% in just over a month. But as it stands today, from that market, bottom S&P 500 is up one and a half times. It’s up over 150%. So it’s pretty staggering that 44%, almost half, haven’t financially recovered.

Wes Moss [00:57:51]:
Yeah, well, 56% haven’t fully recovered then. Think about this. 72. Well, this one makes sense. 72% of Americans are tightening their belts and spending less because of inflation. That one doesn’t surprise me. I would think that actually be more than that. Nearly half of folks, well, 43, I don’t know if that’s your lap.

Wes Moss [00:58:10]:
43% of Americans are worried about AI taking their job. That’s scary.

Jeff Lloyd [00:58:17]:
That seems high to me.

Wes Moss [00:58:19]:
Almost 70% of Americans fear they won’t have enough savings by the time retirement rolls around. So that’s kind of the state of nervousness in retirement. A third over a third to 37% of folks have borrowed or withdrawn from their retirement accounts recently to just try to keep up with inflation, keep up with bills. The statistics around. Well, or health in retirement, only about. I guess this is interesting. In a financial study, only 51% of Americans regularly exercise. That makes sense.

Wes Moss [00:59:00]:
About half the people, when you’re driving around town are out there running around sweating, making me feel guilty that I’m not running around as well. Just over 53% of folks say they eat healthy. I don’t know if I’d be in that camp. Some days I’m eating healthy, Jeff. If I go too many days eating healthy, I just don’t want anything healthy again. I almost have this just. That’s enough. Give me Shake Shack, give me a.

Jeff Lloyd [00:59:24]:
Burger, give me some fries, give me.

Wes Moss [00:59:26]:
A milkshake, but give me healthy fast food. It’s called Chick Fil a. I think.

Jeff Lloyd [00:59:31]:
They got grilled chicken now. It’s pretty good. But look, all these components for retirement. Yeah, there’s the financial side, but they’re mixing in the lifestyle, the, the healthy eating, the exercising. That’s all part of a overall healthy retirement.

Wes Moss [00:59:46]:
Here’s proof that very few people are listening to us. Only 26% of people or Americans have written out their retirement strategy. That means about 73/4 of people have done no planning whatsoever. They don’t have one of these 30 page financial plans which are easy to do. They haven’t gone and done an online calculator. They haven’t even drawn out a retirement planning timeline. Proof, Jeff Lloyd, that not that many people are listening here on Sunday mornings.

Jeff Lloyd [01:00:13]:
And they’re not going to be able to retire sooner either.

Wes Moss [01:00:16]:
Let’s see what else here. 34% of folks. Well, retirement loans. So 34% of people have taken loans, early withdrawals or hardship withdrawals from their retirement funds. So they’re, that means they’re paying, they’re not only they’re paying taxes, they’re paying 10% penalty. And it’s for, it’s just for emergencies. So that’s the biggest chunk of why people have to do it. That nobody wants to pull out, pull money from an IRA to pay taxes and a 10% penalty.

Wes Moss [01:00:47]:
But it happens. That’s a big chunk of why that happens. 24% for home improvements. I don’t know if you want it. You don’t want to pull money out early from retirement plan. Pay tax and a penalty for home improvement. And then 24% pay down debt. Here’s one that’s maybe a little more optimistic.

Wes Moss [01:01:05]:
This is a little spark of optimism from this. 65% of Americans dream about traveling in retirement.

Jeff Lloyd [01:01:15]:
That’s the number one core pursuit. You’ve written a book about it, Happiness in retirement. You get that by travel.

Wes Moss [01:01:23]:
57% of folks look forward to spending more time with family. And then let’s see here, 17% of unemployed folks don’t have any retirement dreams at all. Huh. I guess that makes sense if you’re not making any money, it feels impossible to save for the future. So you’re not thinking about the future. But I’m going to stick on this. 65% of folks dream about travel. It’s funny, I don’t think about that.

Wes Moss [01:01:52]:
That’s not one of my, in my head, that is not a thing.

Jeff Lloyd [01:01:56]:
Traveling in retirement, that’s not a thing for you?

Wes Moss [01:01:58]:
Not really.

Jeff Lloyd [01:01:59]:
What is in retirement?

Wes Moss [01:02:00]:
I don’t really consider, like when I go to Michigan as a, I don’t really don’t think about it. I guess it is travel, but I don’t really think of it as travel. I, I, when I think of travel, I think Chevy Chase, European vacation, like that’s a tr.

Jeff Lloyd [01:02:11]:
You’re traveling, you’re packing up the station wagon and you’re drowning across the country.

Wes Moss [01:02:15]:
Got to be with the whole family. Got to be uncomfortable ice cream in the streets, melting gelato. That’s like traveling the Grand Canyon. That’s traveling. But you know, going to visit family in Pennsylvania, I don’t really count.

Jeff Lloyd [01:02:32]:
I don’t count.

Wes Moss [01:02:33]:
All right, we got to run to weather traffic. The More Money Matters right here on WSB Radio. Straight ahead. Foreign Good morning and welcome to MONEY matters. Here it’s Sunday morning. Your host Wes Moss along Jeff Lloyd. What do we learn this week from this week’s market? Big economic news.

Jeff Lloyd [01:03:16]:
I think we learned a little bit about patience and we heard about Jerome Powell talking about patience and waiting to see how inflation and the economy and the, and the tariffs and just taking a holistic look into the market and the economy.

Wes Moss [01:03:30]:
You know, he admitted, can you believe he admitted he doesn’t have a crystal ball? I thought he had, I thought surely if anyone had a crystal ball, it’d be Jerome Powell. But he just reminded us that even though the Fed, they’re the global watcher of the economy, they don’t have a crystal ball. Guess what? Recessions are always around the corner lurking. He didn’t say that. Hey, I think we’re going to have a recession. Just in response to that, he said, look, we can always go into recession. That’s just the reality of economic cycles. Even though so far the data just doesn’t support that at all.

Wes Moss [01:04:05]:
Unemployment still 4.1%. Inflation in check. The bank of America CEO this week came out and said that their sample set, which is a massive sample set in the United States and they can watch actual dollars leaving accounts spending up six and a half percent year over year. That was, that was surprising to me because we’ve Seen these consumer sentiment surveys say people are feeling nervous and they’re feel feeling unsettled. The hard data doesn’t support that. If we look back at market history and yes, we’re still last week we hit correction mode. So we’ve been talking about that. We do know that three quarters of the time you go back all the way to World War II, 75% of the time, a 10 correction does not turn into a bear market.

Wes Moss [01:04:48]:
And they happen over and over and over again. Corrections do the last 50 years, 93 pullbacks of 5% or more, 27 pullbacks of 10% or more, 13 pullbacks of 15% or more. And we can’t predict the future. Jerome Powell can’t predict the future. But history gives us a guide and it gives us a reminder that things are going to be rough and choppy and then they should recover. They’re rough and choppy and then they should recover. And it’s too difficult to nail or precisely predict the peaks and the valleys of the stock market. Lloyd, you brought in the fact that with these massive down days five years ago, they were followed by up 8, 9% in a day.

Wes Moss [01:05:33]:
And those are the days we just can’t miss out when it comes to getting our share of the recovery. So the odds say in general, the smart move is to stay invested, to have a solid allocation, a balanced portfolio, especially when times are turbulent like they are at least somewhat choppy waters today. So staying the course is despite unsettled times. That’s what we have to do. That is part of the DNA to be a good investor over time, as hard as it might be. So even though we get nervous or apprehensive when we hear alarming news, making decisions around fear, that’s what really stops us in our tracks. You know what doesn’t panic? The army of American productivity. The army of American productivity doesn’t panic.

Wes Moss [01:06:25]:
And neither should we. You have been listening to Money Matters. Your host, Wes Moss. You can find me and Jeff Lloyd. It’s easy to do so throughout the week. You can find us@yourwealth.com that’s y o u r your wealth dot com. Have a wonderful rest of your Sunday.