Fed Rate Cuts: The podcast discusses the uncertainty surrounding potential Fed rate cuts, with a mixed outlook among Fed governors and the market's expectation of a neutral rate around the mid-3% range next year.
Market Performance: Despite recent highs, the market has shown some volatility, with concerns about overvaluation in certain sectors, particularly AI stocks with high valuations but low earnings.
Housing Market: New home sales surged unexpectedly in August, while existing home sales remained flat, highlighting the impact of mortgage rates and supply constraints on the housing market.
Economic Indicators: The podcast highlights unconventional economic indicators like cardboard box sales, which suggest a potential economic slowdown, and discusses the shift towards a service-based economy.
401k Catch-Up Contributions: New IRS rules require high earners over 50 to make catch-up contributions to Roth 401k accounts, potentially affecting tax deductions and requiring strategic financial planning.
Upcoming Economic Data: The podcast anticipates key economic data releases, including employment numbers and PMI readings, which could influence market expectations and Fed policy decisions.
Investment Strategy: The discussion emphasizes the importance of diversification and rebalancing portfolios, especially given the concentration risk in high-performing stocks and potential market volatility.
Transcript
This is how the Fed communicates, right? They communicate through a kind of a a spectrum of opinion. Uh looking at the averages from the dot plots, still seems like it'll it'll be two cuts this year. Uh maybe a little less certain. I think we're going to get some numbers obviously coming out that that'll that'll help solidify that. But I mean, in the grand scheme of things, it looks like the Fed's going to work their way down to some sort of neutral rate. uh maybe somewhere in the mid3s, maybe sometime next year. And until until the story changes, that's probably, you know, what what the market's expecting. Um and I think the market's figured that out. [Music] [Applause] Welcome to Rise Up, where we take a look at this week's biggest stories out there, and we really help you understand them, make better decisions about growing and protecting your portfolio. Remember, our mission here at Rise Up is to make sure we bring you the very best wealth management experts, the best conversation, and the best advice from those who are working directly with clients each and every day through all the market changes. My name is Terry Coulsson and I'm a managing partner here at Rise Growth. I also am joined by my co-host Joe Duran, CIO at Rise Growth Partners. A >> Terry, how are you? >> Joe, I was just getting through all your recognition, but I'm doing great. >> I don't think we need to do it. What an amazing I mean, it's amazing. The market hit new highs again. Obviously, we've given back a little bit, but holy cow. We've got two rock stars with us today. So, I'm excited for you to introduce uh our two amazing guests who both CEOs of really big RAAS in the country. So, we're really thrilled to have them with us today. >> Yeah, we have the best of the best. We have Andy Schwarz who's the CEO from OnePoint. Welcome, welcome, Andy. And then we also have Kevin Grimes who's the CEO of Grimes and Company. So, welcome Kevin. It's great. >> Hey, Terry. How are you? Kevin's a CFA and uh oversees over $6 billion dollars in assets and many clients and obviously uh one point and Andy oversee over 12 billion dollars of assets. So they take care of people's lives and um we have a CFP and a CFA now so we can talk about investing as well as how it applies to your personal life. >> That's right. And Andy is a CFP too. So we've got plenty of acronyms to help us with these expert conversations. I will also say that, you know, we are moving into the fall now. We had a great summer moving into the fall. We're almost done with September. So, I think we've got a lot of very helpful information uh to share today. But before we do that, I want to just do a quick look at the S&P 500 closed down 0.5% at 6604. The Nasdaq composite also set it at 223 384. the Dow Jones Industrial SH about 173 points or well 38% to finish at 459. So, you know, not a lot happening, but certainly a lot going on this week. So, I'd like to just start out with Fed Chair Powell's remarks from Tuesday. He talked about the challenging situation ahead for policy makers. investors were looking to for two more quarter point cuts this year, but he said they're not necessarily guaranteed. Fed governors and presidents have given remarks as well. A narrow majority of 10 on the board support two or more cuts while the other seven, you know, don't necessarily support any more cuts or support rates going up. So, you know, there's it's a mixed bag of what's going to happen. None of us have a crystal ball, but Andy, you know, based on the where the markets are today, how are you thinking through the Fed's decision last week as Powell made his latest remarks? >> Well, I think the most interesting thing is they're lowering rates and the long end. Rates are creeping up. You know, yields were up yesterday and again today. Markets reacting to that. I think Pal's in a tough spot. You know, he's on one hand um you know, inflation's still around 3% and tariff situation is still a bit uncertain. So there is some concerns that inflation, you know, could be sticky and maybe even slightly worse. But on the other hand, they're looking at data on jobs. You know, the economy, things could be slowing. They don't want to be too late to cut, but at the same time, um, they don't want to fuel inflation. So, I think it's really difficult in the last couple of days. Also, a few voting members have made some comments. It looks pretty mixed. You know, I'm not sure whether they're going to cut two more times or not, but the reason the yields have gone up is because it was already baked in and the assumption was that there were going to be three or four cuts and it was almost assumed to be definite and now it's not. And so again, they can control the short end, but not necessarily. Terry, I know you're going to give a very good anecdote about uh Greenspan, but I thought that his speech, Pal's speech had a little bit of the unreasonable exuberance that uh that we heard in the late 90s from Greenspan that I I I think he's concerned that we are in bubbly territory in the stock market and certainly valuations for a lot of the names that have no earnings uh feel a little bit frothy. There are a lot of AI names that make a ton of money, but there's also a lot of stocks that are going up with very little more than just the idea that they might do something and that's a little bit scary. >> Yeah, I agree. You know, it's a really a balancing act right now. The Fed's trying to thread that needle between cooling inflation further and not tipping the labor markets into sharp weaknesses. Kevin, what are your thoughts on that? Yeah, I mean I think this is a really great example uh for a lot of things where nobody really knows anything, right? So you're you're hearing different uh different comments from different Fed governors. Um it it seems like there might be some dissension. Uh but look, it's it's like anytime you you see anyone on TV, including me, no one knows anything for sure, except maybe Andy. Andy might know something, so we should listen. >> No idea, Kevin. I have no idea. With with all these opinions, I would say that look, this is how the Fed communicates, right? They communicate through a kind of a a spectrum of opinion. Uh looking at the averages from the dot plots, it still seems like it'll it'll be two cuts this year. Uh maybe a little less certain. I think we're going to get some numbers obviously coming out that that'll that'll help solidify that. But I mean, in the grand scheme of things, it looks like the Fed's going to work their way down to some sort of neutral rate. uh maybe somewhere in the mid3s, maybe sometime next year. And until until the story changes, that's probably, you know, what what the market's expecting. Um and I think the market's figured that out. >> Yeah, it's always hard to know, but I just want to remind our viewers today that, you know, if you have questions, concerns, and you want to do a free portfolio review, we have advisors that are fiduciaries that are only going to do the right thing for you both at Grimes and at one point. So, I'd like to go you to go to wealthon.com for a free portfolio review and you'll get experts to help you think through your own portfolio and your own financial plan. But let's move on to the next big story which is about new home sales. And you know, I know my son who lives in Denver is really in the market right now, firsttime home buyer. You know, what's he thinking right now? And how is his mom and dad helping him? But in August, sales of newly built homes in the US rose 20% compared to July, which was much larger than expected. This has been the highest level since January of 2022. Existing home sales for August, though, were compared to July were flat. And existing home sales counted based on closing, so people who are signing deals in June and July. New home sales counted on people shopping for a home in August and signing deals. So, you know, this new home sales is somewhat surprising because what we've seen, home builder sentiment has been muted. And this is all before the drops in the 30-year mortgage rate this month. But some economists may think this is a oneoff situation. So, you know, people like my son, others that are in this market, you know, Kevin, do you agree this is a one-time situation or how do you think this may impact the softening labor market that would factor into this? >> Yeah, look, economic numbers are noisy, right? Uh the jump we saw um in new home sales reported yesterday, from my understanding, that was largely concentrated in one region in the south. So, yes, it seems like it could be a little bit of noise. Uh today we got existing home sales in the existing home sales market. Think about it as it's like seven times the size of new home sales. So um they were in line. So it suggests the the new home sales number was was a little bit noisy. Um but that said the economic numbers even this morning were very strong. Uh we had durable goods were stronger for the second month. GDP revised higher uh for the second quarter. I mean it's ancient history now, but you're talking 3.8% % compared to I think it was 3.3 what the old number was. Um so the point is you know you made the the connection uh between rates mortgage rates labor markets uh and like most things in the world of economics these things are all it's all circular logic right so so last month we had uh we had weaker employment that put you know brought rates down lower mortgage rates that helps housing because of lower financing costs maybe it hurts on the margin because people you know are less employed you know Now, we're starting to see some better economic numbers like this morning. Um, that could potentially mean higher rates, which could potentially mean higher mortgage rates. And so, then you have kind of the the double-edged sword that, you know, that that hurts because um higher mortgage rates make it more expensive, but it helps because a stronger economy. So, yeah, these things kind of keep each other in check a little bit. >> And Terry, I I would separate out existing home sales from new home sales. New home sales mean brand new built homes. And so if they've built a lot of new homes, lower interest rates, a lot of first-time home buyers can afford these homes and the prices have gone up a lot. So dropping rates is quite helpful. Existing home sales means people who've already lived in homes who are selling those houses and obviously they've got mortgages that are in the two or three maybe 4% levels. But most are locked in for 30 years at three or 4%. And even with a declining in mortgage rate at five and three/4ers or six, you're still going to increase your interest rate cost by 50%. And so that's what the problem is. There's not a lot of supply. And people who are in homes can't afford to uptrade because the cost of a new mortgage would be a lot higher. And that's what's an interesting dilemma here is there's just not a lot of supply. And so people are really trapped in their homes. And I mean that in an elegant way because they can't afford even to move to an existing home that's the same price with a new mortgage because you can't take your mortgage with you. And so what you have is a just a startling low level of inventory. And so when there are new homes that is most affected by a drop in rates, but there's just not enough supply at reasonable prices to offset what is the increased cost of the mortgage compared to where people are today. >> Yeah. It'd be nice if you could take that mortgage with you, wouldn't it be? But not possible for our viewers. But, you know, I I think about our viewers and their age and life stage. And some of them are going to be asking, you know, what should I be thinking about if I could, you know, actually buy a home? Stress testing that decision, thinking about cash flows and affordability under different rate paths. So, you know, Andy, can you help us think through in a stress test position rising rates, flat rates, or declining rates? What should our viewers be thinking about? >> Well, I think that um interest rates on the mortgage side have definitely come down in the last couple months. Probably done coming down because those mortgage rates are are much more tied to the longer tenure than they are to, you know, whatever the f Fed funds rates are. Um it is interesting to think about if you think the trend is down over the next several years. um an adjustable rate, a seven-year arm, you know, getting a fixed mortgage for seven years um and then adjusting up, you know, could be attractive. Um so we are having some of those conversations. Um and we we certainly would never have that conversation when mortgage money was at, you know, three I mean some at two and a half or you know up to 4%. So I think that is uh becoming much more invogue and I think that's more the refinancing we're seeing. Um, we I talked to Peter Bookform, my CIO, this morning about the the um the new uh housing numbers and it seems to be a one-off. As Kevin said, it's a lot of noise. It does seem to be kind of one-off. Um, so we do think it's a lot of noise as well. We're not thinking that that really is indicative of anything. >> Yeah. You know, the ARM certainly the adjustable rate mortgage certainly plays a role, but I think about viewers and if they are going to go with an ARM um because they think they'll be in the house maybe, you know, not for a long time. uh but you know if in fact rates rise your payments could go up to 15 to 20% and so it's just making sure your budget can withstand that worst case scenario if you do decide to do that. So just keeping that in mind. Um but let's move on now to our third story and and this is Joe alluded to this earlier but um there are some economists that have some unconventional economic indicators of what they think will start to provide the health of the economy. So some people actually follow something called the sales of cardboard boxes. So why does this even come up or what why does this make sense? Well, the vast majority of non-durable goods we buy are packed and shipped in carton. So, rising or falling demand of boxes can give us an idea of how companies are certainly projecting future sales. So, to give you an example, during the pandemic, the demand of cardboard boxes was so high that it caused paper shortages due to the surge of online shopping. And Joe, I know your three daughters were number one, two, and three in that list of the people who purchased the most. So, um, thank you to them for keeping our economy going. But this trend right now is reversing. The US box shipments have fell to its lowest second quarter reading since 2015. International Paper Company, one of those big paper companies in Wisconsin, one of the largest pulp and paper companies, also announced last month that it was permanently closing its container mills in the US. With these closures, the US will will have a reduced 9% of its production in eight months of cardboard boxes, roughly twice the capacity lost during the '09 recession. So, you know, this is a more than I've ever known about cardboard boxes in my life. But Kevin, you know, I'd love to know what you think. Is this an indicator and what it might be suggesting for the economy now? >> Yeah. I mean, it's a good anecdotal point and it would suggest obviously a weakening in the economy. So, I mean, when I saw this headline, you know, it was eye opening and I asked my uh research director, Ben Wallace, to take a look at this. Ben's been on this show a couple times and you know, he came back saying there's basically three main companies that do all of the cardboard boxes. It's International Paper. That's the one you mentioned. Uh Smurfett, WestRock, and then Packaging Corp. of America. And I guess of the three, Packaging Corp is the premier company. They got their act together. Um they got their margins in place. They've been more disciplined. Uh better factories. They're doing great. The other two, including International Paper, you know, have old factories. They basically need to either be shut down or upgraded. And uh to upgrade these, it's not it's not an easy thing. it would probably cost hundreds of millions of dollars to upgrade these factories. So I think I think that there's some noise coming from the fact that these two companies are are trying to figure out what they can do to increase uh profitability and honestly for international paper the you know cutting production was was the road to that. So so that's where the headline came from. So it's obviously it's an interesting data point. Um it's certainly a headline grabber. I read I I jumped in and read it. Um, but for now, uh, I would take it with a grain of salt and and, uh, and and look focus in on some of the other economic numbers. >> And Terry, I'd point out the economy is not what it used to be 20 or 30 years ago. We are a services economy. And anyone who's booked a hotel room or a flight or gone out to dinner, none of which comes in a box, uh, has noticed a huge escalation in price. Well, guess what? The amount of our dollars that are going towards services is exponentially higher. And I have three daughters. We have just as many boxes. But I also know they spend a lot of money doing their nails and going to the yoga studio, doing the the stuff we all do as humans to consume. And the US economy is much more about services now than products. And the box indicator then is not just an indicator of slower economy, but it's also a shift in priorities. And we've seen that happening since the pandemic when we're all locked up and buying lots of stuff. Well, everyone has lots of stuff now. And what they want are a lot of experiences. And so there's been a shifting in the dollar flow. And you're also seeing the inflation really show up in where we spend money. So again, I was just shocked. My my youngest daughter unfortunately turned 18 yesterday and we went out to dinner. I couldn't believe what it cost to go to an Italian restaurant and has some pizza and some pasta, you know, but everyone's experiencing that sticker shock and that's not measured in boxes. >> That's right. That mozzarella cheese is way up. I agree. Um, but hey guys, I this is a surprise question a little bit for these guys because these are the only people on this show right now that can answer this, but there was another economic indicator that was used in the past. And you did you guys know about this? It's called the men's underwear index and it starts to tell a story that basically um you know this is a discretionary purchase for men. Maybe you guys could shed some light on that. But they they actually postpone postponed buying underwear um while their economy is unstable. So Greenspan evidently looked at this and I'm not kidding. Look it up sometime. So tell me guys, how's your underwear buying going lately? >> Mine's going great because my wife buys mine. So I don't I don't even know where I get them from. I just know they show up. So somebody tells me I need a new pair. They can >> This is so funny. I I have a client uh he's an older gentleman. He's he's a father of he's the father of a good friend of mine and he he would always say you gotta watch the price of Hannes because if if you see the price of Hannes going down that's a precursor to the economy because the first thing anyone cuts is buying new underwear because no one can see it. >> All right, Andy, any thoughts? >> Yeah, I would just Well, I'm a Tommy John guy and I can't and I can't believe how much money I spend on underwear. >> All right. Well, based on the three of you, I'm not sure this is a good economic indicator for us, but thank you for sharing uh on this topic with about 10,000 viewers. So, thank you. All right. Now, let's go into our big topic, which has to do with changing rules concerning catch-up contributions for 401k accounts, which were finalized by the IRS uh this month. So, I'm just going to go over a couple stats. These rules apply to those employees who are 50 and older. That may be some of our viewers who are considered high earners. And by high earner means a salary of more than 145,000. In 2027, these workers must put these catchup contributions into a Roth 401k, which means they are in an after tax dollars. But some of the plans could make changes as soon as next year. As a result, these workers could potentially lose out on tax deductions, becoming disqualified from other tax breaks or push workers into higher tax brackets. However, these workers don't have access to a Roth 401k. They will not be able to make these catchup contributions at all. So, this is this is a pretty big change coming. And Andy, our first question for you is Ben in Minnesota asks, "If I lose the tax deduction for these ketchup contributions, what other options do I have to offset this tax?" >> I mean, if you're a W2 employee, I mean, if you're itemizing, obviously charitable, you know, contributions, you might think of uh using highly appreciated assets for that purpose. um because what you're talking about is the amount of money that you're losing on the uh you know on the catchup, but there's not a whole lot of other, you know, deductible, you know, um you know, strategies for a W2 employee. You know, obviously for people that are self-employed, there's other options, but I would say not a whole lot to do here. >> Well, you could you could if you have a a flexible savings account, the FSAs for health plan, you know, I don't think that's been affected. So you could max that out if you're not already doing that. Um that would be one other suggestion perhaps. >> Yeah, the flexible spending account um that that Joe mentioned, FSA or HSA, the health savings account, that might be an area where you could get the tax breaks. But our next question is for you, Kevin. Denise in Oregon asks, "My company doesn't even offer the Roth 401k yet. What does she do?" I'm not a tax expert uh but I did uh reference a piece uh written recently by my financial planning team and if I remember correctly um all company retirement plans are are going to have to comply with the act as up sometime in 2026. Um the rule requires that highly paid employees who wish to make the catchup contributions have to make them as a Roth contribution. Um, but I don't believe that it requires a company to have a Roth 401k plan. So, if a company decided not to have a Roth 401k option, then nobody uh no highly paid employees would be able to make a catch-up contribution. So I guess you know to answer your question uh Denise that um there is a chance that you wouldn't be able to make that uh that catchup contribution but if you can't then nobody can and it would be in in the I guess in in incentivized to make sure that that can happen. So it's in their self-interest too. >> If the CEO and the entire executive team can't do it they probably will do something to get that available. I did want to highlight there is one advantage to the Roth which is once you've contributed you take your money out tax-free. So, so again there's there's some bad to it which is you don't get to deduct pre-tax dollars into the plan but you also get to take it out after it's appreciated. So there is some benefit over time of having a Roth instead of a regular 401k >> and that might be beneficial for our younger viewers who may be lower incomes now and higher incomes later. So that that would you definitely want to take advantage of that. But Andy, I've got a last question from Derek in Louisiana. This is more on retirement in general. He writes, "What's the best way to manage required minimum distributions so I'm not hit with huge taxes later?" >> So, I'm assuming that um that Derek is talking about having maybe a very very large 401k plan. So, his required minimum minimum distributions at 73, although it'll be later when he gets the to to that age because it'll be at higher age limit. Um, so that if I am only in a regular 401k plan and then my RMD, that's all taxable. What Joe was just saying, one of the interesting things about using a combination of Roth and a regular uh regular deductible contributions are that, you know, you can sort of game plan if you go forward and make some assumptions. How much money will you have in the future? Uh, and then those distributions will be taxable. And so you might want to have uh you know this additional catch up being a Roth because that will not be taxable because those distributions come out taxree. Um typically though it's really just a tax arbitrage. If somebody's making less money or paying less tax today and they think they'll pay more tax on that in the future, then you're better off doing the Roth. If you think you're paying more taxes today than you will on a distribution in the future, you're better off taking the deductible uh you the deductible 40k contribution. I mean, no one knows what taxes are going to be. Some people might think that the way the the country is going and, you know, the way the spending and deficits are going, maybe taxes will have to go up to pay for these things. So, you know, Roths might make sense. But I do think the one place where Roths are interesting is maybe if you have two income earners and they're high income earners, we know we're going to have a lot of money in these IAS, 401ks, ultimate IRA rollovers with requirement of distributions. it would be interesting to have a component of that being Roth so that it it makes the taxable portion smaller and then therefore reduces the tax on that RMD. So, you know, trying to balance those out, I think can uh can be helpful there. >> And I think balancing out really requires the help of an advisor or fiduciary. So, I just want to remind our viewers again, go to wealthon.com, do a free portfolio review, and then you'll have an adviser to help you think through the RMD process, the required minimum distribution process. Let's move on to our three stories that we're going to watch next week. We'll be getting some new employment numbers this week. Jolts, ADP, and the BLS report. Kevin, what are you expecting? >> Yeah, next week's employment week. Uh the big one is going to be the actual employment report on Friday. Um you know, so with all these numbers, who knows? I don't know what the numbers are going to be, but uh I would watch out for the old good news is bad news scenario. So, you know, remember that the market has been happy over the last month in particular because of expected rate cuts. If you it's if you see the unemployment uh situation, all these numbers come out next week uh stronger, then that that means a stronger economy, which means that there's less of a need to cut rates. Uh maybe we won't get two rate cut two more rate cuts this year. Uh so we could actually see yields move higher if the unemployment number is better and the market wouldn't like that. So thus you could have the old good news is bad news. I'd watch out for that. >> Next we'll have the manufacturing PMI and ISM readings. Andy, if we see a contractionary reading, should that tilt people more towards defensive or towards safe income place? >> Well, I mean it's sort of the opposite of what Kevin was just saying that will be helpful, you know, for the Fed. It'll give them a little bit of the ammunition to lower rates. So I think that'll be probably constructive for the market. Um, look, we, you know, we started the conversation, uh, earlier just talking about where we think everything is. We do think that the S&P, not only is it, um, a little pricey, but what we're more concerned about is how concentrated it is. And so, we would probably lean more toward adding some safer, maybe less correlated assets. Can I just highlight, Terry, if you go back to 1998, 1999, it really helped to not have your concentrated bets on the top top nifty stocks that drove the stock market. And uh and in fact, in 2000 when we had a pretty substantial 50% drop in the NASDAQ, which was led by all the internet names, you did fine if you're in the Dow 30. And so you're in a time right now where the valuations for health care stocks and financials are still within the bounds of reasonable and then you have some stocks that are so expensive relative to earnings that it's very hard to justify. Now the truth is there's a lot a lot of optimism price in because there's a lot of good things happening with AI and several other things but but it's priced to perfection. So if something goes sideways and we are in a dangerous time in the market here. October is traditionally a a a come you know a market adjustment period time that doesn't mean it's going to go down but you should expect some volatility and at least make sure that your allocation can withstand a decline even if it's temporary that's not going to cause you to to move for the hills. So as we always say make sure you rebalance in advance before you have the correction and this is a good time to do it. We're only a percent or two from the highs. Make sure that you're allocated appropriately for whatever might come. >> Yeah, that's always a good reminder, Joe. Thank you. And we're going to also have the services PMI and ISM rating. And Kevin, do you think this market should be paying closer attention to these services right now or goods? >> I mean, look, Joe touched on this earlier, right? Services are a much bigger part of the economy than than manufacturing. Um the services are obviously they're a little more stable as well. Uh they're less disrupted by tariffs. So they're probably a cleaner look through. Um look, the ser the services surveys are running about you know a point or so ahead of the manufacturing surveys or they have been uh both of which have been above 50 which is the the line in the sand above 50 is expansion. Below 50 for these surveys is contraction. So, I don't know. I I would expect uh I would expect both to be above 50. Um maybe maybe showing signs of uh slow expansion next week. Um and I know I know we're we're running out of time, but Terry, if we if we had a minute, I just I I I could share some fun with numbers if you're if if >> Let's do it. >> I'm always up for some fun. >> All right. So, I just I noticed this last week. I I you know I go through all my charts on on Saturdays and and and you know you know making sure everything still makes sense. And so on on uh on on Friday we hit the level in the S&P 500 of 6,664. So 6664. I was like that number sounds familiar. And I remember back in uh in the the throngs of the global financial crisis that the S&P 500 bottomed out intraday at 666 on >> I remember that actually. I remember that well. >> Those were good days. That was when we were worried about like money markets failing and things like that. So uh anyways, it's been a long strange trip since then. We're 10x 10x from the bottom. So to kind of wrap it all together, I mean it's been a great it's been a great run. there's been a lot of stimulus that's been I think responsible for a huge amount of that move and and then I was thinking I want to put that in context to the rest of the world you know what's what's been going on so I was looking at the developed foreign index I was looking at the the MSCIE index that's Europe Australasia and Far East common index everyone follows and from the bottom in the since the global financial crisis bottomed out uh in uh in 2009 uh we have less than 2x. So you have 10x for for S&P 500, less than two times for the EY index. And on not only that, but it's only a couple percentage points higher than its previous high back in 2007. So I mean basically the these numbers don't include dividends. It's not a total return number. It's simply a price number, but it makes for a fun comparison. And then I just threw on emerging markets, too. And they are still below the highs set in 2007. and the post uh COVID high set in um I think it was 2021 uh and only one and a half times uh off the global financial crisis bottom. So uh it's been just quite a number that 666 number kind of sticks in your head and um you know who knows maybe it's time for for a little bit of a pause in uh in this this March higher. It is amazing that the US has gone up in value five times more than the rest of the developed world and and almost eight times more than the emerging markets. That's pretty amazing. It shows you how we've recovered from those 2007 crisis numbers. So really amazing. Thanks Terry and thanks team. Really appreciate it. >> I think today was pretty special. We had two CEOs with us, a CFP, a CFA, and then Joe obviously always sharing his expertise as we he always tends to walk us down history lane. So, thank you so much for that. And Kevin, thank you again for that analysis at the end. I'll never look at 666 the same again. So, thank you to everyone for joining us today. We'd like to invite you back again next week. But before you do that, please go to wealthon.com, get a free portfolio review, talk to one of our fiduciary advisors. Also, send us comments, questions, anything that you want to make sure that we cover to help you manage your financial life even better. Thanks so much, Joe, and have a great week. >> Have a great day. Thanks everyone. Thanks, Abby. >> Thank you.
Powell Warns: Don’t Count on Rate Cuts | Rise UP!
Summary
Transcript
This is how the Fed communicates, right? They communicate through a kind of a a spectrum of opinion. Uh looking at the averages from the dot plots, still seems like it'll it'll be two cuts this year. Uh maybe a little less certain. I think we're going to get some numbers obviously coming out that that'll that'll help solidify that. But I mean, in the grand scheme of things, it looks like the Fed's going to work their way down to some sort of neutral rate. uh maybe somewhere in the mid3s, maybe sometime next year. And until until the story changes, that's probably, you know, what what the market's expecting. Um and I think the market's figured that out. [Music] [Applause] Welcome to Rise Up, where we take a look at this week's biggest stories out there, and we really help you understand them, make better decisions about growing and protecting your portfolio. Remember, our mission here at Rise Up is to make sure we bring you the very best wealth management experts, the best conversation, and the best advice from those who are working directly with clients each and every day through all the market changes. My name is Terry Coulsson and I'm a managing partner here at Rise Growth. I also am joined by my co-host Joe Duran, CIO at Rise Growth Partners. A >> Terry, how are you? >> Joe, I was just getting through all your recognition, but I'm doing great. >> I don't think we need to do it. What an amazing I mean, it's amazing. The market hit new highs again. Obviously, we've given back a little bit, but holy cow. We've got two rock stars with us today. So, I'm excited for you to introduce uh our two amazing guests who both CEOs of really big RAAS in the country. So, we're really thrilled to have them with us today. >> Yeah, we have the best of the best. We have Andy Schwarz who's the CEO from OnePoint. Welcome, welcome, Andy. And then we also have Kevin Grimes who's the CEO of Grimes and Company. So, welcome Kevin. It's great. >> Hey, Terry. How are you? Kevin's a CFA and uh oversees over $6 billion dollars in assets and many clients and obviously uh one point and Andy oversee over 12 billion dollars of assets. So they take care of people's lives and um we have a CFP and a CFA now so we can talk about investing as well as how it applies to your personal life. >> That's right. And Andy is a CFP too. So we've got plenty of acronyms to help us with these expert conversations. I will also say that, you know, we are moving into the fall now. We had a great summer moving into the fall. We're almost done with September. So, I think we've got a lot of very helpful information uh to share today. But before we do that, I want to just do a quick look at the S&P 500 closed down 0.5% at 6604. The Nasdaq composite also set it at 223 384. the Dow Jones Industrial SH about 173 points or well 38% to finish at 459. So, you know, not a lot happening, but certainly a lot going on this week. So, I'd like to just start out with Fed Chair Powell's remarks from Tuesday. He talked about the challenging situation ahead for policy makers. investors were looking to for two more quarter point cuts this year, but he said they're not necessarily guaranteed. Fed governors and presidents have given remarks as well. A narrow majority of 10 on the board support two or more cuts while the other seven, you know, don't necessarily support any more cuts or support rates going up. So, you know, there's it's a mixed bag of what's going to happen. None of us have a crystal ball, but Andy, you know, based on the where the markets are today, how are you thinking through the Fed's decision last week as Powell made his latest remarks? >> Well, I think the most interesting thing is they're lowering rates and the long end. Rates are creeping up. You know, yields were up yesterday and again today. Markets reacting to that. I think Pal's in a tough spot. You know, he's on one hand um you know, inflation's still around 3% and tariff situation is still a bit uncertain. So there is some concerns that inflation, you know, could be sticky and maybe even slightly worse. But on the other hand, they're looking at data on jobs. You know, the economy, things could be slowing. They don't want to be too late to cut, but at the same time, um, they don't want to fuel inflation. So, I think it's really difficult in the last couple of days. Also, a few voting members have made some comments. It looks pretty mixed. You know, I'm not sure whether they're going to cut two more times or not, but the reason the yields have gone up is because it was already baked in and the assumption was that there were going to be three or four cuts and it was almost assumed to be definite and now it's not. And so again, they can control the short end, but not necessarily. Terry, I know you're going to give a very good anecdote about uh Greenspan, but I thought that his speech, Pal's speech had a little bit of the unreasonable exuberance that uh that we heard in the late 90s from Greenspan that I I I think he's concerned that we are in bubbly territory in the stock market and certainly valuations for a lot of the names that have no earnings uh feel a little bit frothy. There are a lot of AI names that make a ton of money, but there's also a lot of stocks that are going up with very little more than just the idea that they might do something and that's a little bit scary. >> Yeah, I agree. You know, it's a really a balancing act right now. The Fed's trying to thread that needle between cooling inflation further and not tipping the labor markets into sharp weaknesses. Kevin, what are your thoughts on that? Yeah, I mean I think this is a really great example uh for a lot of things where nobody really knows anything, right? So you're you're hearing different uh different comments from different Fed governors. Um it it seems like there might be some dissension. Uh but look, it's it's like anytime you you see anyone on TV, including me, no one knows anything for sure, except maybe Andy. Andy might know something, so we should listen. >> No idea, Kevin. I have no idea. With with all these opinions, I would say that look, this is how the Fed communicates, right? They communicate through a kind of a a spectrum of opinion. Uh looking at the averages from the dot plots, it still seems like it'll it'll be two cuts this year. Uh maybe a little less certain. I think we're going to get some numbers obviously coming out that that'll that'll help solidify that. But I mean, in the grand scheme of things, it looks like the Fed's going to work their way down to some sort of neutral rate. uh maybe somewhere in the mid3s, maybe sometime next year. And until until the story changes, that's probably, you know, what what the market's expecting. Um and I think the market's figured that out. >> Yeah, it's always hard to know, but I just want to remind our viewers today that, you know, if you have questions, concerns, and you want to do a free portfolio review, we have advisors that are fiduciaries that are only going to do the right thing for you both at Grimes and at one point. So, I'd like to go you to go to wealthon.com for a free portfolio review and you'll get experts to help you think through your own portfolio and your own financial plan. But let's move on to the next big story which is about new home sales. And you know, I know my son who lives in Denver is really in the market right now, firsttime home buyer. You know, what's he thinking right now? And how is his mom and dad helping him? But in August, sales of newly built homes in the US rose 20% compared to July, which was much larger than expected. This has been the highest level since January of 2022. Existing home sales for August, though, were compared to July were flat. And existing home sales counted based on closing, so people who are signing deals in June and July. New home sales counted on people shopping for a home in August and signing deals. So, you know, this new home sales is somewhat surprising because what we've seen, home builder sentiment has been muted. And this is all before the drops in the 30-year mortgage rate this month. But some economists may think this is a oneoff situation. So, you know, people like my son, others that are in this market, you know, Kevin, do you agree this is a one-time situation or how do you think this may impact the softening labor market that would factor into this? >> Yeah, look, economic numbers are noisy, right? Uh the jump we saw um in new home sales reported yesterday, from my understanding, that was largely concentrated in one region in the south. So, yes, it seems like it could be a little bit of noise. Uh today we got existing home sales in the existing home sales market. Think about it as it's like seven times the size of new home sales. So um they were in line. So it suggests the the new home sales number was was a little bit noisy. Um but that said the economic numbers even this morning were very strong. Uh we had durable goods were stronger for the second month. GDP revised higher uh for the second quarter. I mean it's ancient history now, but you're talking 3.8% % compared to I think it was 3.3 what the old number was. Um so the point is you know you made the the connection uh between rates mortgage rates labor markets uh and like most things in the world of economics these things are all it's all circular logic right so so last month we had uh we had weaker employment that put you know brought rates down lower mortgage rates that helps housing because of lower financing costs maybe it hurts on the margin because people you know are less employed you know Now, we're starting to see some better economic numbers like this morning. Um, that could potentially mean higher rates, which could potentially mean higher mortgage rates. And so, then you have kind of the the double-edged sword that, you know, that that hurts because um higher mortgage rates make it more expensive, but it helps because a stronger economy. So, yeah, these things kind of keep each other in check a little bit. >> And Terry, I I would separate out existing home sales from new home sales. New home sales mean brand new built homes. And so if they've built a lot of new homes, lower interest rates, a lot of first-time home buyers can afford these homes and the prices have gone up a lot. So dropping rates is quite helpful. Existing home sales means people who've already lived in homes who are selling those houses and obviously they've got mortgages that are in the two or three maybe 4% levels. But most are locked in for 30 years at three or 4%. And even with a declining in mortgage rate at five and three/4ers or six, you're still going to increase your interest rate cost by 50%. And so that's what the problem is. There's not a lot of supply. And people who are in homes can't afford to uptrade because the cost of a new mortgage would be a lot higher. And that's what's an interesting dilemma here is there's just not a lot of supply. And so people are really trapped in their homes. And I mean that in an elegant way because they can't afford even to move to an existing home that's the same price with a new mortgage because you can't take your mortgage with you. And so what you have is a just a startling low level of inventory. And so when there are new homes that is most affected by a drop in rates, but there's just not enough supply at reasonable prices to offset what is the increased cost of the mortgage compared to where people are today. >> Yeah. It'd be nice if you could take that mortgage with you, wouldn't it be? But not possible for our viewers. But, you know, I I think about our viewers and their age and life stage. And some of them are going to be asking, you know, what should I be thinking about if I could, you know, actually buy a home? Stress testing that decision, thinking about cash flows and affordability under different rate paths. So, you know, Andy, can you help us think through in a stress test position rising rates, flat rates, or declining rates? What should our viewers be thinking about? >> Well, I think that um interest rates on the mortgage side have definitely come down in the last couple months. Probably done coming down because those mortgage rates are are much more tied to the longer tenure than they are to, you know, whatever the f Fed funds rates are. Um it is interesting to think about if you think the trend is down over the next several years. um an adjustable rate, a seven-year arm, you know, getting a fixed mortgage for seven years um and then adjusting up, you know, could be attractive. Um so we are having some of those conversations. Um and we we certainly would never have that conversation when mortgage money was at, you know, three I mean some at two and a half or you know up to 4%. So I think that is uh becoming much more invogue and I think that's more the refinancing we're seeing. Um, we I talked to Peter Bookform, my CIO, this morning about the the um the new uh housing numbers and it seems to be a one-off. As Kevin said, it's a lot of noise. It does seem to be kind of one-off. Um, so we do think it's a lot of noise as well. We're not thinking that that really is indicative of anything. >> Yeah. You know, the ARM certainly the adjustable rate mortgage certainly plays a role, but I think about viewers and if they are going to go with an ARM um because they think they'll be in the house maybe, you know, not for a long time. uh but you know if in fact rates rise your payments could go up to 15 to 20% and so it's just making sure your budget can withstand that worst case scenario if you do decide to do that. So just keeping that in mind. Um but let's move on now to our third story and and this is Joe alluded to this earlier but um there are some economists that have some unconventional economic indicators of what they think will start to provide the health of the economy. So some people actually follow something called the sales of cardboard boxes. So why does this even come up or what why does this make sense? Well, the vast majority of non-durable goods we buy are packed and shipped in carton. So, rising or falling demand of boxes can give us an idea of how companies are certainly projecting future sales. So, to give you an example, during the pandemic, the demand of cardboard boxes was so high that it caused paper shortages due to the surge of online shopping. And Joe, I know your three daughters were number one, two, and three in that list of the people who purchased the most. So, um, thank you to them for keeping our economy going. But this trend right now is reversing. The US box shipments have fell to its lowest second quarter reading since 2015. International Paper Company, one of those big paper companies in Wisconsin, one of the largest pulp and paper companies, also announced last month that it was permanently closing its container mills in the US. With these closures, the US will will have a reduced 9% of its production in eight months of cardboard boxes, roughly twice the capacity lost during the '09 recession. So, you know, this is a more than I've ever known about cardboard boxes in my life. But Kevin, you know, I'd love to know what you think. Is this an indicator and what it might be suggesting for the economy now? >> Yeah. I mean, it's a good anecdotal point and it would suggest obviously a weakening in the economy. So, I mean, when I saw this headline, you know, it was eye opening and I asked my uh research director, Ben Wallace, to take a look at this. Ben's been on this show a couple times and you know, he came back saying there's basically three main companies that do all of the cardboard boxes. It's International Paper. That's the one you mentioned. Uh Smurfett, WestRock, and then Packaging Corp. of America. And I guess of the three, Packaging Corp is the premier company. They got their act together. Um they got their margins in place. They've been more disciplined. Uh better factories. They're doing great. The other two, including International Paper, you know, have old factories. They basically need to either be shut down or upgraded. And uh to upgrade these, it's not it's not an easy thing. it would probably cost hundreds of millions of dollars to upgrade these factories. So I think I think that there's some noise coming from the fact that these two companies are are trying to figure out what they can do to increase uh profitability and honestly for international paper the you know cutting production was was the road to that. So so that's where the headline came from. So it's obviously it's an interesting data point. Um it's certainly a headline grabber. I read I I jumped in and read it. Um, but for now, uh, I would take it with a grain of salt and and, uh, and and look focus in on some of the other economic numbers. >> And Terry, I'd point out the economy is not what it used to be 20 or 30 years ago. We are a services economy. And anyone who's booked a hotel room or a flight or gone out to dinner, none of which comes in a box, uh, has noticed a huge escalation in price. Well, guess what? The amount of our dollars that are going towards services is exponentially higher. And I have three daughters. We have just as many boxes. But I also know they spend a lot of money doing their nails and going to the yoga studio, doing the the stuff we all do as humans to consume. And the US economy is much more about services now than products. And the box indicator then is not just an indicator of slower economy, but it's also a shift in priorities. And we've seen that happening since the pandemic when we're all locked up and buying lots of stuff. Well, everyone has lots of stuff now. And what they want are a lot of experiences. And so there's been a shifting in the dollar flow. And you're also seeing the inflation really show up in where we spend money. So again, I was just shocked. My my youngest daughter unfortunately turned 18 yesterday and we went out to dinner. I couldn't believe what it cost to go to an Italian restaurant and has some pizza and some pasta, you know, but everyone's experiencing that sticker shock and that's not measured in boxes. >> That's right. That mozzarella cheese is way up. I agree. Um, but hey guys, I this is a surprise question a little bit for these guys because these are the only people on this show right now that can answer this, but there was another economic indicator that was used in the past. And you did you guys know about this? It's called the men's underwear index and it starts to tell a story that basically um you know this is a discretionary purchase for men. Maybe you guys could shed some light on that. But they they actually postpone postponed buying underwear um while their economy is unstable. So Greenspan evidently looked at this and I'm not kidding. Look it up sometime. So tell me guys, how's your underwear buying going lately? >> Mine's going great because my wife buys mine. So I don't I don't even know where I get them from. I just know they show up. So somebody tells me I need a new pair. They can >> This is so funny. I I have a client uh he's an older gentleman. He's he's a father of he's the father of a good friend of mine and he he would always say you gotta watch the price of Hannes because if if you see the price of Hannes going down that's a precursor to the economy because the first thing anyone cuts is buying new underwear because no one can see it. >> All right, Andy, any thoughts? >> Yeah, I would just Well, I'm a Tommy John guy and I can't and I can't believe how much money I spend on underwear. >> All right. Well, based on the three of you, I'm not sure this is a good economic indicator for us, but thank you for sharing uh on this topic with about 10,000 viewers. So, thank you. All right. Now, let's go into our big topic, which has to do with changing rules concerning catch-up contributions for 401k accounts, which were finalized by the IRS uh this month. So, I'm just going to go over a couple stats. These rules apply to those employees who are 50 and older. That may be some of our viewers who are considered high earners. And by high earner means a salary of more than 145,000. In 2027, these workers must put these catchup contributions into a Roth 401k, which means they are in an after tax dollars. But some of the plans could make changes as soon as next year. As a result, these workers could potentially lose out on tax deductions, becoming disqualified from other tax breaks or push workers into higher tax brackets. However, these workers don't have access to a Roth 401k. They will not be able to make these catchup contributions at all. So, this is this is a pretty big change coming. And Andy, our first question for you is Ben in Minnesota asks, "If I lose the tax deduction for these ketchup contributions, what other options do I have to offset this tax?" >> I mean, if you're a W2 employee, I mean, if you're itemizing, obviously charitable, you know, contributions, you might think of uh using highly appreciated assets for that purpose. um because what you're talking about is the amount of money that you're losing on the uh you know on the catchup, but there's not a whole lot of other, you know, deductible, you know, um you know, strategies for a W2 employee. You know, obviously for people that are self-employed, there's other options, but I would say not a whole lot to do here. >> Well, you could you could if you have a a flexible savings account, the FSAs for health plan, you know, I don't think that's been affected. So you could max that out if you're not already doing that. Um that would be one other suggestion perhaps. >> Yeah, the flexible spending account um that that Joe mentioned, FSA or HSA, the health savings account, that might be an area where you could get the tax breaks. But our next question is for you, Kevin. Denise in Oregon asks, "My company doesn't even offer the Roth 401k yet. What does she do?" I'm not a tax expert uh but I did uh reference a piece uh written recently by my financial planning team and if I remember correctly um all company retirement plans are are going to have to comply with the act as up sometime in 2026. Um the rule requires that highly paid employees who wish to make the catchup contributions have to make them as a Roth contribution. Um, but I don't believe that it requires a company to have a Roth 401k plan. So, if a company decided not to have a Roth 401k option, then nobody uh no highly paid employees would be able to make a catch-up contribution. So I guess you know to answer your question uh Denise that um there is a chance that you wouldn't be able to make that uh that catchup contribution but if you can't then nobody can and it would be in in the I guess in in incentivized to make sure that that can happen. So it's in their self-interest too. >> If the CEO and the entire executive team can't do it they probably will do something to get that available. I did want to highlight there is one advantage to the Roth which is once you've contributed you take your money out tax-free. So, so again there's there's some bad to it which is you don't get to deduct pre-tax dollars into the plan but you also get to take it out after it's appreciated. So there is some benefit over time of having a Roth instead of a regular 401k >> and that might be beneficial for our younger viewers who may be lower incomes now and higher incomes later. So that that would you definitely want to take advantage of that. But Andy, I've got a last question from Derek in Louisiana. This is more on retirement in general. He writes, "What's the best way to manage required minimum distributions so I'm not hit with huge taxes later?" >> So, I'm assuming that um that Derek is talking about having maybe a very very large 401k plan. So, his required minimum minimum distributions at 73, although it'll be later when he gets the to to that age because it'll be at higher age limit. Um, so that if I am only in a regular 401k plan and then my RMD, that's all taxable. What Joe was just saying, one of the interesting things about using a combination of Roth and a regular uh regular deductible contributions are that, you know, you can sort of game plan if you go forward and make some assumptions. How much money will you have in the future? Uh, and then those distributions will be taxable. And so you might want to have uh you know this additional catch up being a Roth because that will not be taxable because those distributions come out taxree. Um typically though it's really just a tax arbitrage. If somebody's making less money or paying less tax today and they think they'll pay more tax on that in the future, then you're better off doing the Roth. If you think you're paying more taxes today than you will on a distribution in the future, you're better off taking the deductible uh you the deductible 40k contribution. I mean, no one knows what taxes are going to be. Some people might think that the way the the country is going and, you know, the way the spending and deficits are going, maybe taxes will have to go up to pay for these things. So, you know, Roths might make sense. But I do think the one place where Roths are interesting is maybe if you have two income earners and they're high income earners, we know we're going to have a lot of money in these IAS, 401ks, ultimate IRA rollovers with requirement of distributions. it would be interesting to have a component of that being Roth so that it it makes the taxable portion smaller and then therefore reduces the tax on that RMD. So, you know, trying to balance those out, I think can uh can be helpful there. >> And I think balancing out really requires the help of an advisor or fiduciary. So, I just want to remind our viewers again, go to wealthon.com, do a free portfolio review, and then you'll have an adviser to help you think through the RMD process, the required minimum distribution process. Let's move on to our three stories that we're going to watch next week. We'll be getting some new employment numbers this week. Jolts, ADP, and the BLS report. Kevin, what are you expecting? >> Yeah, next week's employment week. Uh the big one is going to be the actual employment report on Friday. Um you know, so with all these numbers, who knows? I don't know what the numbers are going to be, but uh I would watch out for the old good news is bad news scenario. So, you know, remember that the market has been happy over the last month in particular because of expected rate cuts. If you it's if you see the unemployment uh situation, all these numbers come out next week uh stronger, then that that means a stronger economy, which means that there's less of a need to cut rates. Uh maybe we won't get two rate cut two more rate cuts this year. Uh so we could actually see yields move higher if the unemployment number is better and the market wouldn't like that. So thus you could have the old good news is bad news. I'd watch out for that. >> Next we'll have the manufacturing PMI and ISM readings. Andy, if we see a contractionary reading, should that tilt people more towards defensive or towards safe income place? >> Well, I mean it's sort of the opposite of what Kevin was just saying that will be helpful, you know, for the Fed. It'll give them a little bit of the ammunition to lower rates. So I think that'll be probably constructive for the market. Um, look, we, you know, we started the conversation, uh, earlier just talking about where we think everything is. We do think that the S&P, not only is it, um, a little pricey, but what we're more concerned about is how concentrated it is. And so, we would probably lean more toward adding some safer, maybe less correlated assets. Can I just highlight, Terry, if you go back to 1998, 1999, it really helped to not have your concentrated bets on the top top nifty stocks that drove the stock market. And uh and in fact, in 2000 when we had a pretty substantial 50% drop in the NASDAQ, which was led by all the internet names, you did fine if you're in the Dow 30. And so you're in a time right now where the valuations for health care stocks and financials are still within the bounds of reasonable and then you have some stocks that are so expensive relative to earnings that it's very hard to justify. Now the truth is there's a lot a lot of optimism price in because there's a lot of good things happening with AI and several other things but but it's priced to perfection. So if something goes sideways and we are in a dangerous time in the market here. October is traditionally a a a come you know a market adjustment period time that doesn't mean it's going to go down but you should expect some volatility and at least make sure that your allocation can withstand a decline even if it's temporary that's not going to cause you to to move for the hills. So as we always say make sure you rebalance in advance before you have the correction and this is a good time to do it. We're only a percent or two from the highs. Make sure that you're allocated appropriately for whatever might come. >> Yeah, that's always a good reminder, Joe. Thank you. And we're going to also have the services PMI and ISM rating. And Kevin, do you think this market should be paying closer attention to these services right now or goods? >> I mean, look, Joe touched on this earlier, right? Services are a much bigger part of the economy than than manufacturing. Um the services are obviously they're a little more stable as well. Uh they're less disrupted by tariffs. So they're probably a cleaner look through. Um look, the ser the services surveys are running about you know a point or so ahead of the manufacturing surveys or they have been uh both of which have been above 50 which is the the line in the sand above 50 is expansion. Below 50 for these surveys is contraction. So, I don't know. I I would expect uh I would expect both to be above 50. Um maybe maybe showing signs of uh slow expansion next week. Um and I know I know we're we're running out of time, but Terry, if we if we had a minute, I just I I I could share some fun with numbers if you're if if >> Let's do it. >> I'm always up for some fun. >> All right. So, I just I noticed this last week. I I you know I go through all my charts on on Saturdays and and and you know you know making sure everything still makes sense. And so on on uh on on Friday we hit the level in the S&P 500 of 6,664. So 6664. I was like that number sounds familiar. And I remember back in uh in the the throngs of the global financial crisis that the S&P 500 bottomed out intraday at 666 on >> I remember that actually. I remember that well. >> Those were good days. That was when we were worried about like money markets failing and things like that. So uh anyways, it's been a long strange trip since then. We're 10x 10x from the bottom. So to kind of wrap it all together, I mean it's been a great it's been a great run. there's been a lot of stimulus that's been I think responsible for a huge amount of that move and and then I was thinking I want to put that in context to the rest of the world you know what's what's been going on so I was looking at the developed foreign index I was looking at the the MSCIE index that's Europe Australasia and Far East common index everyone follows and from the bottom in the since the global financial crisis bottomed out uh in uh in 2009 uh we have less than 2x. So you have 10x for for S&P 500, less than two times for the EY index. And on not only that, but it's only a couple percentage points higher than its previous high back in 2007. So I mean basically the these numbers don't include dividends. It's not a total return number. It's simply a price number, but it makes for a fun comparison. And then I just threw on emerging markets, too. And they are still below the highs set in 2007. and the post uh COVID high set in um I think it was 2021 uh and only one and a half times uh off the global financial crisis bottom. So uh it's been just quite a number that 666 number kind of sticks in your head and um you know who knows maybe it's time for for a little bit of a pause in uh in this this March higher. It is amazing that the US has gone up in value five times more than the rest of the developed world and and almost eight times more than the emerging markets. That's pretty amazing. It shows you how we've recovered from those 2007 crisis numbers. So really amazing. Thanks Terry and thanks team. Really appreciate it. >> I think today was pretty special. We had two CEOs with us, a CFP, a CFA, and then Joe obviously always sharing his expertise as we he always tends to walk us down history lane. So, thank you so much for that. And Kevin, thank you again for that analysis at the end. I'll never look at 666 the same again. So, thank you to everyone for joining us today. We'd like to invite you back again next week. But before you do that, please go to wealthon.com, get a free portfolio review, talk to one of our fiduciary advisors. Also, send us comments, questions, anything that you want to make sure that we cover to help you manage your financial life even better. Thanks so much, Joe, and have a great week. >> Have a great day. Thanks everyone. Thanks, Abby. >> Thank you.