The Great Re-Rating Has Begun

2022 has started out with a bang. Markets have been volatile, and many investors are looking for guidance. In this episode we discuss:

• January Jobs and Unemployment Numbers
• Latest Updates with Inflation
• Re-rating of large companies in US stock market
• Return of Market Volatility
• What can retirees do to prepare and plan for market volatility?

 

The Great Re-Rating Has Begun

Unedited Transcript: 

 Michael Baker  00:02

Welcome back to The Money Huddle. My name is Michael Baker, and I'm here with Ross Marynell. Ross 2022 is in full effect, man, it's been a ride.

Ross Marynell  00:44

It's Wow, we were off to the start. Well, it started. Right I guess we That's a fact. What a interesting time to be market participant in seeing this transition from 2021 to 2022. But hey, listen, it's good to be here. I'm excited. We are our podcasting again. And we have a lot of interesting topics to dive into today. 100%. To kick it off, we before we started recording, you were checking out today's job numbers and some of the revisions.

Michael Baker  01:16

So one of the things that's been you know, everyone's watching right now, like a hawk is anything that they can try from an economic standpoint, to get some sense of what the Fed is going to do. Now, one of the things that I have really appreciated about Powell and the Fed that he's you know, as he's been under the leader of the Fed, I guess we're the chair, they've, he's tried hard to communicate, communicate and kind of be transparent about what's going on. But this was interesting. So jobs report came out today, payrolls gained 467,000 jobs in January, despite, you know, all the stuff we've heard in the news about the omicron surge, and as I'm reading from this article, just kind of skimming through and CNBC, but this is what jumped out at me. So the number for January 467,000. That was higher than what they expected. However, it said, because it says that the expectation of the Dow Jones estimate was 150,000. So Big time, big time, gain over what the expectation was. But down a little further, it says this is what was interesting. December, had initially reported a gain of $199,000. Well, that number was revised up to 510k. November was 249k, that number was revised up to 647,000. So for two months, those two months, the initial counts that we were given, had been revised upwards by over 700,000. And then we had this beat today. So I mean, it, it may not feel like jobs are coming back. But the data is telling a different story. What are your thing? What are you thinking?

 Ross Marynell  02:58

Well, this is this is great news. If you have been listening to our podcast for a little while, one of the things we talked about is our recap of 2021 was just the changing job environment. And the job landscape, we had a lot of people retire maybe a year or two earlier than they may have otherwise expected to that took and opened up a couple of million extra jobs, two to 3 million extra jobs. Sure. And our labor participation rate has been down. And it has been down that still below the pre COVID labor participation rate numbers. But that gap is closing. That's a really important if we can get back to the pre COVID labor participation rate numbers. Now look, we have over 10 million open jobs. So there's a lot of work out there that needs to be filled still. Right. But this is the best possible news. I think we could have come from this jobs report, which it was a surprise we were actually expecting ADP was kind of expecting it may actually decline this way. Or maybe yeah, losses. They thought it only negative. Right. So not only do we get a big number today, we got big revisions going back the last couple of months. That's

Michael Baker  04:06

a trigger point about and to your point about the participation rate. In that same article, it says that the that rate, actually the labor force participation rate popped up point three percentage points, and now is back to its highest level since March 2020 is within 1.2 points of where it was before the pandemic. So Right. Obviously, we've created other problems for ourselves that don't just include the jobs market, but it looks like the jobs market has been coming back and is still there still remains, you know, significant openings for people who may want to reenter the labor force and look for work there. There's opportunities out there. So that's going to be that's a positive.

 Ross Marynell  04:50

Eye. That's it's fantastic again, and it's great to see hopefully we can continue to close that labor participation gap. Some of it can be explained from the early retirements We know that but still we are seeing people upgrade their work life, they're upgrading their income, they're finding maybe a better career path, great move around all you want. There's all this Josh jostling between jobs is, you know, has been happening for the last several months. But if people can ultimately get themselves to a better place, where they can make a more comfortable living a better higher income living, this is wonderful. So yes, will it push labor prices up? Maybe? I don't care. I'm just thrilled people are getting back to work.

Michael Baker  05:31

Well, you know, I mean, obviously, the counterbalance to that is, you know, well, what's going to happen with inflation, because, you know, as more and more people go back to work, if the job market gets tight, and there's, you know, competition for workers, you know, workers tend to have to be paid a little bit more money from a recruiting standpoint, and people can be concerned about that, how that's going to affect impact markets with inflation. And so what are we seeing right now as far as the current environment with inflation? And what are your thoughts about what we're going to see in the next

Ross Marynell  06:06

couple of weeks? So, as we have talked, internally, over the last couple of months, this has been a big conversation, right? We probably is good as the news was for the jobs today. And the revisions over the last couple of months, I think, is as bad as the inflation numbers going to be next month, which, you know, we'll see this come out here in the next few days, I think we're going to see a startling inflation number, right? The challenge is, this is I saw, I comb through a few different categories just to see what was happening in inflation. So I went back and look through changes in the consumer price index for food. So 2019, through 2022, right? We always talk about inflation, who does inflation hit? Well, it hits our lower income or middle income, you know, if you're a family of let's say, four, and you're looking at where does your dollar go, he goes nine different directions already. We know this, right? We live it 100%. So it goes to childcare, it goes to health care costs, it goes to food and gas, and then you want to go on vacation, and you want to have a life and you want to enjoy things. And so that money goes everywhere. And so when we see the essentials, like food, and energy costs go up, that eats into those other areas where people want to consume and spend for their enjoyment, versus just sustainability. So here we have changes in consumer price index 2019, through 2020, this was looking at year over year, so from December of 2020 to December of 2021, meat prices, so meats, poultry, fish up 12.6%. If you look at like beef, beef was up 18%. Right, in a year, that's 20, December of 2020 to December of 2021. That's crazy, you know, eggs 11% increase,

Michael Baker  07:59

which a lot of people don't understand, especially when you when you mentioned something about eggs, is how many other food products have, you know, caught, you know, have eggs or egg derivatives as part of them, you know 

Ross Marynell  08:12

Right. So and then you wonder, well, well, gosh, that's, that's not good. What's some of the things that are leading to that? So then I've been reading articles about the increase in fertilizer prices. It's the top issue for farmers right now. And so in the United States, we grow a lot of corn and wheat and things that need fertilizer, it's, it's their big fertilizer consumption products, right. And so all the crop production ingredients are higher. So this was, you know, just looking back over the last year. So, you know, whatever it is, if it's ammonia, if it's some of these other ingredients that they need to build these the fertilizers and make them. It's just the prices are through the roof so that the ingredients that they're putting into the fertilizer, all those are up, of course, there's supply chain issues there too. Yeah, because they've got to transport the product they've got to get it to, to the destination that's higher. You know, some of these ingredients like the anhydrous, the ammonia, well, it requires a conversion process, right, that requires natural gas. So you think about now you see the cost of natural gas going up. And so the ingredients and the process they have to go through to make those fertilizer products. It just goes through the roof in and then we slap on some tariffs that are for products that are coming in from overseas and it just ends up being a catastrophe. And so we're trying to work our way out of it. Of course they had slowdowns and production during the COVID lockdown as well. We're not behind. Now they're finding a labor shortage prices are going up. They're trying to get ahead of it. But those types of things push prices right into the food market, which hits everybody in the pocket. It's just It's no fun to go to the grocery store anymore.

Michael Baker  09:58

Oh 100% Well I mean, I imagine, you know, there's so many things that happen if, you know, obviously, restaurants, which typically run on pretty thin margins anyway, but if they're, if they have to start raising menu prices and food prices, it gets more expensive to eat out. So then more people go to the grocery store, which, you know, grocery stores. You know, one of the things that I think we learned, I've heard some just personal anecdotes from different people that we learned is that the way that we had kind of run our inventories and our restocking, I mean, we were, you know, kind of adjust in time, like the minute if we needed something, we would, we would order it, but when the supply chain kind of has problems and breaks down, it gets harder to restock items, but if you know people's, you know, start cutting back and they don't eat out as much, because you know, food prices have gone up and restaurants have been forced to either, you know, reduce staff, because of all we went through with staffing and service, you know, being able to have people there, or food prices have gone up. So they had to raise their costs. And so it's more expensive to eat out more people go to the grocery store, buying stuff at the grocery store, grocery stores run out quicker, can't get it resupplied. There's all kinds of stuff. And it's like a domino effect. And I think one of the things that for anyone who's not, you know, micro economist, that doesn't understand all these different things, just think about something like gas, you know, how, you know, how do we get how do we get food from point A to point B? Right? It has to be it has to be, you know, shipped or trucked or whatever, you know, how are to move the freight. Right? There's, there's a cost of energy. And if energy prices rise that and they stay sustained, you know, they sustain that, increase it, it's going to permeate throughout the market. And so inflation is one of those things where we're going to see it. And that's one of the thing, the ideas that you mentioned that I think we're going to see, too, I agree we've, we've read some stuff where we're likely we're in wintertime, too. So a lot of people are using energy to heat their homes, the next inflation number could be could be large. And so I think it's not so much that the number is big, it's what people worry about, that's going to create for the Fed, because the Fed going to say, man, we need to be more aggressive, or we're not, you know, and that's going to be where everyone's going to try to figure out what happens next. I 

Ross Marynell  12:19

think well, that's the other component of their mandate, right? They want full employment, they want a controlled 2% inflation target. Well, we're going to be so far beyond that. We're not even going to be in the same stratosphere. So I'm looking at crude oil prices back up today, just looking at the number right now in real time, over $92 a barrel. Oh, yeah I made a joke on Twitter a couple years ago is like the price of a crude oil, a barrel of crude oil is about the same as a 12 pack of Sycamore brewing beer was, of course Sycamore, one of our local microbrews here in the Charlotte area. You know, it's kind of wild to see that price swing from literally the lowest prices I'd seen in probably 20 or 30 years or longer, to almost back $200 a barrel. 

Michael Baker  13:11

We were talking about that yesterday, remember, I believe in 2020, you know, oil futures actually went negative. And so if you were pull up that chart, and I will throw out the chart on the on the on the site, but if you look at that chart, I mean, from that point, it's been just kind of a steep angle upwards. And now we're, you know, we're at prices that we haven't seen in quite some time. And you with all these other things we got going on, it's just it's just not a it's not a great environment. And the thing that just feels really wrong is that it feels a lot of the stuff, especially with energy is self inflicted.

Ross Marynell  13:53

So check this out. I was I was looking at this. There was a report from a site called the American Oil and Gas reporter. And they calculate the number of rigs this data is provided by Baker Hughes. Oh, yeah. So in end of December 2018, we had 1083 rigs pumping oil and gas. Yeah. 2019. It goes down to 805 by the end of 2020. So this is production had really come to a halt. Right? It was 351.

Michael Baker  14:31

Oh, wow.

Ross Marynell  14:34

And we're back now at the end of 2021 to 586. But you're talking half of where we were producing four years ago. So yes, and I know that some of our listeners are probably encouraged by that because they want to see a more advanced transition over to renewable energies. And I understand and my my view is, we still need this and we still Don't need it, whether we like that, like it or not, it's essential to maintaining prices. And if we're not comfortable with it, and I think we're gonna see some inflation continue for a while?

Michael Baker  15:11

Well, I don't, I don't think anyone I haven't met anybody doesn't matter where they are on on the political spectrum, I haven't met anybody that isn't open to trying to have or, or being more in, you know, inclusive. As far as you know, this transition to green or renewable energy sources and things that are cleaner for the environment, it's just do you slam on the brakes, and create a 25 car pile up behind you to try to get on that exit? Or do you gradually like merge over and over time, you know, incentivize companies with tax credits, or, you know, different ways to, you know, motivate, you know, this, this development, I just feel like we've gone about it all wrong with, you know, this abrupt, we're going to yank the steering wheel and try to like, careen off the highway, right, and it's causing us at the worst possible time,

Ross Marynell  16:11

I think we don't want we don't need the self inflicted wounds of forcing prices higher, because we're just shutting it down. I think you're right, people are open and willing to make those transitions and do things that are better for the environment. Case in point was look at Tesla. I mean, so Elon Musk, we laugh last party was made of the year, probably very deservedly. So he's a, it's a cult following it, Tesla, they love them. People love them, and they'll buy that car, whether it's the best electric vehicle out there on the market or not because of his reputation. And so people are willing to do that, if you if we let market forces kind of do it on their own, we will gravitate there, we really will. But this is, you know, the inflation that's happening, a lot of it is it's spinning, it's starting to spin out of control, we've got to bring it back in

Michael Baker  17:04

100%. Alright. So obviously, we started out the year, you know, kind of on a sour note with the market a lot, a lot of things within stock market, different the different indices has been has been interesting to watch and unfold, some discomfort, and quite frankly, some pain for some companies. It's been it's been wild to see the gyrations on a day to day basis. So, you know, lead us off here, what are your What are your initial thoughts? So what we started out so far with,

Ross Marynell  17:35

as you talked a little bit about Fed Chairman Powell, you know, they have sort of laid out the roadmap for this year, and they are stopping bond buying program. So that takes a little bit of the the quote unquote, Punchbowl away. Right. But they're also telegraphing three interest rate hikes to the to the federal funds rate. So what happens? Well, 

Michael Baker  17:55

not 25, not 25 interest rate hikes this year.

Ross Marynell  17:59

Isn't it funny to see all the wild speculation around it when he's, you know, whether you you like the process of how the Fed disk discusses and shares this information? I mean, they do stand in front of Congress and tell you what they expect. So I mean, I guess we'll have to take them at their word for it, I don't know that there's a lot of reason to speculate and make guesses about it. But 

Michael Baker  18:22

you know, as got to have got to have an opinion out there. But

Ross Marynell  18:25

you know, as interest rates rise, that does change the investor's perspective on where does our capital outflow to then, right, so over the last over the very, very favorable federal market period, we've seen capital flow to high growth companies with low to no earnings. And we've sort of made jokes on the podcast over the past, you know, cash flows coming and maybe a few years down the road. Well, the challenge when interest rates are rising is that we discount those cash flows. And so you with the with the higher rates, you really have a higher preference for cash flows now. And you want to see companies with earnings today, because if you're going to pay a little bit more in interest rates for that you there's more value to have those earnings today versus a year from now or two years from now or three years from now. And some of the movement that we've seen inside the stock indexes, just on an individual stock basis, I've got a few here. I want to rattle them off just to kind of let people know some of the movement that's happened on individual stocks. Right. So I tried to stick with some of the most popular companies that fit this category. So I looked at Shopify, so Shopify, very well known business we've many people probably use it may not even know about it. At one point their 52 week high on their share price was 1762. Trading today around 809. That's about a 54% decline in the stock price from their high to their current

Michael Baker  19:53

Say that again. What decline 54% 

Ross Marynell  19:57

decline we've seen We talked a little bit about some of the IPO SPAC conundrums that we had last year,

Michael Baker  20:06

which was really conundrum is a nice way of putting it. But yeah,

Ross Marynell  20:09

massive faceplant is better, probably more accurate. But Coinbase was a very popular IPO it was. It's a highly used exchange. So it has market penetration. But the stock price fell from a high of 429 to $181 a share. So that's a 57% decline. Right? If you look at one of the funds, and one of the most popular funds and most discussed funds last year was Ark, a RK K, that's Kathy Woods fund peaked at $159. A share now trading at $69 a share. So that's a 56% decline. she invests in a lot of these businesses that I'm mentioning, as well. So I'll do just just, I'll do one more. Okay. So this is ticker net ne t. This is cloud Cloudflare. Very popular cloud computing company. It peaked at $221, a share, now down to $96. A share. So that's a 56% decline, but listen to this. At their peak, their price to sales ratio, topped out at 113 times. So the value of their business 113 times their sales,

Michael Baker  21:22

just some modernism, just a little optimism baked in.

Ross Marynell  21:27

You know, if you had a business that made $1 a year, and you went to go sell to somebody not dollar profit, $1 of sales, right? And you went to say, I would like to sell my business to you. Somebody goes, Okay, well, you can make a profit. But yeah, dollar and sales. How much? Would you like to sell it to me for a new set? $113?

Michael Baker  21:44

They would just for you, I make a special price. Right? $113? 

Ross Marynell  21:52

We have $1,000 of sales? I would like to sell it to you for 113 Oh, yeah. What do you think? No, how do I get my money back? How do I get my money back? Right? We get our money back to earnings through cash flow, if we don't have it in it's not on the horizon at some point. So my point being some of this was just it, the pendulum swings too far in both directions. It swings too far. On the downside, a lot of times it swings too far on the upside.

Michael Baker  22:20

Well, you know, remember, I mean, like anything else, and, and I use I use this word very cautiously. But you know, manias are interesting, because remember a lot of this stuff happening. The feds, you know, they slashed interest rates, they're buying up, you know, providing massive liquidity to the bond market, then you've got the stimulus money coming, the there's there was so much money created and pumped into the system. And a lot of it found its way. Again, this is kind of been my take on this a lot of the money that came out not all of it, but a lot of it found its way to actual consumers this time, because unlike the financial crisis, the financial crisis, they gave it to the they gave it to the banks, and the banks kind of you know, controlled they shored up their balance sheets, and they kind of control the flow of the money, you know, into into the markets. That's not what happened this time. This time. They had PPP loans, they had emergency, you know, economic injury, disaster loans. At like 0%, the PPP loans were forgivable. They gave stimulus checks out, there were a lot of people that you know, who did not lose their jobs, that were still working are still receiving a paycheck, they got stimulus checks for not just themselves, but for their kids. And, you know, we're all trapped at home. And so what became the most the fun game for everybody to play? It was the stock market. And so you started to see like these, you know, the GameStop bubble, you started to see Wall Street beds become a thing, you know, read it became a thing, and everybody had a little bit of coin to play with. And so they were getting in there, and then, you know, you had the Spacs and the IPOs. And, you know, a lot of these companies were bid up on, you know, pure speculation, because what else we're going to do?

Ross Marynell  24:15

Well, in my point to kind of bring that up is, it's often that we see pretty serious movements and stock prices underneath the surface of the index. But if you look at some of the broad index movements this month, it even is rocky as it's been in in as dire as it felt a few of these days. Over the last few weeks. You're looking at the S&P 500 down around 6% year to date, the Dow down 3.38 year to date. The NASDAQ is has taken the brunt of this because it's more tech more technology companies. It's down 11.29% year to date, and small caps Russell 2000 index down 6.67. So even though we have some pretty dire movements and pretty harsh movements in certain stocks. If you look at the broad indexes. Yeah, they've drifted down some it's been unpleasant. And but it's the diversification does work. We're starting this year just here today, the divergence between the s&p 500 Value component versus the growth component, you know, the growth component of the s&p 500 I look at ticker spy GE, it's down a little over 10%. But the value components down 1.26 Hmm. So the diversification does matter. If you look at even just international stocks in some of the emerging markets, those indexes, you know, for the most part are down less than what we're seeing here, look it locally in the United States. So when we build asset allocations, and we use exchange traded funds to capture, and you know, an exposure to an index, like the s&p 500, there's some of this underlying movement is always there and constant, but it doesn't necessarily have that same effect on the big index.

Michael Baker  26:01

Well, that's why, you know, I had an interesting conversation with someone about a week ago, and we were talking about, specifically a stock and the stock that they brought up was the stock Rivian. And, you know, Rivian was, you know, they're in business with Amazon, and they're going to create electric vehicles. And, you know, they've got a beautiful demo vehicle, they've never they don't have a single vehicle that they've delivered out, I don't believe and, you know, so a lot of hype, but man, they attracted money, like gangbusters, and of course, it's down significantly. And, you know, they were just talking about their experience in like buying that stock and it being down and I said, Look, see, it's, it's harder than it looks. And the concern that I've shared with you and with a few other people, is, as markets go back, and I would say normalize, which, you know, define that at your own peril. But when markets are constantly just going up, because there's accommodative fed, there's easy money policy, money pouring in. And you know, the rising tide lifts all boats, now that accommodation is going to be you know, we we've been put on notice, hey, we're going to start tightening rates are going to go up, we're reducing our bond buying. Now it's going to be who is actually making money, who is profitable, who, who actually has a good business sustainable business model for the future? And, you know, that's been part of what has been going on with the markets. And yes, it can, it can weigh on the indexes. And but you know, we've seen Amazon had great report, Microsoft had a great report, Apple had a great report. So good, solid businesses are still finding ways to, you know, despite, you know, despite people who might be skeptical, they're still finding ways to have, you know, post solid numbers. So that's a positive, that's a positive. But one of the things that I worried about, and this is what I was, was saying I was sharing with people is, there were a lot of people that finally got off of zero and started investing in 2020, in 2021. And they're all excited about stocks, because stocks are sexy again, and they think that, oh, stocks just go up. You remember Dave Portnoy's on Twitter telling him when like stocks only go up, and he did his whole shtick. And I'm worried that a lot of people think, Oh, this is like, super easy. And all you got to do is put money in there. And I'm like, it's not as easy as everyone is trying to say it is, it's difficult, because there's so many factors that you have to contend with. And I worry that people are going to get burned, because they are the people out there that if you know, that are up, you know, 100% on some, you know, speculative position that probably just got smoked in the last three weeks. 

Ross Marynell  28:56

So I think that's a good summary. It's we are heading into a different period where it's less accommodative. We are going to see interest rates rise this year, we will see inflation continue to be a problem. We need to thread the needle on these issues carefully. And it will require a lot of work. And I don't wish bad returns on anybody. And I want to see our businesses grow and in increase earnings, so we're always rooting for us businesses.

Michael Baker  29:26

Yeah, absolutely. We don't want to we, if I mean, I don't think anyone wants to see the market crash. I mean, you know, except people that may be short the market and you know, 

Ross Marynell  29:36

I don't have much time you spent on social media, I guess. 

Michael Baker  29:39

I don't have I don't have great things to say about people short the market. The why do we bet against companies? All right,

Ross Marynell  29:46

let's so we just talked a little bit, Michael about some of the challenges facing the market or the next several months. So what are some things that retirees can do to help prepare and plan for some of these more volatile moments?

Michael Baker  30:03

Well, it's, you know, I mean, a large portion of the people that we work with are planning and preparing for their retirement years, some of you know, are on the cusp of retirement, some have just retired. And then we've got some folks that we've been working with now for a while, and it's great. But the number one thing that we always go to is we think that you've got to have a plan, you need to have some thoughtful conversations about you know, learn about who you are, as an investor, you know, there's more than one way to skin a cat. And, you know, have a written, thought out thoughtful retirement income plan, where you're going to go through this idea of like, well, what happens if we do see volatility, because one of the things that we've shared in many, many meetings with people workshops is, with this with technology, and with trading being done by computers and algorithms, I just think the speed at which we're going to see market corrections is going to be somewhat breathtaking for a lot of people. And we need to be ready for that. I mean, that's, that's normal, the same type of stuff that we've experienced historically is going to continue to happen. But how are you positioned for that?

Ross Marynell  31:09

Right, I think one of the tactics that we use is we do segment investments based on their objective. And so for example, you may have with a 401k plan that has your entire, you know, the balance of your net worth in it, that's kind of doing everything, one of the things we like to do is sort of break that down a little bit to say, Okay, we need a certain portion of that to distribute income over the next five years, let's segment that out, and let's change the risk profile on them. And maybe we have a portion that's going to be balanced growth. And so we know it's going to be highly diversified, but still a good exposure to stock. So we know how that then can prepare people for how that might move during good and bad market environments. And then maybe we have a segment that we just want pure equity exposure to to say, hey, we want to go and get growth over a long term, but be prepared, because this accounts going to be your most volatile, this may move more during good and bad market environments. So when you kind of look at those statements, you can see, okay, here's the investment segment that I have, you know, distributing income for the next five years, it's going to move in a tighter channel. And then as we kind of move out that risk profile, we know they're going to move a little differently. I think that helps people just understand, alright, Where's, where's the short term risk to cash flow? Is that account, okay? Then to kind of move down the ladder, how's the balance growth model doing? Well, it's highly diversified, there's multiple positions in there covering, you know, equities versus fixed income, the alternative assets. And I think that helps just compartmentalize where the risk is, right, and the time horizon that's associated with that. So the equity model, we may not be in a plan, be looking to access that those funds for a decade. So we have time to let that go through the market movements that are going to naturally occur.

Michael Baker  32:55

Yeah, I mean, and you, you got to think too, we naturally do mental accounting, you know, every day, I mean, we with, with our budgets, with, you know, just what we spend at the grocery store, as we talked about earlier, versus what we spend on fun and entertainment, we naturally do some of these things. And that's the goal is to try to keep things, you know, aligned with not only what we're not used to doing, but with your values. And so I mean, it's okay, if you want to be more conservative with your funds, but we have to understand, you know, inflation is going to take a toll over time, you know, own your purchasing power. So that's has to be factored in. But one thing too, that I always encourage people to think about is what, what kind of heavy lifting are you expecting your portfolio to do? Because, you know, if you've got other sources of income, and you've got Social Security, and you've got several things going on, where you don't need as much from your portfolio, or you don't need money immediately, from your portfolio, you can think about the investment world and market volatility a little bit differently than someone who's going to immediately start having to pull money from their portfolio the day that they leave from, from retirement because their regular paychecks are going to stop. And so that's why we say like, there is no one way to do this. Everybody has to think it through for themselves. Like we know, from his from our own experience that you know, co workers talk with co workers and you know, people go online, and they get Google and they look at all the financial articles that are written about, you know, here's how to do retirement the best way but I'm telling you, you need to sit down with somebody who understands multiple different ways to create retirement income plans and find the one that's going to work best for yourself. Because, you know, you're the one that's going to have to live that plan. Nobody else no article that you've read, you know, the author or no co worker or neighbor, they're not going to have to live your income plan that's going to be you. So we you know, that's the biggest thing that I would tell people right now is that, you know, we're in into a time where the Fed is at least telling us that they're going to be removing accommodation to try to begin raising rates. The markets going through a rewriting cycle, and you need to be just prepared that there could be some volatility hit. That's not a bad thing. Nobody gets mad about volatility to the upside. It's just the downside that everyone gets worried about. So we want people to be ready for that.

Ross Marynell  35:24

Awesome, well, that's a good way to cap it. I do think everyone's unique in their feeling toward good and bad news in the market. Our objective is to try and get to know our clients well enough to know how we need to work with them. Because we all have our own internal biases and feelings toward it. And so it's just natural in their heart to break and so what we try and do is, is get to know that and how you want us to communicate with you during those good and bad times. So that we can keep on playing. 

Michael Baker  35:54

Yeah. 100%. Well, for those of you who came and stuck with us this long, we thank you for listening. Ross and I we love to get on here and just share our thoughts and what's going on. We want to keep you informed. Thank you for listening to the show. If you got anything you would like us to talk about on the show any topics feel free to email us at the money huddle at VC planning.com. And as always, thank you for listening and we will talk to you next time.

Sources: 

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