10.12.22: Audio automatically transcribed by Sonix

10.12.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
This is Another Money Show. Get set for another hour of the latest financial information and economic news affecting your bottom line. J.R. and Anthony are committed to helping more Americans like you optimize their income, reduce their tax risk, and reach financial freedom. So let's start the show. Here are your hosts, Anthony Carrao and J.R. Rotchford.

Anthony Carrao:
Here we are, your hosts, Anthony Carrao and J.R. Rotchford, taking a break from our day-to-day as financial advisors with Rotchford and Associates, a fully independent fourth-generation family office right here in the greater Phoenix area. Have this show to bring you information. You may not hear from those other financial shows. We're aware the last thing you need is another money show. That's why it's very much a sarcastic name to this show, because I feel like the things that we bring up are not not normal. And we are here with Sam Davis today. Our producer is back. J.R. is out of town right now. He is up in Snowflake. And I know we've talked about that a bunch of times when we talk about being prepared and things might be weird. J.R. loves talking about getting out of town. So this was his excuse to get away for a little bit this week.

Producer:
Yeah, well, we're definitely going to miss J.R. I'm always excited to be back on the air with my guys, even though it's just you today. Anthony, out there in Phoenix on 960, The Patriot. And, you know, sometimes people miss part of episodes when they're on the air and they may have missed past episodes. So if you're listening, you may not know that all of Anthony and JR's episodes are actually archived on their podcast feed. So you can find another money show wherever you listen to podcasts and you can actually subscribe there. So even if you're out of town one week, they'll notify you that the new episode has been posted and you can take a listen kind of on demand whenever you want.

Anthony Carrao:
See, this is why we need you. You're the radio expert that flowed so well. It's like you knew exactly what you're doing. Unlike us, we get up on the air, we know how to look at statements and we know how to financial advice. But this whole radio thing is still new to us, but we're loving it.

Producer:
Well, it just comes down to experience. Anthony I've done this so many times, just like you've helped clients before, so many times. Unlike some of the other guys. I know you saw a commercial over the weekend that kind of rubbed you the wrong way. Maybe another financial advertiser out there.

Anthony Carrao:
Oh yeah. What a great transition to bring us into this, because Sam and I always chat a little bit before we get on the air. And this one, it gets me every time I see these commercials because you talk about fake news, right? And misinformation. Well, it's not that all the information is wrong. It's that it's manipulated in a way to make you think a certain way. It's made to set people apart. I mean, that's what advertising is, right? I mean, we're here trying to advertise and try to set us apart, but it just it bothers me so much. So in this commercial, it has you know, it's the other guy's talking to this financial firm and it starts off with, don't you just go with the flow? Aren't you just advising the same way as everybody else? And their response to that is, well, we actually manage our portfolios with a forward looking views. Isn't that everybody, every single financial advisor out there is doing their sort of version of looking forward and the at the future is going to hold without a crystal ball. And they say that as if they're setting themselves apart. But I don't think they are. I think a lot of these firms are doing the exact same thing. It's that rule of 100 get into bonds for safety, buy the dips. But like what we talk about on this show, none of these advisors are ever telling you to sell the peaks. If there's a great opportunity to buy the dips, where is that money coming from? Now it's just me going back to you and the client.

Anthony Carrao:
Now is a good time to invest. Give me more money. Or where would you as the advisor to get this more money? Why aren't you capitalizing on our gains? You know, we bring this up before in normal markets you can sector rotate in times of growth and stability. In times of downturn in the market. There are certain sectors that make sense to invest in. But right now we're in a bubble where everything goes up together and everything falls together for the most part. So nothing is safe when everything's falling. If you talk about 2008, you've got to remember 2008, right? Housing destroyed everything. It was housing that brought down the collapse of the economy, the collapse of the stock market. But at that time, bond rates were reasonable. It was normal interest rates at that time. So what happened is the stock market crashes. Right? We're all aware of that. But how do you safeguard yourself? Well, then you move into bonds. And what happened with bonds is as a way to stimulate the economy, the Fed dropped interest rates to practically zero when interest rates fall. Bond prices rise. So they just skyrocketed everything in the bond. So if you went safer in that timeframe before the Fed dropped rates, you were making money. That was a different sector that you can go to in 2000. So right now, fast forward 14 years later, we've had almost nothing but an insane, massive run up in the market. Year to date, we're down. What did you say? 25% approximately?

Producer:
Yeah, it definitely depends on when you're listening to this. But as of Wednesday, the 12th, yeah, we're down about 25 and.

Anthony Carrao:
That we're on Wednesdays now or. Yeah, not Tuesdays, you're down 25% S&P year to date as of today, but you still had 13 years of growth, like you've still made massive amounts of money. So to sit here and complain about this 25% down, you never should have probably been to this point in the first place. With reasonable growth. You shouldn't be even at this 25% level. You know, the Dow Jones in the peak of what was it, the dot com bubble was about 15,000. Sam, can you pull that up and check, confirm and again, not exact numbers, a bit about 15,000 drops after the dot com bubble grows again to about 15,000. In 2008, right before that bubble burst. Right. S&p lost about 57%. Well, now, where are we at today? If I'm looking at the Dow Jones right now? We are just we're at 29 four, essentially. So we're more than double what it was in those peaks. So even if you have peak bubble growth, should you be at where we're at now? And the answer is no. So why is God channeling my inner J.R..? Because he's not here to rant. So I guess that falls on my shoulder. So the difference between 2008 and how you could not necessarily sector rotate, but you can move to bonds and find some growth. The Fed has kept rates at zero since 2008. Because. Why? Because we got used to all this fake money. We got used to people being able to borrow money for absolutely nothing and then inflating their stock prices.

Anthony Carrao:
And in Q4 of. Was it 2018, the Fed started to try to raise their rates again and the market threw a hissy fit and they kept them back down. So what happens when you have. 2020 happens and there's a virus and a shutdown and the market tanks 20 30% in one month. Well, what do you do? Well, they were out of ammo, so they printed an insane amount of money. Right. 40% of the money in circulation from print in the last couple of years. So they print all this money? Well, when you increase the money supply without increasing the demand, what do you do? You create inflation. Now, it took a while for it to hit us, but it is here. So we're in this bubble. The markets falling. Bonds typically should be your safer bet. Well, they left interest rates at zero. Well, if they left the interest rates at zero, that means they can only go one way and they can only go up. And if they go up, there's an inverse relationship. So now your bonds are taken. So now the market's tanking, bonds are taking. Where do you go from here? So we'll talk about some solutions a little bit later in the show. But now I'm just going to kind of go on this rant because I went off on I didn't even talk about the rest of the commercial.

Producer:
That's all right.

Anthony Carrao:
The things that I'm really upset about, that was the first little segment about this commercial. So. Right. So this this advertiser advertisement for another investment firm saying, you know, we actively manage our portfolios with forward looking views. I mean, get out of here. So the next little bit of the segment. Well, don't you still sell investments for high commissions? Aren't you one of those people? And their response is, No, we are not one of those people. We don't sell commission products. Were fiduciary obligated to act in the client's best interest. I obligated you? Are you kidding me?

Producer:
A plumber doesn't say I'm obligated to fix this leak when he shows up. That's the expectation.

Anthony Carrao:
That's their job. And to shine this light in. Oh, my God. The way they use fiduciary as a buzzword. What a joke. Because, one, you're either doing what's right for the client or you're not. There's so many different ways around it, and these fiduciary rules only apply to quality qualitative qualified funds. Or what are qualified funds we'll call qualified funds is money in your IRA and your Roth and your 401. K, you're for 57. All of these retirement tax codes that's considered qualified money. Non qualified money is stuff like in your bank or if you open up a personal TD Ameritrade account or one of these brokerage firms and you're just you're funding it with bank money you're paying gains on your anything you sell as it comes. It's not tax deferred that's not qualified money. So to say that I'm a fiduciary by law and I'm obligated to really is just talking about that side of the fence. Now, what they're saying when they're talking about being a fiduciary in that sense is it's assets under management. It's a series. Was it series 65? It's the same thing our office does. We're fiduciary in the money we manage in the stock market, meaning we're not getting paid commissions each time we sell them, buy and sell product.

Anthony Carrao:
However we are getting paid. And are we obligated to do things in your best interest? I mean, by law, I guess. I mean, you could you can say that you can pretend to use that as a marketing scheme, but people that are going to take care of themselves as an adviser are going to that's what they're going to do. Whether you put these laws in place, you know, bad actors are going to be bad actors. So there's more to this commercial, there's more to the fiduciary. There's apparently I'm just going to rant about this commercial for the rest of this show. We've got some new stories and things we want to talk about. I'm going to get to that. I want to catch up on some stories from the past. But for right now, we're going to take a break. In the meantime, like Sam said, you can find us Another Money Show anywhere you listen to podcasts, you can find us online at AnotherMoneyShow.com. Reach out to us directly if you have questions, concerns, anything we say, anything we reference. If you want specifics, reach out team@anothermoneyshow.com And we will be right back.

Producer:
Remember all of JR and Anthony's listeners receive a free financial consultation just for listening to the show. Visit AnotherMoneyShow.com To learn more and schedule an appointment. Thanks for listening to another money show and subscribing wherever you listen to podcasts.

Producer:
Another weekend, another money show. Visit AnotherMoneyShow.com.

Anthony Carrao:
All right. You are back listening to Another Money Show with myself, Anthony Correo. We also have Sam Davis, our producer, on filling in for J.R. who is out. So not just our great producer, but also an awesome co host. And help me lead into this next segment. So if you're listening before we're talking about a money management commercial that was airing and just kind of the obnoxiousness of it, essentially they're trying to advertise how they are so different than everybody else, but by advertising that they're pretty much the exact same as everybody else. It's clever marketing. I mean, if it works for them, good for them. But let me just dissect this a little bit. In the commercial, they're saying, you know, don't you sell high commission investments? Isn't that how you make a living? Aren't you just like everybody else? And they're like, Oh, no, no. We separate ourselves from the pack because we are douches who are obligated to act in the client's best interest. And the fact that they even said obligated I still think is hilarious because that shouldn't be something that has to be stated. That's just something that you should do. So just talking about the fiduciary rules that have been coming out and how it's for qualified money and not for non qualified bank money, but also fiduciary this assets under management.

Anthony Carrao:
The series 65, the managed money, it's the same thing that our office does. A lot of offices have moved to that where there's not commission based fees for buying and selling. It's an overall fee for what you're managing and we've seen them anywhere from one and a quarter to one and a half. Some tried to do lower, but then there's other miscellaneous fees out there. Our office, we try to keep the fees as low as we can. Everybody says that. So don't take our word for us, you know, reach out and we can talk to you about your personal situation, because of course, everybody says that. But when you're a fiduciary with an assets under management license, what you're doing is you're not paying the commissions for buying and selling. All of that gets taken care of the fee over anything, your management annual fee. But what the sales tactic here is, is to say that depending on how you do, I