The PlanStrong Financial Forum 07-15-17

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Sunday, July 16th

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And we'll plan stroll in the broadcast studios he would still play and strong financial forum where your host. Kendra are very humbled president plans to all your best remembered. Cold portions there's still I'm Bruce Morton investing. Symbian phone. And I'm James carver your vehicle just along with Paul partisans and is a pledge drive financial forum welcome back to program at all. Awesome to be here on yet another nice weekend you know it's been no we've been pretty lucky number this week was it's a lot to brown if I see right if you if you if you had this week off sorry that's supposed to Qatar or Qatar is fantastic deal this week resolution you have flu bug but I would you know we get is it's clear clear from the weekend with a source who works its way at least one of the day you know throws a bomb in the -- needs on one night stand and that's why -- and remember how nice it is because and the rest this time it's a -- guy charged with position is overwhelmingly can imagine how horrible would be to live someplace where was nice all the time and I still. So as you know generally on Florida a little bit in the winter time -- always funny you're there but the full time residence or talk about let's say in a house whether. Mean I'll while you know there are we there was there was cloud. If you trip RS I generally don't like that there were a class spirit didn't rain gone on not to rain but there were clouds for our modest aren't perfect and I want her very that's an issue. So let's just what is your standard yeah exactly and here in New England. We have a very low ball carrier. And the. It's free standards last seen some standards be set you know where it's amazing scenes every week we sit here and that we either have. Lately really good news or or just OK who's right but things have been going. Up and up and up and his big picture wise ball. It seems like we are at our new year top levels for the indexes again and again. That is true that is actually true it was a fantastic. A week again and and we are as you said either at or within a hair's breath of all time highs and a cross the major indexes are stock indexes the United States the point. And you know you you look at why it's the case and and a big part of the answer is because the overall environment right now looks pretty good I mean and I'm up. I'm one of things I'm gonna do today is talk about a couple of presentations I want to and we do is very regularly go to listen to we columnists from whole bunch of different organizations. To get their perspective on the underlying fundamentals and then as a result what does it mean as it relates to to markets are and non you know us though I can cut to the chase on that essentially say they're really having a hard time finding a lot wrong right okay and and and that means you know are there any asset bubbles are there are any you know concerning situations to say while this is in on accident waiting to happen and the answer is. For the ones that are accidents waiting to happen further out. And I think that's a big part of what we have to do is investment managers is not only identified. When something could be and gotten if something's gonna be an obstacle more. Almost as important as when it's gonna be coming ops Colin probably the biggest victim of that believe it or not as Meredith Whitney. Now you may remember Meredith Whitney was the superstar analyst. Who are essentially predicted that the banks were gonna fail back in 20072008. She said you know this is a big problem guys. This whole mortgage backed securities saying it this is a house of cards is gonna bring down the big banks and as a result she was she was viewed as superstar. You know after all of that came true. But then what she did was she when our on our own and she did wrong analysis and she said look I've got the next one that's gonna happen it's gonna be municipal bonds municipal bonds are gonna collapse now and the reason they're gonna collapses because. These states and cities and local municipalities are putting together a signing up for these unbelievable. Pension and health Carolina police that are just sure as simple unaffordable price at some point the chickens come home roast but her problem was. She didn't care when. Are properly and and we're still seeing I mean we're already starting to see. In the municipal bond market cracks if you look at what's apple Puerto Rico problems what's happened would Detroit if you looks you start siege cracks in the facade rooster and Illinois just last week exactly right to downgrade of Illinois almost a junk bond status one tick away from junk. What does that mean. And and as you go on and on and on you say while some of these look a lot like what that lady was talking about now but the problem was it's the time friend and what politicians have a terrific ability to do is delay the inevitable and I don't think again dollar and literally and tellers no place left to kick it down and and eventually it isn't the politicians to kick the can down are the ones that actually come with a group the realization that there's no place for that kicked the can't actually the market now the markets say when are buying for example the bond secure trolling anymore they're just isn't an off you know credit worthiness and I'm that we want to buy them for the price you wanna solemn for and what the point of what I'm trying to say here is Meredith Whitney I believe was actually right I think we will have municipal bond crisis in this country the question is when and I do think it's somewhere in the five to ten year outlook range and so as an investment manager do what you wanted to do oh. Is you wanna still participate in something until it goes bad if it has positive. I ramifications implications for your client rich and the best example Diana's look at Puerto Rican bonds Puerto Rican debt though the value of Puerto Rican debt didn't. Actually go down until a couple years ago I. Up and listen you when I've been talking about should Belcher recommit small bonds for five or six years straight road we could have owned them from another three years and been perfectly safe with us. The question is it GA event on them when things start to go south a mass you know something that we wanna avoid self. Not only does a good investment manager pair what. Could potentially have problems but it's also when will actually be reflected in the marketplace and and what does it almost unavoidable. Well it started the job then follows we are a look at what's been going arms the last week we'll look at the equity markets it's stocks are in the US. Another good week. Unbelievable up. So right now the three major stock market indexes in the United States are at her with an air express of all time highs there are 11 and a half percent on the week and international stocks essentially the same thing. Just to give you an idea a year to date yes and 500 which is. An index of 500 largest publicly traded stocks is up about 9%. Excluding dividends 10% including dividends. Well international stocks sharp around 15%. And if you wonder why he stocks were up another 11 and a half percent this week most of it has to do with kind of a goldilocks effect and here's what Hingis. The head of the US fed this week. Came out and talked a bit about inflation expectations and whether or not they're gonna continue to raise rates any time soon during a normalization process right the market. Heard what they wanted to hear which was heretical cautiously while we do this and as a result what they're what the market is hearing. Is that. Whether it's our central Bancorp other central banks. They're going at a moderate pace they're not going to normalize rates who fast it really were more was one of the major risks. That's out there two up a positive market a good market environment is. In the Fed being dom doing what they did back in the 1930s by raising rates too quickly and as a result killing. On an economic expansion. What they're doing now is there's actually sang we think based on what we're hearing whether it's from your European Central Bank core of the US federal whomever. That we're getting the right message that this is gonna be a goldilocks situation not too fast not too slow just about right and that is feeding into why the markets continue to look. Relatively good. When we talk a little later wrong today I'm gonna actually talk about the specifics of what is all really fueling. The stock growth but the environment right now is very fearful sorts what does she have to say about inflation ball specifically well what you said was that she thinks that even though inflation measures right now Kenny are relatively modest and not growing fast and part of that deal that gore and second is that what hurts the Consumer Price Index of the Producer Price Index. Either one you're not seeing a lot of inflation something sub 2% on an annualized basis they're targets 2% but what she sang. Is that they think that the tightening labor market is gonna lead to wage growth and overall inflation just hasn't happened quite yet. And if you look at whether or not the markets buying what she's saying you have to look at Fed Funds futures and what they're saying is 60% probability that the feds gunnery short term rates sometime before the end of the year. So what they're saying is we think she's going to continue to raise rates we believe some locked. That there will be some inflation but. At the same time if you look out next year what feds funds usually say they're not saying that she's gonna do as many increases as she's currently shanks at that it's kind of a wait and see things do bug the market really wants to see if we get some inflation some real inflation because that's what the Fed finally needs to be able to raise rates would authority. And we're hearing from Bank of Canada as well well see here's another good one the Bank of Canada for the first time in what seven years or something. Raised their core interest rate and and they did it because they had good GDP growth and a bunch of other stuff. And now by the way this is just the beginning of normalization for the Bank of Canada. I'm you know all he did was raised there and there are short term borrowing rate from our point 5% to point 75% I mean these are these are very very low numbers and to solve 1%. And the US spy on the way just so everybody skirmishes between one and one quarter mean these are very very low rates for short term borrowing when historically good and much closer to 3% 4% and depending on the circumstances inflation. No what about bonds Luis in mirror in the bond market you're actually relatively flat weeks in the US tenure are still around 2.3 percent. It's a little bit. Lower yield a little higher price than it was at the beginning of the year the ten year German bonds still right around point 6% the Japanese ten year just south of about point 1%. And you know the journal had a really good series of graphs and charts that showed. How bond yields were around the world are normalized in other words are coming up a little and you know we love Jeff gone. He wants one of the guys he's our guru Mikey well he's the you know he's the new weighted bond grew by media by baron. And he came out this week and said that you know this rise in bond yields is just only the beginning and he thinks the US ten year treasuries gonna move towards 3% this year he also sees mortar traits going this well this is really important stuff if you were bond investor and many people own bonds. If interest rates are going up is highly likely means that your existing bond prices are going down so first time he's seen this in you know many many years. Only come back we'll as the dollar oil prices and some government data that investors should know about it's a blast struck financial for this just. All Parsons president of planned strong investment management. And you're listening to the plan's strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office. 808897275260. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see classroom investment management is an affiliate business financial group think is located at any Russian diplomats who threw six. Hi this is Bobby Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance or investment products though sometimes will benefit the seller more than the buyer. What makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest and be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at plan strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group and member Fulmer SIPC plans to investment management to. Oh yeah. And if anything it's. A number. I'm okay. Okay. OK it's. It's. Crumbled and strong broadcast studios of the epicenter of definitions. This is the plan's strongest on national forum with the all portions president of planned stronger investment management. And I'm Ken carver had the anchor desk along with the ball who's. Jamming along. I was not jamming and the reality is you weren't having Malaysia and better yet we don't have a how we keep him so I think caught early dose or otherwise it would be ugly and people would be yes we are often are planned all night. I can watch and I think it is reload your marriage young be telling though man regarded as we gotta be go there are now forget about I think both our wives know we can't flash. That's well step 60 hole. And that point our and we go planning out my wife always likes to dance I was sent help to tinsel on the young guys gone. It's fine you don't have much more fun Korea because because they can just doesn't end there enjoying exactly as opposed to us sit there and watch and smiled and that's why I can go under way of girl of course does this week and so now. True upn Bar Harbor me wish I understand we Jon and I were I'm actually leaving right after the show and now all I can tell you is we are a little anxious about the Dion the tolls I've heard I've heard horror stories as we go to Cape Cod so I know the horse believe me I know our first tentative contract what you hear these stories about traffic getting through the tall are they're told we'll still there will it. Did the New Hampshire you know to get through New Hampshire there yet she's going on there and did so we have to go through New Hampshire get to Maine and they may each course according to new Hampshire at the main cause as well New Hampshire that I have an idea I don't have many many Hamlin further up tonight I was a supplement Austrian and Neiman Marcus aren't I get I get the New Hampshire Dolan you could be waiting. A long. Time just terrific or money they were weren't there I can we have to drive five hours to get to bar around which is mind just in many drive turn on the radio you know if you dance in the car oh boy can he can sing the songs from the Sony's glory though I'm not and I feel like I'm like Clark. Christian right a little isn't cars showed us we won't have beyond totally content and hopefully no one bodies on the route exactly exactly anyway but we were I've moved. Before the break we we were talking a little bit about we we covered. The equity markets are there which are our first and you know every every week in the program we addressed the US dollar we know is where it is. Is it's stronger than lately he's been he's been candid even. But I think it's important to remind phones why that's important why we do follow the US dollar. And we need to know how would it stands against the Euro and other currency. Well I'll give you two really good reasons the first treasonous if the dollar strong if it gets truce if its strong what it represents is that. Our currency our economy is more robust. Then other competing economies. That that's what drives the demand for the US dollar people buying our goods and services and literally drives up the demeanor and for the currency itself Brit air go the price goes up of the courts. So one reason is it's a reflection of the strength of our economy vis a vis other re economies. The second thing dollars. If it gets too strong then it becomes a competitive disadvantage. When you are trying to export goods and services to those countries so say. Are the dollar comes very strong and we're trying to export stuff to say to Europe. Yeah well all of a sudden when they buy something it's more expensive than their local currency they're not gonna Barnes made up right I. And so it actually hurts if it's too high so from an investment management perspective. You're looking and it from force as a reflection of the overall economy secondly as a reflection of what will happen to exports. And then. Probably a third one is. When I manage money. Am I gonna manager on Hedgecock currency hedged basis or not because. Sometimes will reinvest overseas we invest and we take into account we and other which we protect ourselves. From our currency becoming weak or down other currencies or stronger than other countries around how how would you do how would you protectors are actually on. Investment vehicles caught whether it's an ETF and exchange traded fund. Primarily. On that actually. Use hedging as part of their strategy and seek and participate in the market but it also is. Making sure that you're not exposed to the currency necessarily at the same time myself it's it's important to understand this stuff because it's the difference between sometimes it can be a massive difference in how an economy did in local currency. Vs how we did when act you then translate that back to US dollar scores after all where US investors right so everything comes back to dollars in the end. So that's why it's so important to investors a more reaching normal our street. Relatively flat and you know the Euro still around a dollar fourteen it strengthened a bit. Our this year are certainly was runner dollar sex at one point its backup to a dollar fourteen and aren't as bad news for me or go to Europe Africa on the Japanese yen is still around a 113. Yen per dollar. And here's the really interesting one that the peso and Mexican peso is actually really strengthened. Hot and it's actually stronger now than it was before one Donald Trump was elected president and it's important read because as soon as she Donald was drum was elected we saw the peso fall dramatically absolutely and the reason was because Trump's side you know worse are actually gonna kill that stuff and and as a result or so of real concern. But Mexico's economy was gonna go south south south us. You know if the biggest customer of all their goods and services isn't buying their goods and services anymore. Then yeah that's a big problem for their economy what does it mean you've embarrassed America blues restaurant well it's really two things Kenny first and probably most important means that. I Trump's campaign rhetoric about now stock. The bar was a lot worse on the right that's the sort that's the first or the second one Kenny is that. Mexico is one of the most important emerging market currencies. And there was some thinking. That if the US economy was gonna get stronger stronger stronger that was gonna hurt all the emerging markets brain and as a result in other words capital would come from nos and they. Come to the United States instead. That would meet the air currency weaker. Well if that's if our economy isn't growing. As robustly as people thought it was going to say 2% relevancy 3%. Well then the emerging market currencies actually gets stronger and Mexico. Gets the strongest of all of them because of their direct interaction with the United States. What oil prices ballroom we see there. Stable I you know I say that as far as beginning to end as usual there are two or three dollar moves during the week but you know we're still at around 46 dollars a barrel for west Texas and around 4748. For Brett. On and you know a lot of this has to do with the fact that oil inventories deep crease almost eight million barrels a switch that's good nose and checked us out Kenny. Oil inventories are almost flack was where they were a year ago how long have been would have we've been waiting to say I. Telling a true point 9% increase tomorrow we are today vs where we were a year ago and that's very very good news as it relates to. A eventually bleeding out that excess supply drive the price of oil back op. But will still remains below fifty dollars a barrel and what we learned this past week. Was that OPEC produced more crude in June despite efforts to curb their output. And you know all of their usual suspects worthy over producers including saudis by the Sunni can't look around at everybody else and say what you don't like they did it also. But also non OPEC output increased. Arm in in none of this past month and it's expected to increase again in 2018. And that's because of guess what. Tracking my hand you the US's going to be a big reason for that out larger production number in 2018 burst when he seventeenth. And what does that mean it means production increases like this could undermine the efforts of OPEC to get that price back up to call sixty bucks a barrel and by the end 2017. So more calm but I'm becoming less optimistic. That we're gonna see well you know at sixty by the end of the year and seventy the end of next year I think what we're looking at Kenny it's more likely there's going to be a slower slog on the way up there unless there's a lot of demand out there that so soaks up a lot of us access apply. Now ball. Not a lot of government data released this week first of corporate. And my dad but we did get some inflation numbers Jack and this is probably think everybody's watching the most and I I mention this because yellen is looking at this the most as well because if you looked at the three mandates that that the Fed has for our economy one of them is inflation the other two. Look pretty good pretty robust certainly a strong enough. To justify normalization of interest rates. There all there has been this concern about inflation she didn't get a lot of help this week on both CPI and PPI. Consumer and producer price indexes were up you know point 1% month over a month that's not great that's no less than 2% on an annualized basis actually you're over Europe they weren't you know caught 17 to two you know she's looking for two and a half. And and we're not the area so that wasn't terrifically good news as it related to the normalization of interest rates. We also got some news about retail sales they fell in June a bite point 2% and even point 1% excluding autos and gas which are more kind of cyclical nature. Q2. GDP is gonna look like one thing that people forget. Is that GDP is a result it's actually it trailing indicator not a leading indicator the reason we go through this data as were covering the leading indicators that things that are indicators in advance of the results. And what we're seeing here is retail sales are very good leading indicator. Of what's gonna happen we've GDP. And the reason for that is because consumption consumers now represent a big part of GDP's growth and if consumers are slowing their buying. That's not a good sign for GDP so I would say we don't want to wait and see hopefully you'll be you know it'll be better than we think it's going to be for the Q2 Q2 GDP growth. Pauly just remind our listeners here we are below halfway through the year you'd think we just heard the all star game so for me that's our great Suzy here that is that's that's good Karlsruhe average of the year. But different investors we're we're just like halfway through the investing year as well which means. This is a good time for folks to take a look at where they are and if in fact they're positioned properly. Going forward. An important time and recently I mean you know you hear this I've set it today on the show. Marcus are all time highs and that doesn't mean this is the time to sell that's the thing I think people need to think about this. OK I understand markets were all time highs but what does it mean mom and does it mean oh my god this is like the dot com bubble in 2002 that you know or is it something else you know and that's a really important thing to digest and understand and I'll talk about that you know in the next hour segment are too. As it relates to what the outlook is from here on because that has to be the basis on your investment strategy now issue with. All and his team to see if you're properly positioned for the rest of this year Karl Paul's office until 380889727526. ABB 8972. Plan or score online to plan strong dot com and send an email oh we come back brewer to talk about. The fiduciary rule what it means to investors and what are we supposed to do what you do for a living it's a plan's strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 808897275260. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent member to go as I can sequester investment management is an affiliate of this financial grouping that is located in Washington street and matzo. Who's six. Hi this is on he Nelson if you're fifty or older here's a suggestion. Commit to getting your financial house in order. Over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money and retirement. Well now it's time to get organized and to make sure you have a financial plan will protect your retirement. If your financial life together. Call Paul Parsons at planned strong investment management to schedule financial check up. Call 8889727526. That's 888972. Planned commit to getting your financial house in order call 888972. Plan. Or visit planned strong dot com. Securities and investment advisory services offered through next financial group each member tumor SIPC plans to investment management is not affiliated next time I think it's okay I anyone strict fundamental. This says financial dogs and do your signing and informative. At least it's informative it's black and strong financial forum where bold portions president's bold plan stronger investment management and I'm Canterbury at the anchor desk along with all and do. Well Lou George. During the break can you give me can't see if you you have a new hero idea OK you do you gonna tell us share with me or listeners Jamie Dimon Jean Luc Darren did you tell you why. So Jamie Dimon fir our listeners is the CEO of JPMorgan Chase and you know key key is a straight shooter and he. That I don't know if you heard this on Friday during their earnings call home to about JPMorgan's Q2 earnings. He he essentially said he said it's almost embarrassment to be an American citizen traveling around the world because our politicians are just hopelessly. You know not doing their job opera and it's it's in spite of Washington this economy has grower one and half for 2% per year. In spite of the stupidity the political gridlock all of that. He sang guys get out of the way you know let this this is do what they do well because if you do it'll raise the standard of living for everybody and this. You know the latest thing is is watching these guys to a circular firing squad on and on the affordable care at our place has been that has been is amazing to watch it is well under the point now where they put in all the taxes they said they were gonna repeal it and that's still like good enough I mean I don't even know what they're doing this point and I think it's for somebody who's the CEO of a major bank and he just wants this economy to grow as as as much as a campaign. He's looking at the same guys just get out of the way and it's not happening so anyway he's my hero because at least he said what I think an awful lot of us have been feeling we're just. You know for the average American are to do well the economy has to be strong sure and it's it's not government programs it's not also stopped the economy has to grow and grow well if it does I'm telling you they're great jobs out there for people people feel good about themselves and make him earn. A money they can watch their wages grow and all of that is good for everybody. My camera if you're still only get over their own way yes our I will keep denial that I. I'm not sure you I think it's going to happen in the near future we'll seal how. I love the fact that they got it the actually swore during an earnings call just unheard PR because he said that that job what was going on Washington was stupid and then used another word new workers do another word for stupid or her daughter so I mean that's incredibly unusual and he's known as very polished man who are so this was this was really something so he is my Euro are constantly ask somebody again I managed money for people that my goal. Is to get. My clients severe goals as quickly as possible it's a lot easier to do it if you have a feasible economic environment and a favorable fiscal environment to get the aircraft and I have to tell you when trump was elected forget the politics I can afford to care about politics all like you care about is what's in the best interest might client and what when I heard the trump was elected the first thing I thought was we're never tax cut and tax cut is gonna be good for all Americans strap because it's gonna help stimulate this column Arturo on the program over and over and guess what I'm not alone it's not a coincidence. That the market is up 16%. Since trump was elected okay that's not a coincidence it's because people expect the tax cut to go through they expect fewer regulations all of that a C pro business environment which by the way is not. How are tax okay it's okay to be pro business because it actually. I'm one of those people would actually believes that it does stimulate the economy and with a strong Greek economy are more jobs and that's good for everybody. It is is some of this out. Swing based on the fact that. That tax cut may happen and down the road if it doesn't happen might mean we see the market respond absolutely core care so cute and I have for that is well Paul you are you mentioned the indebted as good as somebody who is. In charge of other people's money yes and that's what you do for a living dubbed there's. Story we want to cover both the fiduciary role on this the new rules to our total program a little a little bit but not much and it's it's time to really to address it short so she people heard about it I hear that word a lot more now would commercials and programs. Yes once you start the beginning what does it mean and where we had it. No worry so let's go to the Labor Department the Department of Labor United States. Came out with a new fiduciary role took a long time to get this thing together Obama really push to get it implemented before he left office. Our and it actually talk a fact this year arm and what it is is it's a rule meant to protect retirement scene first. And and really think IRAs and 401 case as is where this starts for what eventually I think it's gonna bleed over to all kinds of accounts. Armed but it was it's meant to protect retirement savers from conflict did investment advice by requiring their financial advisor put the client's interest first he might you're an investor out there. You work with the fidelity or whomever you think all the are always putting my best interest I hope you would think so but it isn't it actually was a different standard that that men and I don't mean to point at fidelity important member. Armed but. There there would there was actually a different standard in place in for quite some time for many people who who if you will called themselves advisor. Arm and curious what the standard requires the standard in new standard requires that financial advisor put the client's best interest first. As opposed to the prior rules but many brokers were required to follow that. Any recommended retirement investments work quote unquote suitable for particular client. So now it's not just that it has to be suitable it has to be OK it actually has to be your best interest. And what it means is under this rule a much broader group of advisors including those who advised retirement investors under that suitability standard. They're now obligated to act as fiduciary it's night and what does it mean. It's likely gonna result in advisors paying more attention to the cost of investment products and equality of the investment managers that are managing those product. So the other thing that the rule may do it may encourage advisors to take only level fees as a percent of assets are flat though so if you get if you hire somebody to manage your money instead of gimmick paying them commissions. Which was actually fine and the suitability rules. They now will likely take them use saying. Mom levels fees either as a percent of assets or flat dollar amount and the reason for that is because it allows more streamline compliance. For those advisors that to. Suspected easier for. Mercer in other words the suitability rules allowed them to recommend. High in the high you we commissioned products right on the over boy wonder what Mozilla. Or commission. And it really came down to that was the conflict down what you know. Was it suitable for the client the high commission product house probably suitable but wasn't in their best interest on the ports though was there another product that had a lower commission that repaid them a higher return much of the investor gather was but they didn't necessarily have to to show them out or solemn mom and now what they have to do we can still sell it now they have to disclose it. And so they have to say you know listen there is another one and you probably get a better return for a but it pays you less. And you know it's it's gonna do not gonna sell a lot of those who think if they weren't that worried. And so really in the end doll what I love about this is this is were I've been all along I have always acted in enough fiduciary standard capacity I've always been an investment advice or held to the two. High standard and love in our clients' best interest so frankly this represents no change the way I do this you didn't earn commissions arm on your product exactly right and you know Ali even goes so far to say it out last year 99%. Of our company revenue came from its investment advisory fees that were asset based investment advisory fees okay flat fear he retarded or exactly 99%. Of our revenue OK and if you look at our company. And the way we do business in the way we have done diocese. You know I laugh a little bit because she's here are these people that are trying to change their stripes late in the game arch and they're saying oh why you know I I abide by the new fiduciary standard. Well then the new fiduciary standard isn't new for me have been doing it for years and years time and secondly for them they may be doing it in some cases. But the question is how much of their business is that because meat and by the way ask that all you have to do is ask your existing it on investment advisor to say. How much your revenues last year. Came from commissions. And if that numbers anything over 65%. I would say you're not dealing with somebody who historically has been. Are held to this the your fiduciary standard and as a result perhaps you wanna work with somebody who has been. And didn't need the government to enforce it makes them do what we've always done that we've always acted in the best interest of our clients. Might this change the way he products are sold going forward might. Products that paid large commissions and maybe change the way they market themselves to advisors absolutely right I mean again this is. I think this is gonna have a significant impact over time it's not really been fully implement it and it's it's it's. It's still kind of in this burning in phase. And there it's still trying being discussed within the trump administration as to whether or not it will be and to what extent it will be implemented but for now its again. And we as I said. It's almost irrelevant to me because this is the way we've been operating for years and years. But I think they're an awful lot of people including many people frankly who do radio show they are selling products that are commission based products. And I think it's really important for our listeners to know. That if you're working with somebody like that they're getting paid a commission. Is that really in your best interest as opposed to being you know working with somebody who is held to a higher standard the fiduciary standard would ever right do is always in your best interest not to suitable it's in your best interest there's never any conflict with me I will always pick an investment for you. That is the lowest cost investment that I think will do the best for you for that the roll look out or playing your portfolio. All you've always conducted business under the fiduciary standard. But for folks who deal with a another a financial advisor. They should ask what percentage of your business is commission. And as you said anything over 5% or so might be a red flag. Perhaps you give all the call the keys 8889727526. In 88972. Plan or plans strong dot com and Paul welcome back we're going to talk about the outlook for the rest of Torrey seventeen is a plaster our financial form this just. All Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office. 808897275260. That's 888972. Plan. Securities and investment advisory services offered through an extra two group member to me as I can see Clinton investment management is an affiliate business financial group thinks is look at this tiny Washington street diplomats who threw. Hi this is Bobby Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance for investment products though sometimes those benefit the seller more than the buyer. What makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter what your invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group pink member former SIPC plans to investment management does not affiliate of residential roofing and is located and I need to Washington street Dedham mass. Ground zero for your financial news and economic commentary. This is the plan's strong financial forum where Paul Corson resident home plans stronger investment management. John carver against the desk along with the ball and didn't falter in less than we were talking about this. The new fiduciary rule which is pretty much now in effect in and do as we've been talking bird for awhile but never. Really do. Doug is deeply and we just did so and once you get everybody has any questions about it because he can be confusing I think for investors. They should certainly give your office calling biamby to explain it to them dvd 972. 7526. But during the discussion ball you're talking about commissions yeah purses are flat feet cast. Doubt on when you when you sing commissions you almost it's probably good to dirty word. I mean personal doesn't sales commissions is is reasonable so why do you say it to the way you say and what does it mean to you. 088 canned you're right I I do have a bit of a disparaging tone about it because here's what's the problem is commissions upfront commissions actually move. What happens is people that are salespeople. Get into the business and they sell and they get paid a commission right up front. And then you never hear from them again that is not the nature of what we do for work what we do is we get paid as we go for the service that we provide our clients. We don't consider ourselves sales people we're not selling investments to people. What we're doing is selling advice to people were advising them. Where that we will literally manage your money for you. The end stocks bonds mutual funds each jacks whatever. That is we believe in your best interest and you pay us a small amount every year. While we're providing you that surfaced that's very very different than the model of hey I'm gonna sell you a product or service. And and and you're gonna you're gonna buy it you're gonna buy this mutual fund you're gonna buy the C checker gonna buy or whatever and I'm gonna make a commission on that and then you'll never hear from me again and so the question is what what happens when the environment changes in how should I still be in this should I do something else trip pay you another commission. And so forth is just now it's not in my opinion necessarily the best way to go for an awful lot of advise are for a lot of investors. And I think for socialism in this program are regularly hear her you just heard this week you know the amount of research and you do so wind. It as a financial advisor. That's something you take very seriously and spend a lot of time you and your entire team studying the market council so that when you advise is based on something that does not based commission shots it's based on what you think is going to be happening and what do you think is the better it is in the best interest of your particular car. And in the end what we're trying to do was generate the best return for our client at at the appropriate risk levels for them and the more you haven't fees and commissions the last that the client gets to keep Chara it's it's pretty basic excel or were trying to do is we've always tried to act in our clients' best interest and we always try to do with the lowest cost investment choices available that can succeed in and getting that best risk adjusted return so to. About best risk adjusted return let's head west or is it gonna go for Stephanie whereas even doing your research attending a lot of presentations so what does the next half twice and didn't look like coupon. Well that as you said it whether we redid or we go to these presentations. You know what we're trying to do was constantly Janet and updated assessment of to take on on the court environment and what our overall economy looks like and what the markets look like at this time we want to won this past week that JPMorgan Chase happened to run and the guy who did the presentation had a terrific analogy of kind of where we work on where this economy was war investors are beset. His son. Had just are gone to his first day of summer camp and his son is eight or nine years old cute childish and he said you know one. And when he came back. You know is Exxon came off the boss and his big smile on his face came bounding off the bus and and the child said you know that was the best Dave Camp ever and Annie said that's truly what the markets like right now across and anxiety about it but the best day of camp that. I'm and that's kind of where we are thought it was actually a very you know all time highs are right and arm and even though there is anxiety out there in the end it's really hard to argue with the results that have been generated so far this year. And looking forward now. The three main indicators continue to be pretty solid you know if you look at that it what we look at and others economic growth. Real GDP looks like it's always to be batter above you know Condit 2%. For the rest 2017. Job creation. Pretty good we added to over 200000 the last month we've been adding 180000. Jobs for the first six months we continue to be on track to add two million jobs for the year and that's essentially what we ought we added last year or not that's looking pretty good. And corporate profits that's incredibly important and I guess what corporate profits. Are poised to be the highest ever. And I and you know you look at what the growth disposed to be in 2017 for corporate profits highly likely probably run 9% growth I mean that's incredible. So. You don't chip 9% growth in corporate profits. And you just say the price earnings multiple stays the same that means that the price stocks go up snipers and break her and that's pretty basic math again right. And that's not including the impact of a tax cut gift the tax cut goes down. And it looks likely that that 9% growth would be closer to 18%. Growth is what they're forecasting. For corporate profit growth because guess why. All of a sudden your corporate tax rate goes from 35%. Down 15%. You get to keep a lot or the corporations money grow which is earnings after tax earnings pretty basic stuff. A lot of folks fall on TV and radio were screaming about the fact that there are the prices are still lie at the highest ever out and and you know obviously that's something to be paying attention to. But they don't get into the other half of that equation which dessert and. Of course and and that's one of the risks of course is our evaluations getting pricey and and again in this presentation I thought it was it actually made a very good case that across a bunch of metrics that we historically look at for valuations. What's the what's the 25 year averaged sixteen times earnings you know is it 10% hide out. Armed and there are other valuation metrics as well that are a little high. But there's also a valuation metric that is low and now it is the difference between the earnings yield of yes and 500 verses what a bonds pay as he yields another let me say it another way. Compared to bonds stocks still look relatively inexpensive on historical basis but. Again big green assaults. Bonds I believe are the price used asset. Known to man right now because of all the Central Bank involvement and so stocks are less pricey then they're logical alternative which is on its hand. As a result from a valuation perspective I'd say the other is some risk there. You know it's not as bad I think as some people portrayed in the media what are the risks do we have going for one another one as we talked about earlier so was the kind of unwinding quantitative easing and you know getting interest rates normalized. And maybe then some and the question is can attend the Fed and can other central banks unwind these programs. And do what a way that doesn't squash economic growth pissed as interest rates go up canned. And as the central banks sell lease securities to get interest rates to go up. Then what happens is. The cost to borrow some kind of the cost of barring goes up and companies don't borrow as much as they can afford to borrow this much apparent and so slows economic growth. And the other thing that's happening is it's not just the unwinding of quantitative easing. But it's also the fact that we continue to run budget deficits. And we had budget deficits how does the government fund those they. Issue more bonds sorry to pay for broad range and so not only going to be selling more bonds into the system that are coming off the Fed's balance sheet back into the system but at the same time you're running. Budget deficits of 6070800. Billion dollars at the same time. You know you're you're talking model wanna bombs going back into the market reaction have interest rates going up pretty fast and took to a significant degree. And I think Zacks what is really a risk is that the higher interest rates could slow economic growth and corporate profit improvements. We talked earlier about. The possibility of the trump tax cuts and the I get it looks to me is if that the tax cuts are actually built into it this market right now and if so. What happens if it's all. Well there are somewhat built project that they are not a 100% built in but they're not 0%. And as usual LaMarcus handicapping you know what they think will happen some things go happened something they don't so essentially. A portion of the probability is built ten but not a 100% probability not zero. And you're right I believe that if the tax cuts go through when they're what people think they're going to be. Then you're gonna see further upside in the market that the risk is of course that they aren't what people thought there would be or they were delayed or deluded or something. And now it's not what the market anticipated not even close friend and then you run into an adjustment happening not certainly passed the scripture bullets sounds like things look pretty good going forward generously you're absolutely right I actually cautious optimism is is the freeze of the overall spirit of the market right now there we almost visual program was gonna test social or social squeeze her senseless story to worry I let her do this I have to do this so. I'm you know there are a lot of people out there including Elon Musk who insist that government policy really isn't helping Tesla that much night I sit there and shake my head when I hear that but I'm I have to tell the story about. Tesla and Hong Kong the authorities in Hong Kong recently slashed tax breaks for electric vehicles on April 1 and guess how many hustles were sold. After they got rid of the tax and zero. It. All right and the price of tussle is in Hong Kong went from 75000. Dollars to a 130000. Dollars bond and as a result new orders for Tesla went to the big goose neck here so I have to tell idea that these these government subsidies do really impact us and why we're bringing up. Because this is legislative risk that's associated with this particular stock any stock whether it's electric vehicle or anything else that relies on government subsidies if those government subsidies go away because the whims of the politicians change then you could have a bad day. While holding that security that's certainly something as an investor you have to be aware off. Also free number 8889727526. Or just won't like to plan strung dog common set up a no obligation portfolio review our you positioned properly for the rest of 207888972. Planned well thanks for being with us have a great weekend it's the plan's strong financial form. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what immediate take a look at your investments and retirement plan called my office of EDD 89727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management is an affiliate business financial group thinks is located in Washington street domestically and six. And strong investment management is located 980 Washington street Dedham mass 0226. And can be reached at eighty 9727526. Political views may not reflect the views or opinions of next financial group the securities and investment advisory services offered through next financial group ranked number fender SIPC -- investment management has not affiliate in its financial grouping. 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