Welcome to your weekly dose of Rise UP!, where we break down the week’s top market and economic events to help you stay ahead of the curve. In this episode, your hosts, Terri Kallsen, CFP®, and Joe Duran, CFA, along with special guest David Mandelbaum, Portfolio Manager at Bleakley Financial Group, will tackle the hottest financial topics.
Terri Kallsen 00:16
Welcome to rise up where we take a look at the biggest stories each week, break them down to help you understand what’s happening in the marketplace, how to grow and protect our portfolios. I’m Terry Colson. I’ve been a certified financial planner for my entire career. I led Schwab retail and Investor Services. I’m a managing partner at Rise growth, and I’m also the char elect for the CFP Board. I’m joined here by my partner, Joe Duran. He’s also the co host of our show. He’s currently a managing partner at Rise growth. He was a former partner at Goldman Sachs, a CFA, and the CEO of one of the largest fiduciary RAs in the country, and just a serial entrepreneur. Our third host today is David Mandelbaum. David has been an expert in the healthcare field for over 20 years. He is currently the portfolio manager for Bleakley Financial Group. He manages the benastar investment strategy. He was a former portfolio manager of the healthcare sector at omega advisors, and before that, he was an attorney in the healthcare industry specializing in health policy and regulatory issues. Welcome Joe and David. Thanks, Derek, thank you guys. Let’s get right to the big three stories this week. It has been an exciting week. The S, P is way up this week, we’ve had several data releases, and it really shows the economy isn’t necessarily slowing as quickly as the Federal Reserve may be anticipated. But let’s take a look at some of these numbers. The consumer price index rose about 4% from November and 2.9% over the year. This has been the fastest increase in one month since February of 2024 wholesale prices up 2% you know, earnings reports by the banks have exceeded expectations, and as a result, the 10 year treasury has pulled back after last week, when we said it was going up. So this has been a big week, a three day rally. It’s only down 12 points, and it’s hovering around 5900 at the S and P so, you know, Joe, the market is clearly thinking the Fed is going to reverse itself on reducing interest rates. What are your thoughts here? Well,
Joe Duran 02:33
first of all, it’s great to be in New York. It’s really cold and really fun to be here. You forget when you come from California, Terry, how cold it could be out here, and I believe it’s going to be even colder, but it’s been an amazing week for the market so far, obviously. And I think three big things have been happening that you pointed out. Number one, inflation doesn’t appear as bad. That’s allowing for people to think, okay, the Fed has breathing room. They’re not going to have to increase rates, and they have the latitude now to think constructively about moving rates down. That’s been very, very good for the stock market. Obviously, earnings have been really good, led by the banks, which are two things which shared by all the banks. Number one, not only have their earnings been great, but they’re speaking about a really healthy economy. And in fact, no matter what your political stripe, it’s very clear the business talk, at least by all the big banks, is that people are going to borrow more money. Businesses are going to borrow more money. They’re very looking forward to doing more M A which is good for all the big banks, especially Goldman, Sachs, JP, Morgan, that do a lot of M and A activity, IPOs, etc, so the business environment is very optimistic, and that’s creating a lot of really optimism in the market, wanting to take risk on and invest more in stocks that money’s come from bonds, where we’re seeing some correction there in the interest rates. We’re still very high. We’re still much higher than we were when we broke 4% on the tenure, but still it’s pulled back some makes equities more interesting. So the third thing that I think is quite optimistic is we’ve got the final transition happening to a new a new administration, and we don’t know what that will mean, but for now, it’s still it seems like it’ll be less regulation, which, whether it’s good or bad for consumers is unknown, but it’s probably good for business, and while we don’t know what the tariffs will be, clearly the stock market, after some pull back the last couple of weeks that said, Hey, we’re back to being optimistic again and again. I wouldn’t read too much into it, except for one thing, Terry is we always say, as a CFP and a CFA, don’t try to time the markets, because if you try to guess what was going to happen, you missed a really strong couple of days where, frankly, we got a month’s return in one day. You know. So. Is a very, very constructive couple of days. So you want to be careful about trying to guess which way it’s going. Yeah,
Terri Kallsen 05:06
you know, the Santa Claus Rally showed up just a little bit late this year. But I also have a lot of optimism. David, how are you feeling about that? Yeah. I
05:16
mean, I’m generally encouraged. I would say that with regard to the rate environment, that one of the breaks on on things, and it’s going to continue to lead to higher volatility, is just the uncertainty as to the impact of the new administration’s policies on the inflate, on inflation. So the Fed is likely to be in a wait and see mode until there’s more visibility there, but certainly the animal spirits have started to infect the C suite, as the banks have have noted, which is which is very positive, but this and this volatility is also good for their trading revenue. So good signs, but we’re also a very early stages of the
Joe Duran 06:00
Hey, David, cut you off for a second. I’ve heard this term animal spirits. It seems to be everywhere lately, and I’m trying to figure out, what do you mean by animal spirits, because it seems everyone seems to be throwing this term another terms that suddenly become popular. What is an animal spirit? What are you referring to?
06:19
Well, it’s it’s investors are typically governed by fear and greed, and this is the greed mode, where people get excited and are more focused on upside opportunities and perhaps downside risk, and it tends to feed on itself. Of course, when that gets too much on one side, then that that can be a cause for concern.
Joe Duran 06:42
So I think there’s, there’s a gentleman called Harold Howard Marks, runs a very big hedge fund, who says, All investing, you’re on one side of the See, saw the other, fear of missing out or fear of losing money. And right now, a lot of people seem to be tilting to the fear of missing outside, and the more people tilt, the bigger the seesaw is going to swing in the other direction, which is why I think we both believe volatility is probably going to be increasing over the next year, because there’s a lot of crowded interest in some areas, like AI, for example, where there’s just so much optimism. So thank you for that and that those animal spirits also reside in the in the C suites, I assume. Yeah, those
Terri Kallsen 07:26
animal spirits. That’s right. But here’s the one thing I can tell you, David, and you’re in the healthcare field, the one prescription that I think all of our viewers would benefit from in the first quarter is a financial plan. Right to overcome that fear and greed. If you’ve got a plan and you stick to it, you can actually achieve the intended outcomes without all the ups and downs as we’re going through. But let’s get back to healthcare overall. Our second big story is really about the JP Morgan annual healthcare conference. And you know, I’m from San Francisco, this is a big event. I used to run the 5k that goes along with this health care conference every year. It really brings a lot of energy to the Bay Area, but really, right now, Barron is saying the health care industry, it’s not doing so well. And we just saw United Health Care’s numbers. You know, they’re not hitting their targets. What is driving this under performance? And is this an opportunity for investors? Yeah,
08:21
well, healthcare is devoid of the aforementioned animal spirits, that’s for sure at the moment, but so healthcare dramatically underperformed the market in 2024 in fact, it was the largest magnitude of underperformance for healthcare in three decades. And I would point to two factors that drove it. One is market structure. You know this, the market, the breadth of this, the stock market now is historically narrow. The Magnificent Seven constitutes 1/3 of the entire S, p5, 100 to market cap. Now that compares, by point of reference, to the top 10 stocks at the peak of the.com bubble in early 2000 constituting 27% of the of of the s, P’s market cap. So health care has disproportionately funded the rotation into those seven mega cap tech stocks. But that begs.
Joe Duran 09:21
Sorry. If I could just stop you for a second. I’ll make sure we understand what you’re saying here. There are 500 stocks in the s, p5, 100, and you’re saying that seven of these stocks represent almost a fifth of the entire value. So almost like they represent almost 100 companies, 1/3
09:39
1/3 1/3 so 150 or 170
Joe Duran 09:44
almost. But it’s just those seven companies, I think, is that the money that they’ve gotten all the performance. The other side of the equation is healthcare has wildly underperformed, which is one of the reasons the S, p5, 100. And well, but nowhere near as keeping up with those seven big stocks. Yeah,
10:03
exactly. And healthcare as a sector now it comprises 10% of the s, P’s, waiting and traditionally 13 to 16% and health care is 18% contribution to GDP. So there’s a there’s a major disconnect there, but it begs the question as to why, and some of that is fundamentals, but the main reason is really the dramatic rise in perceived policy risks. And there was just a confluence of events in the latter part of the year, RFK Jr’s nomination as HHS Secretary the new announced Doge department, to be led by Elon Musk and Ramaswamy, the tragic murder of United Health executive, and then the media portrayal of just widespread disaffection with the health insurance industry. And then there was some legislation anti PBM, legislation introduced and Trump made some negative comments about healthcare middlemen. So all of that together has dramatically raised the perception of policy risk. Now, those of us who have invested in health care for any period of time have seen this movie before, multiple times before, whether it was Hillary care, Obamacare, Medicare for all, and I would remind folks that while those movies were scary at the time, they all had happy endings. So what are the conditions for this movie to end happily? One would be fundamentals and growth, and there are pockets of the industry that should see accelerating growth this year. Second would be valuation and healthcare. Now has reached the point at a 20% discount to the market multiple, where it’s typically bottomed, and then third would be importantly, that a dissipation of those policy risks, and we expect that to occur over the course of the year. Now, the recovery in the sector won’t be uniform. They’ll be winners and losers, and it’s a job for someone like me to navigate that appropriately, but the opportunity set should be much better going forward we expect, than it has been in 2024 certainly. And David, when
Joe Duran 12:11
you talk about healthcare, there’s like the drug companies which have not done well, there’s the insurance companies which haven’t done that well, and then there’s the care providers, which also haven’t done particularly well. When you look at the three, a lot of them have dividends. A lot of them are multiples that seem reasonably attractive. How do you think of those three? How should a person watching this think about, Hey, should I go look at an Eli Lilly with a really attractive dividend? Or should I look at the etnas of this world, like, how should you think about those three elements, or the elements I’m not considering when you’re looking at this very beaten up and perhaps rosy outcome when no one likes that investment?
12:53
Yeah. I mean, judge a great point. And and healthcare is is vast and not monolithic, and people sometimes make the mistake, and in a period like we’ve seen recently, they all the babies are thrown out with the bathwater. So it doesn’t matter, everything gets correlated, but typically there’s wide dispersion and opportunities for stock picking. The two areas that I would find that are actually most exciting for us are the areas that are least exposed to policy risk, even in a worst case scenario, and that would be the medical technology space companies like Boston Scientific for example, and also the life science tools and diagnostic space companies like Thermo Fisher. With regard to pharma, there’s wide variance in in companies, we’re more interested in growth companies like Eli Lilly, which have gotten beaten, beaten up because there’s been some challenges getting through with with supply and inventories. But the the the growth opportunity in the addressable market is just no pun intended, enormous for the obesity space, and they’re the entrenched leader in that space, the more value names, whether it’s like a Pfizer, it’s we’re less interested in, because even though they’re very cheap, they’re cheap for a reason, and they have severe growth challenges. They benefited from COVID related bolus of revenue streams that have now dissipated, and they’re facing major patent cliffs. The health insurers, the HMOs, are a little challenging here. UnitedHealth is, as Terry noted, had tough earnings this morning. The the closely watched medical loss ratio was, was elevated because healthcare utilization is elevated and they’re they’re adversely impacted by that, but they’re also in the eye of the storm of the policy risks. So there are better opportunities elsewhere, and the provider side to the providers, the hospitals, while they’ve their current fundamentals are good, they actually have some. Very real risk if, for example, the Obamacare exchange subsidies are not extended, which is a real risk. We their site neutrality reform, site neutral reform, is implemented, things like that that actually would would impede their would impact their, their business model, and EBITDA going forward. So lots of opportunities, but also one needs to be careful, as always in the space I’ve been
Terri Kallsen 15:24
doing some reading recently, David, that striker may be bound to have a recovery here too, because they certainly have been a battered down stock as well. So there’s still potential out there. Right?
15:35
Absolutely, lot of exciting opportunities. That’s right,
Terri Kallsen 15:38
all right. We always have our third story, and this may be one that the audience missed, but I think it’s a really important consumer story this week, Capital One may have to open its own wallet, and if you know Jennifer Garner, she always asks, What’s in your wallet? Well, the Consumer Finance Protection Bureau, she’s they’re suing the company, claiming it cheated out clients of out of $2 billion by underpaying on high yield interest savings account. We do hear these stories where we’re not necessarily giving the very best advice for the client’s growth of their portfolio. So we saw this in the earnings report this week, the banks are making more and more money. But what’s the takeaway here, Joe, for clients and
Joe Duran 16:20
investors? Well, I think first of all, banks make money in three different ways. Number one, they make money on the spread between short term and long term interest rates. So you put money in the bank, you get a yield, and they lend it back to consumers to buy a house, typically for longer terms. So if there’s a positive curve, which we have now. We had, for a long time, an inverted yield curve. Banks make more money, so I can’t speak to what Capital One did or didn’t do. I know that the administration is being very aggressive litigating right now all kinds of businesses, but clearly they were not passing on at least the allegation the interest rate they were supposed to pay their consumers in a supposedly high yielding account. It was, I guess, an almost high yielding account, but not as high as it should have been. I don’t want to get into that, because it’s open regulation, but I will say that banks make money on that spread so the less they pay you for your for your money you have in the bank, and most of you in a savings account that has, you know, no liquidity, or immediate liquidity, or getting almost no yield. So they’re keeping that entire four or 5% spread, because if you have a bank account, likelihood is you’re not getting paid anything at all. Maybe it’s a few basis points. So that is not a crime that’s known. We know in our checking accounts, we don’t typically get paid, but if you have a CD or high yield savings account, you should be getting that high yield. Whether this bank did or didn’t is secondary to the fact that if they can lend you the money for more they make that spread. The second way banks make money, especially investment banks, is by providing liquidity, whether it’s taking you public, providing debt facilities for corporations. That’s another way to make money, and that part of the business has been booming lately. The best example is a firm like Goldman Sachs that has a really, really robust M and A business JP Morgan, same thing. And then the third way they do it is providing capital to corporations in various ways. And that business is very, very optimistic outlook. And that’s more of the Main Street banks that are providing businesses to small businesses, money to those businesses and so on. All those three pillars, things look really good. And the interesting thing is, valuations on those banks are still certainly compared to the tech companies, much, much lower. And if you then remove and reduce the regulation, which is what is anticipated by a lot of the banks, because the administration, while still looking to protect consumers, probably won’t be as aggressive about regulation that allows for increased margins, increased business and again, it’s not always good for consumers, lord knows. But what we do know is that if you’re an investor, and these stocks are still relatively well priced, you can still make some good money, and a lot of these banks also generate nice dividends for their for their clients, for their investors. So again, it’s a conflict in the industry, of course, for all of us, that what’s good for us as consumers might be very bad for us as investors, and what’s bad for us as consumers can very often be good for us as investors, which is one of the dilemmas that is true of all business, unfortunately.
Terri Kallsen 19:35
All right, great. David, you know you work for a great Firm A fiduciary, with advisors. What kind of consumer advice would you give in this scenario?
19:43
Well, you know, we’re governed by Transparency and just in aligning our interests completely with with our clients. So to the extent that others are not doing that, you know, they’re, they’re they’re not doing their. Job. So we this is what is our mission, and it’s as long as as we adhere to that, we’ll be protected. Clients will be protected, and we’ll all succeed.
Terri Kallsen 20:15
Yeah, always doing what’s right for clients. First and foremost, I think
Joe Duran 20:18
you have to remember your relationship with your bank. They’re in the business of providing services and products. They are not fiduciaries, and so the reason you have an advisor in your life is to help be on your side and get paid by you directly, not by the underlying products. So again, it’s one of the blurry things. For most individuals, it’s hard to tell the difference, because you don’t really know, but there is a big difference between somebody who’s paid for selling products versus somebody who’s paid by clients to take care of them. We have a different set of responsibilities.
Terri Kallsen 20:52
Yeah, that’s right, all right. Now we’re moving on to the three big questions. This is where our viewers get to ask us questions. And it’s really about any trending story, and there’s no better trending story right now than the fires taking place in California. We talked about this a little bit last week, but, you know, I live in California. Joe lives in California, but let’s take a look at the latest data. The death toll is up to 25 more than 100,000 people have been displaced so far, you know, last week we said damages may be around 50 billion it’s up already $250 billion we also talked a little bit about the California fair plan that covers our homes and businesses who can’t get insurance, which is very common in California. It only has 370 $7 million in the fund. So Joe, our first question is, what are some of the first steps people should take so that they’re somewhat financially prepared for an unexpected disaster like a fire or flood?
Joe Duran 21:53
Well, we’re going to do a full episode on this next week, because we think you need a checklist. The number, I call it, the a list, prior to any big crisis. And we’re all going to have some one, and sometimes it’s going to be just to us. We’ll be in a car accident, or we’ll get diagnosed with cancer. Sometimes it’ll be to a whole community, like we have in this case. And this would be true in all instances. You need to have what I call the a list. First was accountability. Who owns what when something happens, and in this situation, we have, I have a lot of friends who lost their homes. Some of them are standing but in communities that are now wastelands. So my heart goes out to them. There’s a very important question you’ve got to ask, which is, first, if a fire comes, who’s in charge of getting what? Where do we go to when there’s an issue? Who do we go to to make sure that there is an answer when there’s a question? And so having first what things need to be accounted for, and who’s in charge of that, the owl is for liquidity. We always underestimate that we don’t need to have cash in hand or money in the bank. We sometimes invest in the liquid investments, or put all of our money in our house, and all of a sudden, something happens, and we now need access to capital. And when we do asset allocation, we often think about risk and reward. We don’t often think about liquidity and illiquidity. And in a time of crisis, whether it’s a market crisis, whether it’s a real estate crisis, whether it’s a tragedy like we had with the fires, having liquidity is very important. These people who are getting no insurance, who have to wait for insurance, but they have to pay rent. If you don’t have enough of a safety net, it creates absolute chaos, even if you have a job, even if you have income, because a lot of the people in Pasadena and Altadena are not as wealthy as the people in the Palisades. They’ve lost their homes. They still have a mortgage insurance is not going to come around for a while. They have to live somewhere. People are doing now, gouging on pricing, and you still have to, like, put your kids in school and deal with the day to day, and you’ve lost all your clothes so there’s a safety net. A situation like this might make you think about, Do I have enough in liquidity to deal with this? The third that the I and I a list is indebtedness. How much debt do you have on your balance sheet? Because you’ve got to still take care of that with we tend to as an American society, be very glib about debt, but it compounds out. The less that you have, the more latitude you have When a crisis hits. The third one is simplicity. It’s remarkably easy to complicate your life, doing complicated things, buying assets that are not easy to get access to. That’s another area, also making sure people know where is everything. So having a list, and the last one is transparency. If you don’t know where everything is, if you don’t have an accounting of how to get liquidity, how to get money, how to move things around, how to deal in a tragedy, and where to go, and you don’t have. Have a clear follow up list that is protected on the cloud, on your phone, with somebody that you trust. It’s very hard to deal with it. So with all things, preparedness is number one. Almost none of us prepare for a catastrophe. We’re very good at protecting imagining the good. We’re pretty good at imagining some bad outcomes, but very few of us imagine what would happen if I had a heart attack tomorrow, or I got hit by a car, or a fire burned my house down, and once in a while stepping back and saying, Have I taken care of this a list, and again, we’ll talk much more about this next week, but being prepared is number one actually talking about it as a family, what would happen if? And that’s not to spend all your life thinking of tragedies, but making sure that you’ve thought carefully about what you would do if,
Terri Kallsen 25:49
yeah, certainly with families. You know, my husband and I, we have three children. We did a lot of fire drills growing up. You know, where are we? Where do we go? Where do we meet? In case there’s a disaster? The other thing is just having a safety deposit box for all of your basketballs, right? And on TV, you’re seeing all these families go back and find their most valuable documents or wedding rings or things that really meant things to them that have been protected. So let’s go on to our second question, which is really around you know, not having that insurance for hurricanes floods, if your state insurance doesn’t cover it, the value of your house and the value of all your valuables, what? Where do you go? Where’s the first place you should start? Joe, you want to take that one? Well,
Joe Duran 26:31
look, there’s no easy answers here. The first thing you’ve got to ask is, can I afford to self insure if you cannot get the outside insurance, and in California, I can tell you, almost everyone lost their fire insurance and has to go to the California FAIR Plan, which no doubt means higher taxes coming up because 370 7 million will not scratch that’s one block in the Palisades. Never mind the many blocks that got burned down. So we can count on higher taxes. But for yourself, the first question is, what assets that I that I have, am I willing to self insure? Which means, if they go and disappear, will I be okay if we are borrowing money or owe money for those assets? That’s a huge problem. So assets like a house on which you have a liability but do not have the offsetting asset. That’s a huge problem. The second is, if you can’t get insurance, how do you make sure that it’s in the safest way possible? You talked about putting things in a safety deposit box, putting things in a place where they can, in fact, be safer, because that likelihood now that you’re self insuring something bad happening is higher. The third obviously, is don’t have anything bad happen to the thing that you care about, and if you can’t afford to lose it, maybe you shouldn’t have it, which is being protective and going, I can’t insure. And by the way, the one lesson for all of us, if the insurance companies couldn’t charge us enough money for the insurance, and therefore we’re not offering insurance, we will all basically in California taking a bet that we know more than the insurance companies do, which is like going to Las Vegas and saying, Oh, I know more than they do. Will this ultimately have an impact on home prices? Of course it will. Of course it will. But in the meantime, because we haven’t had a crisis like this, or like a major earthquake, which helps to dampen some of the things and allows that to normalize. I think ultimately, I don’t know how we solve for this housing problem in in very high risk states like Florida, but we all have to realize, can I afford the implications if I have no insurance, and a tornado comes and takes up my house, as it might happen in South Carolina or Florida, and we tend to never think about that outlier event and that if it occurs, turns our lives completely upside down, I always suggest speak to an advisor or a planner to understand what off balance sheet risk you have that and what it would mean to you? How would you navigate it? So these what if scenarios are very useful, and again, not to do all the time, but once in a while, to take time to say, where are we protected, and how would we deal with it if something really bad happened? That’s
Terri Kallsen 29:15
right. And you know, we talk a lot about, you know, saving money and emergency funds, but a lot of viewers are saying, you know, inflation and all of my other expenses, it’s just not that easy. So David, I’m going to go back to you as a fiduciary. You know, how can you get the help for these types of clients?
29:33
Yeah, it’s, it’s one of the great things about bleakly, is just the breadth and of service that we have, and we have experts on in anything. So whether it comes to it’s not just financial, but life needs. And so it’s having an advisor you trust with a team surrounding that person and and, um. Yeah, and the deep capabilities to to support you and in your life journey. And that’s really, I know that that’s bleakleys mission, certainly so. But there’s other great firms out there as well, but that’s, you know, that’s the advice that I would give. Yeah,
Terri Kallsen 30:19
I agree. Just having competent, ethical financial advice is so critical, and I know bleakly, does a great job of that. But let’s move on now to the Big Three for next week. So we’ll all join together next week again, but there’s going to be some key inflation data released by Canada and Japan. Joe, what should we be watching for?
Joe Duran 30:41
Look, I think we’re going to the US is a harbinger for what’s happening in the rest of the world. I think you’re going to see a moderating of inflation everywhere goods and underlying material prices have stabilized. And the reality is, while the service side of the business is high and hot and really in the US, in particular, service, goods, rentals, those kinds of things are very lofty. That is not the case in Canada, Japan. They don’t have the population influx that we have. So I think you’ll see nothing exciting there. I’m not overly concerned about what they might come up with. The US tends to be quite ethnocentric. We don’t really care what happens outside of waters and the dollar, the only thing to look at is dollar has been remarkably strong, and so if we continue to see weakness there, the dollar will continue to get stronger, because we tend to have a, you know, more higher interest rates, which makes our dollar more attractive. And if they continue to see inflation or deflation, start training to lower levels, then they could make their currencies even weaker. So if anything, that’s one thing I’d keep out, but I’m not overly concerned about that. That data, yeah,
Terri Kallsen 31:51
and then there’s other additional earnings reports coming out several blue chip companies, Johnson and Johnson, Proctor and Gamble. American Express. David, what are your thoughts on this? Well,
32:02
yeah, Johnson, Johnson is clearly a an important company in the healthcare space, so I’ll be laser focused on that report, and really because as the bellwether in both the pharmaceutical space and the med tech space, what they what they say, what they guide to, what they report, will have important implications for companies across both of those sub sectors. So on the pharma side, will be most interested in their commentary around the impact of the 2222 inflation Reduction Act, drug pricing provisions and their outlook for drug pricing policy generally, going forward. On the med tech side, it’s more about growth, market share trends in key verticals, cardiovascular orthopedics, you mentioned striker earlier, as well as any updates on their developing surgical robotics platform?
Terri Kallsen 33:02
Yeah, I think those are some really important innovations coming out. But the third big story you know for next week is President Trump is going to be inaugurated on Monday, and there’s several policies he’s already talking about, the external revenue service for tariffs, tariff hikes using emergency powers, energy dominance policies, Joe, what should investors be doing about all this? Well,
Joe Duran 33:25
first of all, we can all agree that President elect Trump is an incredible Brander. I just think it’s external revenue service is such a smart idea, just the naming of it, and then you know all kinds of things, like naming the Gulf of America is that it Gulf of Mexico, the Gulf of America, which is quite amazing. So I do think that we don’t know how much of this talk, and that’s where we’ve got to be concerned, because, again, tariffs can have all kinds of unintended consequences. We don’t know what exactly he’s going to do, is a country based, is it product based? Is it on materials? Was it around services? Is it on finished products or raw products? All of these things have implications. We don’t know if it gets offset by a currency or not. The reality is, we’re entering a new world with all kinds of new ideas. It’s going to have implications and increase the volatility in the market, it’s going to create winners and losers. Today, what you should do is celebrate the fact that we’re in America and we have a peaceful transition of power, which does not happen in most of the countries in the world. And secondly, make sure that your portfolio is allocated in the right way. So if we have any big whip source, you’re not overly exposed to any one sector. And secondly, that you are diversified in a way that your overall risk exposure, your beta on your portfolio, is something you can live with and do a simple test, market falls 20% will I sit tight and be okay? So again, those are the two big things. Don’t be too allocated. It to an era. As David said, the assets that nobody likes right now, like healthcare, might be the winners over this coming year. So you want to have exposure to everything. That’s why you work with a good advisor. And second of all, don’t have too much risk. So if the market swings wildly one way or the other, you’re getting enough and not too much. And if it goes down, you’re getting enough and not too much. So again, our job, whenever you’re in the seesaw between risk and fear is to be somewhere in the middle, so that you can be a little bit disappointed a little bit happy at the same time.
Terri Kallsen 35:33
Yeah, I agree. And really thinking about the long term vision, not necessarily what’s happening this week or next week, but what is your plan? How do you stick to it? How do you work with your advisor and celebrate some of the wins? Right? Because we’ve had a lot of good wins economically that we need to really celebrate this week. So that brings us to the end of rise up this week. As you know, we’re just getting started with rise up, and we really want to hear from you our viewers. What are you interested in what are we covering that’s working for you? What would you like us not to cover that’s just as important? So please let us know your thoughts, and we really want to welcome you back next week for the next edition of rise up. You.
