With markets rebounding on the back of a 90-day tariff pause and U.S.-China Trade talks, investors are asking: Is now the time to buy, or wait for the next drop? In this episode of Rise Up, Rise Growth Partner’s Joe Duran is joined by Scott Schwartz and Alexis Miller of Bleakley Financial to break down what’s really driving the markets and how disciplined investors should respond.
What you’ll learn:
- What the U.S.-China tariff pause means for stocks, bonds, and small businesses (there’s no trade deal yet)
- Whether the Mag 7 comeback is sustainable or overhyped
- Why international and value stocks could outperform in 2025
- The smartest way to build a bond portfolio in today’s rate environment
- Where Bitcoin fits inside a diversified plan
- Why regular rebalancing beats market-timing every time
- Why small-cap stocks are lagging, and what that signals for the economy
Stay calm, stay disciplined, and make smarter moves in a headline-driven market.
Volatility got you concerned? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/3F6XMN0
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Scott Schwartz 0:00
Three months is not a timeframe to be an investor, right? You could speculate. I mean, I think there are people out there, if you think that, you know, like some of my clients, that Trump is playing 3d chess and everybody else is playing checkers, then you know, maybe you speculate. We wouldn’t recommend that. Look, if I’ve got a five year time horizon, I want to be in equities. We like we like US equities. We want to be diversified. We think that value. Stocks are probably a better value, non US equities, as we talked before. But if someone’s got, you know, a need for money in the next 90 days, six months, 12 months, even 24 months, I wouldn’t have that money in the market anyway.
Joe Duran 0:42
I Joe, Hi everyone. I’m Joe Duran, and welcome to rise up. Our weekly review of the markets and all the big stories and a conversation with some of the most brilliant minds in the investment industry and in the planning industry to talk about not just what you should be doing with your money, but how you should think about your financial plan as well. Unfortunately, today, Terry is not with me, so you’re stuck with a CFA and no CFP on this side of the house. But we do have two brilliant people, one of them is a CFP. So Scott, it’s great to see you and welcome Scott, as many of you know, is a partner and senior leader at Bleakley, a 10, I think, $12, billion firm in assets, 1000s of clients that they look after every day, taking care of their financial lives. And we also have Alexis Miller, who is the director of research there, Alexis, welcome. It’s great to have you on and you’re going to be talking about the investment side of the house. And obviously it’s been a really fantastic week. As you know, on this show, we really like to keep it conversational. We also love your feedback and your questions, so we’re going along. Please feel free to welcome we do have today open questions from folks, which we’re really excited to talk about. Obviously, the big story this week, far and away, was the the incredible market ambulance that we’ve seen. It’s been fantastic, Scott and everyone’s, you know, the last few weeks, we’ve been talking about, hold on to your hats and and concerns about going down. But we’re seeing some really strong markets here. We’ve recovered. I think we’re a bull market territory once again on the NASDAQ, although we are still negative for the year and the s, p5 100 has now ticked positive, as has the Dow for the year. Obviously, we’re still down from the peaks which were reached early in the year, but the NASDAQ, again, is up over 20% from its lows, although still below end of year last year, and well below the peaks that we had. But obviously we’re seeing that happen. We’re seeing the mag seven go up, and we’ve seen Bitcoin resurgence back over 100,000 so lots of things happening. All triggered in large part, I think we were in a reasonably good stable place, and then we had a lot of progress that appears on the tariff front. And I think the biggest igniter to this market was the 90 day pause that we saw in China. So I guess first, let’s talk about what this all means, Scott, and how should people should be thinking about what’s happening right now. We’re going to do a deep drill on the tariffs. We have some great questions on what it means. But Scott, I love your thoughts on what’s been happening with the markets in general this week, and obviously we’re following now several weeks of momentum of new highs from the Recovery Week after week and positive week after week after week. So how you feeling about things?
Scott Schwartz 3:33
Generally speaking, we’re feeling pretty good. Everybody feels better when the market recovers. We had talked about this a little bit offline. Look, it’s going to be a process, right? This is a 90 day pause. I think there’s a lot of people out there are hopeful. The market seems to be hopeful that cooler heads will prevail, that they’ll negotiate kind of a reasonable deal around all these tariffs so they won’t be that damaging. I think we’ll probably get to a point, though, where maybe there will be some pushback from one side of the other. The market might have a negative reaction. So I think people should be patient, looking at the market. I think that people should be mindful of their liquidity. There might be an opportunity here, if things do go sideways, for the market to drop and it might get sloppy as we get into the late spring, early summer. So I think if people do have a liquidity need, they should be mindful. I don’t think this is the time to go all in, but I do think that things seem to be lining up better than I think a lot of people feared 30 days ago. So yeah, we’re relatively optimistic, and
Joe Duran 4:32
Alexis is a big part of what you do every day. Obviously, valuations, we have more uncertainty about earnings, although the earnings reports have been pretty good, but a little optimism here, but valuation is still quite frothy, obviously a lot higher than they were just a month ago. So how are you feeling about things and from an investment perspective, yeah,
Speaker 1 4:52
I think that’s exactly right, Joe. And you know, q1 earnings, to your point, were stronger maybe than feared. And. Um, but I think I agree completely with what Scott had said. You know, we’re still in this transition period, and what ultimately happens in the next 90 days will determine the path forward. But I think something we’re reminding ourselves is, you know, even though q1 earnings were good and maybe there was some pull forward and inventory stockpiling that helped sort of mask what is going on that there is still disruption, you know, that is happening every single day, and that has occurred with all of the uncertainty this year. And that might, you know, come through and be more evident in q2 and q3 earnings, which we think you know again, could be a driver for things to reverse themselves, just given all the very quick exuberance that we’ve experienced in the last week on the heels of the China News. So
Joe Duran 5:45
Scott the inflation news has actually been quite, quite good. And even the economic news has been quite good. We had a couple of shaky numbers maybe three weeks ago, four weeks ago, things seem to look pretty good when you look out. I know you have been thinking and talking a lot about being diversified, being in different asset classes, I believe the international markets are still far outperforming the US so far, year to date. How do you think about that US versus International? In this context, when the US seems to be recovering, is international participating? How should you think about it? As a financial planner, yeah,
Scott Schwartz 6:21
we still feel like non US equities are still very cheap relative to US equities even as much as the market has come down. So we’re still going to maintain in our practice. We’re still going to maintain a good non US equity position, 25 ish, maybe percent. We still like America long term as a market, but there’s so many large multinational companies out there that are domiciled someplace else, whether it be Europe or Asia. And because of the fact that there are non US equities, in the last 10 years, they’ve been cheap. They’ve been unfairly, I think, priced, if you will, not loved so again, yeah, we like going forward, non US equities, and we think value stocks are still fairly attractive, but yeah, we’re still going to maintain our diversified portfolios going forward. We think the strength of the portfolio is going forward between now and the end of the year. We think we’re going to get more return from our non US equities, from our value equities. Our health care manager is pretty optimistic, even with all the negative news we’ve seen in health care in the last few weeks. So yeah, we think being diversified going forward is still going to make a lot of sense. So Alexis,
Joe Duran 7:26
a lot of the folks watching on assets like bonds and obviously interest rates have been kind of interesting here. We still are pretty high relative to what you would expect. So and I noticed actually, that the spread for lower quality debt has narrowed. So a lot of the risk that had been put back into lower quality debt has actually narrowed. So talk a little bit about the debt markets. If you own bonds, should you be in the high quality US Treasury? Should you be more in the junk bonds, or high yield bonds, as they call them more politely, any thoughts on the bond market?
Speaker 1 8:02
Yeah, to your point, you know, rates still are elevated, and all of the commentary that we’ve really heard out of the Fed is more dovish, and they seem to be a no, no rush to cut rates. And again, to your point, you know, the 10 year remains pretty elevated in that four, you know, three to four, four range. And that’s also something to think about from an equity perspective, where you know it does have an act as a headwind to valuations, especially as you approach, you know, closer to four and a half percent on the 10 year. So generally speaking, you know, in our fixed income sort of investments, we are still, you know, staying lower duration. Lower
Joe Duran 8:44
duration means, obviously shorter term, like not out three, four, maybe 10 years, maybe 345, years exactly,
Speaker 1 8:51
and also sticking with higher quality, because, you know, you’re not really getting compensated for going further out in terms of duration and extending that, or, you know, going further down, sort of the quality
Joe Duran 9:07
stack, yeah, you know, again, six weeks ago, I think there was about 150 basis points. So if you had a lower quality bond, you were getting 6% now you’re back down to very small spreads with junk or high yield and US Treasuries, so you’re taking a lot, lot more risk. Obviously, if the economy goes sideways, those are going to spread again, and the value of your bonds go down a lot when you’re looking at bonds and building a portfolio. Scott, I’d love your thoughts. Tell me a little bit about how your clients think about this sort of question, like, Okay, if I’ve got 50% in stocks and 50% of bonds, what do you like to do with those bonds? Is it ladded Munis? Is it high yield? So you get a little bit of a premium return if a higher, higher income yield, obviously a 4.4 that makes a financial plan much. Easier to do than when we had 0% interest, but the spread is almost the same as when we had 0% interest. So how do you think about bonds when people are contemplating what to do with their non risk assets? Because I think most people think of bonds as a as a lower risk investment that they’re looking to generate yield rather than get capital appreciation. Yeah,
Scott Schwartz 10:20
I’d look at that a couple of ways. One is given all the uncertainty out there right now, and you’d mentioned this before, and Alexa, Alexa, sort of, you know, kind of agreed, I guess that. Why take the risk now? So certainly right now, we’re not going to want to go down on the credit, you know, spectrum. So we are very intentionally in high quality, relatively short duration bonds. How we look at our bond portfolios for our clients? We’re very intentional about that. So we’ve got clients where they’re going to be retiring in the next few years, or maybe they’re already in retirement, we use bonds as income. So we’ll ladder a bond portfolio. If I’ve got a client who needs a few $100,000 a year of income, we’ll look at, you know, laddering bonds so that they’ll mature as we need that money right to cover their annual expenses for retirement, along with the yield that the portfolio throws off. So, you know, our bond portfolios are there to provide liquidity down the road. Using ladder bonds a great way to know exactly what you’re going to get and when you’re going to get it. So, yeah, we’re very careful there, you know, we love to use taxable bonds where we can in an IRA account, right, or a pension account, where we can get that higher yield in a tax free environment if we don’t have access to that. And the spread works given our clients tax brackets, and we use communities, but, yeah, most of our bonds are high quality, laddered bonds, and then we are probably about 10% of our bond portfolios were getting involved in private credit. We’re very, very picky about private credit.
Joe Duran 11:47
Credit basically means bonds that are not public, and so they’re less liquid, but you get a high yield on them, that’s
Scott Schwartz 11:53
right? And if you’re you’ve got to be very careful and very thoughtful about who you work with in the private credit space, because there’s a lot of, typically,
Joe Duran 12:00
you don’t buy these directly, right? You have a professional manager who’s coming in size. That’s right, negotiating secured position senior in the in the debt stack. In other
Scott Schwartz 12:11
words, yeah, that’s right, and that’s a way for clients who don’t need the liquidity. So if we’re talking about just looking for yield to enhance that, that income for our clients, particularly our retired clients. It gives us an opportunity to maybe pick up a 9% yield where the 10 year shield four and a half. So we’ll mix a little bit of private credit in there with that as well. Great.
Joe Duran 12:29
Well, the second story, obviously, is all about the mag seven. We get a lot of questions about them, and they’ve had a heck of a week led predominantly with Nvidia. Obviously, they had their big I can’t remember exactly how many 1000s and 1000s of chips that they’re selling to Saudi Arabia. I believe so. Alexis, I think Tesla’s still down quite a lot from his peak. I think we hit around $600 post election, still around three, something 330 or something like that. But nice recoveries in Amazon and alphabet up eight and 11% respectively. How do you feel about the max seven? Is that? Is that trade still a thing? Do you think, or do you think we need to reimagine the max seven, because there seems to be quite a dispersion now amongst the performance of these?
Speaker 1 13:14
Yeah, absolutely. So we did see, you know, the mag, seven, ETF cross above the 200 day moving average, which is, you know, if you look at technicals, it’s a very bullish positive sign that they’re moving back in that direction. And obviously some of the trade talks have removed overhangs, and, you know, risk is back on in the markets, and these stocks typically do well in those sorts of environments. But I would also, you know, remind everyone, and we’re reminding ourselves that, you know, we enter this year and this group was extremely overvalued, you know, very expensive from a historical perspective, in every which way that you looked at it. And I think the main question on whether or not, you know, forward growth can actually justify and support the valuations on a go forward basis, really still remains the question. So while these companies are important and they’re not going anywhere, and fundamentally, you know, everything is still intact, I think the valuation still remains the main question, especially if we do see some sort of slowdown later in the year when it when it comes to earnings and earnings revisions,
Joe Duran 14:22
a lot of it’s about visibility, right? Like, when you look at a company like Microsoft that seems to be the grown up in the room, you know that it’s fairly predictable. It’s not going anywhere. And maybe Tesla’s the petulant more noisy, because a lot of it is on the hope of what happens with with robots, and what happens with self driving, all of which it’s really gonna have to offset what’s happening with their actual earnings, which are the cars that are not doing as well as they have been for a love quite a while. So I’ll get into the politics of it, but they have different risk profiles, right? Yeah,
Speaker 1 14:58
exactly. And I think you know. Now that they’re back up 30% everyone is wondering, Oh, should I be buying now? But I think the opportunities to buy are, you know, when, when and where in a video was trading a month ago, rather than chasing it when it’s already, you know, had a significant
Joe Duran 15:15
move. Scott, I am sure you get this call all the time. Hey, I need to get back in now because it’s gone up, or somebody calls you who you’ve never worked with before. It’s like, I gotta own the mag seven. How do you think about, like, chasing obviously, this market’s always, you’re always in a battle between the fear of missing out and the fear of losing money. We’re right now in the fear of missing out phase, it feels to me. So how do you regulate that on people who are like, Okay, I gotta get back in. I missed the last one, and I gotta be in the max seven. Well,
Scott Schwartz 15:46
thankfully, we don’t have those conversations Joe in our office, because we’ve got a plan and we’re pretty disciplined. So to give you an idea, you know what we’ve done here? We’ve always had our position. We’ve also diversified around those positions, right? So we’ve liked value, non US and healthcare. So when the market, the broader S and P was down, I don’t know, seven, eight, 10% earlier and not too long ago, actually, just weeks ago. You know, our portfolios were flattish because those other assets, you know, were very good counter you know, counterbalances. We did rebalance portfolios once or twice in the middle of all that. So when the market was down, we added equities so we did get some of that exposure. Let me just
Joe Duran 16:27
double click on that for a second sure. Probably the most powerful thing if you have a financial plan, is to not make any bold moves and just simply rebalance to your target allocation, right? Like if your stocks go down a lot, and your bonds stay stable, you now have more in bonds than you originally wanted. So it’s simply rebalancing. You’ll be rebalancing almost always into down markets, putting more stocks and selling out of stocks and buying more bonds when they’ve had a big recovery. So the act of just being disciplined about staying close to your target allocation actually gets you to do the right thing, which is sell low, buy low and sell high, rather than the reverse, which is what we do emotionally.
Scott Schwartz 17:13
That’s right, and that’s what we’ve done. We’ve had two rebalancing trades, you know, in you know, these are not market
Joe Duran 17:20
calls this is you saying, Hey, we’ve got to reallocate because stocks went down. 20%
Scott Schwartz 17:24
were down. You’re, you were supposed to be 60% equities, and now you’re 58 or 57 and a half. We add that two and a half percent back, we get some exposure to the max seven, of course, because we’re a big part of the market, but we, but we also got exposure to our non US equities, you know, to our value stocks, and we’ve had a nice little recovery, and that’s, you know, the money we put in at that level has given us a little bit of lift. We recently took a little bit off. As we got back to these highs, I have the feeling we’re going to get a chance to do another rebalance here, probably sometime between now and the middle of the summer. And if it happens, we will, you know, we always do it as tax efficient, of course, as we can. But yeah, look, we have a plan. We work the plan. We’re not, you know, our clients were very, very calm to this whole process. Most we’d have conversation with clients, quite frankly, in the last few weeks where, you know, we’d be talking about the portfolios being flat or down 1% or up 1% I had people say to me, because they weren’t really looking at their particular portfolios carefully, just watching the news and ask, well, how is that? I was actually on with an older client whose daughter sits in on the calls, and she said, You know, when I said, yeah, the accounts up 1% of the year, and she’s like, well, how’s your account up 1% for the year? You know, my accounts are down like five and then again, explaining, Well, number one, we’ve been doing this for a while. We’ve got a plan. And you know, if you weren’t in growth stocks and you had fixed income and you had value stocks and you had some non US equities and some gold, like we do in our portfolios, we’ve actually done better. So we want to just work the plan. The noiser it gets, the more we want to work our plan.
Joe Duran 18:49
And I, like Alexis, the light the market doesn’t just go green, red, you know, it’s often in the middle yellow zone where you’re not sure what to do. I would just one thing, and then we’ll leave the max seven, people seem to forget that if you have the S p5 100, you have a big allocation to the max seven, right? Yeah, so if you then double down and buy more mag seven, you’re really overweight, and I think most people would argue the mag seven is already overly representative of the s p5 100. Most of the performance last year was, in fact, from the mag seven and not from the rest of the market.
Speaker 2 19:24
That’s exactly right. Exactly right. We have seen now
Joe Duran 19:28
from bitcoins behavior hitting 103,000 for the third time. It’s a broken 100,000 and a lot of people saying that’s the last time we’ll get in under 100,000 interestingly enough, it was meant to be a diversification, diversification trade like gold, it didn’t turn out to be that way. It went down to 85,000 83,000 maybe even lower. It’s at one point for a day or two, and now we’ve recovered basically in line with the market. So how are you feeling about crypto as an asset? And then secondly, how do you think about it in a portfolio? Construction? Context, because it doesn’t appear to be like gold, which was hitting new highs when the market was, you know, down 20% so how should you think about as an asset class, as a standalone first and then second, as part of a general portfolio?
Speaker 1 20:18
Yeah, no, that’s a great point, and I agree with you, where typically Bitcoin has been seen as this risk on asset and tightly correlated to the NASDAQ and tech stocks. And I think that is still true for the most part, but there was some interesting days and interesting points of time where most indices were down below their 200 day moving averages, which, again, is a technical signal, but Bitcoin actually stayed above theirs. So I think there’s this ongoing discussion of whether or not Bitcoin can actually decouple from the NASDAQ and being a risk on asset. I don’t think we’re there yet, and I don’t think we’ve seen enough proof that it is really a non correlated asset, but there has been moments in time that are, I think, you know, making that argument stronger. And from a, you know, portfolio construction perspective, you know, we have clients that own Bitcoin, but I would say there are more satellite positions where, you know, they understand the risk where there’s not really a way to value it today, the fundamentals are still a little unclear. It’s not like a stock where you have earnings and you have a multiple and there’s fundamentals to actually come up with evaluation. It’s more of a supply and demand dynamic. Wouldn’t necessarily say it’s, you know, Pure Storage of value like gold is, but it does have, you know, some of those aspects. And if we do see a further, you know, decoupling from this risk on trade, it might make that, you know, argument stronger. Well, it’s
Joe Duran 21:52
a good it’s look. The reality is, gold has very little intrinsic value, but there is a cost of pulling it out, and it’s been around for 2000 years, 3000 years, as a storage of value, like for 1000s of years, longer than we’ve had money. Gold has been the thing that people have used as a as a safe haven, as a thing to have Bitcoin obviously not as tangible, and it certainly doesn’t have the history. Who knows? As we know, Coinbase is now going to be added to the s, p5, 100. And obviously, the more legitimized it becomes, the more of a real asset it becomes. Scott, I know a lot of the folks here very big on gold and silver and Bitcoin as well. And do you see it the same way? It’s sort of a for now, a tangential asset, not a core asset for people,
Scott Schwartz 22:43
yeah, look, I mean, Bitcoin certainly has come a long way the last couple of years, right? I mean, just the idea of Coinbase being an S and p5 100 stock, you’ve got ETFs out there now, you know, with large firms, which add more, you know, sort of stability to it as an asset class, certainly more credibility. Look, we’ve got clients that are very, very bullish on Bitcoin. I can’t argue, you know, it’s very, very hard. It’s just an interesting asset class, right? I own a little bit myself. I think if you’ve got a long term time horizon and you can stomach the volatility, yeah, own a little Bitcoin. You know, you can buy an ETF. It’s easy to get in and out of we’re not working. Many people trade it. But you know, I think five years from now, it’ll probably be worth more than it is now. It’s very hard, as Alexis said, though, to really try to handicap that, because what’s your metric?
Joe Duran 23:34
It’s kind of binary outcome, right? Like, if it becomes a legitimate currency that everyone uses the guess what, it’ll be worth a lot more. And if it kind of is doing the same thing. It could be worth half as much, because that’s right, it’s just whatever anyone’s willing to pay for it.
Scott Schwartz 23:46
I think it’s a better, I think a safer by now than it was two years ago. Yes,
Joe Duran 23:49
for sure. Well, let’s go to our big topic for the day. And obviously it’s all about the China tariffs. We have a 90 day hold, and the markets have been very excited about that. And so let’s just talk. I’ve got a question here from Adrian in Los Angeles, and he’s trying to understand what the deal with China, although there is no deal today, there’s an agreement to try to get a deal in 90 days, and what it means for the market over the next three months. So you know, I guess for the rest of the summer here, and thinking about how he should try to invest. Obviously, he should have already been invested. But if you’re sitting today and you’re invested or not invested, how should you think about the next 90 days? We obviously have already had all, not all, but a big part of the decline recovered, about two thirds of it. So this is usually when it starts to run a little bit out of gas. But how do you think about the next 90 days? Alexis, why don’t you take that one? Yeah,
Speaker 1 24:48
absolutely so in the short term, you know, we’re all experiencing it, the exuberance, as I mentioned earlier, with some positive news, and it seems like we’re heading in the right direction with China. China. But to your point, you know, we haven’t made a deal yet. So I think what happens in the next 90 days will really determine the sustainability of what we’re seeing, you know, more recently in the markets, and the massive reversal that we’ve seen, we’re going to need to see a more substantial and real, you know, deal in agreement to be made for this, I think, to be more durable and more progress made, you know, in general. But I think we are somewhat wary that everything is over and that we’re out of the clear, you know, or in the clear, I should say. And think that there probably is some more volatility and downside to come. As fast as we can move up, we can move down just as quickly with a press release or a headline, and we would be using those opportunities, as Scott mentioned before, to rebalance, but not necessarily wanting to chase at these levels.
Joe Duran 25:56
And Scott, we’ve been in the deal business long enough and for three, four decades doing this investing to know the perfect deal is one where everyone is sullen, but not mutinous. People are getting what they want, but not all that they want. That’s usually when you hit, get to the right place. But as we know, we have a president and a premier of China who do not want to look bad in any transaction that occurs, and that does feel like it’s brought for some standing away, getting away from the table, and some mudslinging. I hope it doesn’t happen. But how do you think this is going to play out, and what does it mean for investors in the markets? Do we hold steady with volatility and where we are now 90 days from now? Or how do you think this plays out, obviously, for now, with the tariffs, aren’t going to go to the I don’t even know where they’ve settled out, actually, but where do you think we are over the course of the next three months? Look,
Scott Schwartz 26:52
I mean, three months is not a time frame to be an investor, right? You could speculate. I mean, I think there are people out there, if you think that, you know, like some of my clients that Trump is playing 3d chess and everybody else is playing checkers. Then, you know, maybe you speculate. We wouldn’t recommend that. If you have people out there who think that he’s, you know, way over his skis, and, you know, his plan doesn’t make any sense, then you’d be very negative on the markets. You know, the truth is probably somewhere in the middle, right? Terrorists are not generally a good thing. So we’re not really sure where this thing’s going to wind up. Look, if I’ve got a five year time horizon, I want to be in equities. We like we like US equities. We want to be diversified. We think that value. Stocks are probably a better value, non US equities, as we talked before. But if someone’s got, you know, a need for money in the next 90 days, six months, 12 months, even 24 months, I wouldn’t have that money in the market anyway, as we’ve kind of gotten back to level here, if I’ve got extra cash that, I think is long term money, I want to put in my, you know, it to work, and I want to get a real good deal there. I’d probably wait and see, maybe dollar cost average here, pick some spots, because I do think there’s going to be an opportunity to get into this market at a lower level. But this deal is not over yet. I don’t think anybody even knows what’s on the table and the fact that we’ve got another 70 days or whatever we have to work through it. And
Joe Duran 28:07
next question is from Mark in Long Island. He’s 55 and he’s still in his prime earning years, but is unsure how to manage his portfolio. With some saying that Dow could go to 6600 by year end, while some awarding a recession. Scott, you kind of answered this question. He’s invested. He’s balanced. Should he be doing anything other than not worrying about the next 90 days? Is there anything you would recommend? And one of the things obviously, make sure that your target allocation is right. And obviously, if the markets are going to go down, that you don’t, you don’t make you don’t have so much risk that you’re afraid and lighten up and sell at the worst possible time. But any any tips for Mark does doesn’t matter where the market goes. In your mind,
Scott Schwartz 28:52
you want them. If Mark’s got a five or eight year time horizon, he ought to be rooting for the market to go down. If he’s still earning money and saving money. And he’s going to want, he’s going to want to use that money in five or eight or 10 years. You know, the best thing that could happen for Mark is for there to be another hiccup here, and him to have some cash that he can invest and take advantage of those levels. What you don’t want to do is you don’t want to get out of the market because you’re scared. You want to invest based on time horizon. You want to always make sure you’ve got enough liquidity to cover your, you know your expenses, and to manage your business and do whatever else you’ve got going on your life. But again, we’re going to have a lot of other topics. We’re going to talk about Joe in the next 235, years, as we do these podcasts. And
Joe Duran 29:31
I think very important here, if Mark is 55 and let’s say he’s working to 65 he’s got 10 years where there’s going to be many more dramas that come in, and he should do every one of those drivers as an opportunity to increase his investments by taking his savings. Hopefully he’s his kids are in college, or if he has kids and he’s got the ability to net save and can invest in the markets, it’s a very different thing once you’ve retired, right? Like you have to. Be much more thoughtful about market volatility once you’re using your savings to live on. Yeah,
Scott Schwartz 30:06
but I think once you get to that point again, what you do is you create a portfolio where that’s where you use ladder bonds, and that’s where you have income coming from dividends, where you know where the income that you need is coming from. Your equity portfolio, is that part of your portfolio, maybe that half of your portfolio that you’re not going to need for five or 10 years. So again, in our practice, for our retired clients, we know where our income is coming from, literally for the next five to seven years. So again, we’re never worried about where’s the market going to be at the end of the year. We’re not going to need we hope that those equities could potentially be lower at the end of the year. I don’t need that money for seven years. That’ll give me an opportunity to take a little bit of my fixed income, roll it over into cheaper equities. So as time goes by and the markets recover and advance, we’ll have more, you know, we’ll have more money there for our clients second half of their retirement, if you will. So people should be paying much more attention to their timeframe and their liquidity need than they should be tariff deals, you know, whatever else is going on, like Joe said, we’re going to have lots of drama to talk about here in the next five to 10 years, between now and the time that Mark retires. So I wouldn’t, I wouldn’t, you know, spend too much time and energy focused on that. Honestly, work a plan. Have a plan, your plan.
Joe Duran 31:17
And I think this ties into the last question. I know you work with a lot of CEOs and entrepreneurs. Tim in West Palm Beach, Florida, is a small business owner with goods manufactured in China. He’s stuck because he’s running out of inventory, but worried about ordering more and then having them come and have the tariff set right when he receives everything. And so he wants to know how he should think about his business and how much cash he should set aside. I’ll take this one just to start off. First of all, as an entrepreneur my whole life, I just suggest a couple things, other than my fellow Goldman, which was very different than running your own business. But I’d say a couple of things. Number one, you cannot use investment money as something to run your business, you have to use that as cash. And if you are an entrepreneur, and your business is not large enough to be self sustaining in all environments and you expect your portfolio to support you, you have to think about your business as another person with needs. And if those needs are really large in a tough time, I would strongly recommend that you have a very significant cash reserve for that eventuality, because the worst thing that can happen is you have investments in the market. Something bad happens with tariffs. At the same time that your portfolio is going down, your business now needs the cash, so you need to really think about diversification. If you’re a business operator in a different way than somebody that’s just simply working and retiring because your risks, especially in this case, because you know the markets, if things happen bad for your business because of the tariffs with China, they’re almost certainly going to be reflected in the stock market. So any additional thoughts on that? Scott,
Scott Schwartz 33:06
no, I think that’s exactly the way you should think about it. So
Joe Duran 33:09
make sure you think about your business as a standalone and say, How bad could it get? How much do I need to have and either have a credit line that gives you that ability to get to the other side or have cash available, because there is nothing worse than having a business that cannot make it through a lull or a temporary spike down. And that is where most the pain will be felt, and that’s we’ve seen it in the Russell 2000 the smallest stocks have really not done. They seem to find their footing right after the president was elected. And any thoughts Alexis, just to wrap up here on the week on the Russell, 2000 and smaller companies, because I’ve been quite disappointed what we’ve seen in them and on the way down and on the way back up. So I think they probably have the most risk, just like Tim in West Palm Beach. Any thoughts on small caps? Yeah,
Speaker 1 34:03
I think that’s a great question and point. And as we were talking through the question and the response, you know, I think that whole sort of conversation is what is really important, and that I think the market might be broadly ignoring where there are small businesses, and we’re seeing it in the Russell 2000 Russell 3000 that these businesses are struggling. And even though there’s some positive news around China trade developments and this pause, and ultimately, maybe things wind up better than feared, but there’s still disruption happening every single day, and businesses are not able to make decisions, and that is going to find its way to the surface where there will ultimately probably be a slowdown and there will be impacts. And that’s why, you know q2 and q3 earnings, I think, will tell us a lot more of the story of what’s been really going on under the surface this year. That’s
Joe Duran 34:58
super helpful. And as we just saw, Walmart is expecting as much as double digit price increases regardless in the coming months, so we’ll see how that impacts the economy in general. So thank you very much, guys. Let’s talk a little bit about what’s coming up next week, I, for one, will be watching the NBA Playoffs. All the other Lakers lost. Unfortunately, I just came in from New York today. I’m super excited to see what happens with the next the next and Celtics and really great basketball. But that’s not what we’re here to talk about. We’re here to look at what’s happening next week. I think, obviously the tariffs. News on the tariffs matter. What do you expect in any big news you expect for next week? I think we’re, we’re through most of the earnings. Alexis, any big earnings for next week?
Speaker 1 35:42
Yeah, no. I mean, we’re, you know, so far, treading along through q1 earnings, and there’s some other companies to report, but the mag seven are pretty much done. So I think all eyes will be on tariffs, really. And if there’s any other developments, mainly with, you know, the China negotiation. So I think that is top of mind,
Joe Duran 36:02
and we should remember again, a lot of the words said by the administration could be negotiating tactics, but they could be real. So I would not put too much stock. And it does seem like people have now accounted for a certain amount of words. That might not mean a lot. Scott, what are you looking for this coming week?
Scott Schwartz 36:19
I don’t disagree at all with what you said. I think a lot of the earnings stuff is out. I think there’s been a lot of overreaction, potentially, particularly in the pharma space, with some of the remarks the President’s made about pharmacy costs, drug costs. I think what we’re finding as people are digging into that more that a lot of what they’re talking about doing can’t be done. It can’t be done from a legal perspective, right? It can’t be done from a legislative perspective. So I think as we move along here, what we’re going to find is there’s not going to be quite as much abrupt change as people think. There’s been a pretty negative reaction here, particularly in the healthcare space. I was speaking to our healthcare manager earlier today. Thinks it’s a great opportunity. Quite frankly, there are some companies out there that are going to have some challenges, but there are a lot of really good companies out there. They’re going to benefit, and they’re all kind of getting beat down here. You know, the United Healthcare story, I think, has drug the sector down a bit as well. So I think there’s really good potential there. I think you’re going to be very selective in that space. But again, I think we tend to react to the headlines, and then after time goes by, what we find is that, you know, the moves that they’re talking about are never quite as significant as people were afraid. You
Joe Duran 37:27
look at the aging of the population, the fact that we’re not going to stop using drugs, it’s interesting area to stare at. And so thank you very much, folks. If you are interested in having your portfolio reviewed by amazing people like Alex or Scott or some of the other folks on the team, please come to wealthion.com forward, slash, free. You’re welcome to share your information. We’ll, of course, send it back to you confidentially. And if you have any questions, thoughts, topics you’d like us to cover, please let us know. And I’m excited to let you know that Terry will be here next week and do a much better job than me in helping to co host this, and we’ll see you all soon. Thank you very much. Alexis Scott, really appreciate you, and thank you for it, for watching. Have a great week. Thanks,
Scott Schwartz 38:12
Joe. Appreciate it. Thanks. You.
