Inflation Fears: Shades of 1974?

Andrew Brill 0:00
It’s been 50 years since today’s $18 Big Mac was 65 cents. And there are a lot of similarities between today’s economy and the one from 1974. Thanks for joining us here on Wealthion. I’m your host, Andrew Brill, and we’ll dive into that right now.

Our mission here at Wealthion is to help all of us keep and grow our money. Through interviews with our experts, we’ll break down economic trends, markets and investments. But Wealthion is not just a channel, it’s a conversation with our community. So please keep the feedback coming. If there’s something you’d like us to talk about, or someone like you’d like to hear from, let us know. And if you could like and subscribe to the channel, we would really appreciate it. I’d like to introduce you to and welcome Brett Rentmeester from Windrock Wealth Advisors, Wealthion has partnered with Brett and windrock. So when you asked to speak to a registered investment advisor, it’s Brett or one of his partners that will be reaching out. Brett, thanks so much for joining us.

Brett Rentmeester 1:01
Thanks for having me, Andrew.

Andrew Brill 1:03
So Brett, you’ve written a newsletter echoes of 1974. And it’s fascinating. Everyone should give it a read. You can find it at Windrockwealth.com. So you’re saying history repeats itself?

Brett Rentmeester 1:15
Yeah, well, at least rhymes as they say. Right?

Andrew Brill 1:19
Yeah. So you wrote this article about 1974. And after reading it, I realized that we’re in a similar situation today than we were back then what made you look back 50 years, and say, You know what? I’m gonna write an article about 1974. This isn’t George Orwell type of thing, but it’s 1974 versus today.

Brett Rentmeester 1:40
That’s right. Well, truth be told, I turned 50 This year, and was born in 1974. So like so many of us do. We sometimes pause and look at the world today versus the world we grew up in and are born into, especially those of us with children, and have to explain to them in our day, we had three television channels, and you know, all the differences. And yet as much as the world was different back then, it dawned on me that there’s a fair amount of similarities and things to pay attention to that are maybe cyclical, maybe not exactly repeating but cyclical, that I think are worth thinking about, and what ways hasn’t the world changed? Or what are some of the things that we should be thinking about? That might have been a lesson we learned 50 years ago, and it’s kind of outside of the collective consciousness at the moment.

Andrew Brill 2:28
So we’re living in today’s world. So take me back to 1974. And what the economy was like and what inflation was like and interest rates back then, because everything was I know, inflation was high interest rates were high, and we were trying to get a handle on it all.

Brett Rentmeester 2:44
That’s right in, you know, the 70s were a complicated decade. And I think most scholars look back and want to just kind of write it off, because it was thought of as a high inflation, low growth, so called stagflation statement economy, with inflation period. But the reality is, like we’re discussing today, things are cyclical and not a linear, you know, pattern. So it’s not as if the 70s were just about inflation. You know, the reality is the 70 started with inflation, as people got, you know, concerned about the spending, social spending, plus the Vietnam War excetera, in by 1974, inflation was really rearing its head, much like we experienced last year. And that was a concern. But right around 1973 1974, a pretty damaging recession took hold, and pulled everything down, inflation and interest rates came back down, but not as low as they had been. So kind of a higher low. And I think probably at the time, there was a general thinking of like, we got through that without inflation soaring. But what it set the stage of with with the same behavior, going forward was a second wave all these problems that we all think of when we think of the 70s, we think of, you know, the the inflation rate that got to near 14%, and short term interest rates, that peak debt, depending how you measure it about 16 and a half percent, all of that happened at the end of the 70s into the 80s. And so a question on the table is, Are there similarities to 2024 relative to 1974? And what does lie ahead?

Andrew Brill 4:23
So I would assume the Fed is trying to avoid the 74 to 80 trajectory that you’re talking about. And look, just Tuesday, the CPI came out and inflation is still over 3%. If you take out the core stuff, food and energy, we’re still over 4% right around 4%. So it looks like the Fed might even push Oh, eight we know they’re pushing off a march cut. I mean, I think that’s baked in the cake there. Probably not in May, but we’ll have the obviously the numbers will have to bear that out. But the think the Fed is trying to look back at that time, we’re not really looked back. But think about look, you know, we don’t want to get into a position where we start to drop rates and everything goes haywire again.

Brett Rentmeester 5:13
Yeah, I think they certainly know some of the lessons from it. I think the fundamental difference between the 70s and today is that we have so much debt. And, you know, it’s not just the 34 trillion, you know, acknowledged official debt, it’s all the unfunded liabilities that, you know, some people will come up to a present value, what you need today of a couple 100 trillion, it’s just a staggering amounts of debt. So they almost they can’t get, you know, they can’t get things in the predicament where rates run away from them. Or they wouldn’t like to see that because that that kind of blows up the system at some point. But they’re a little bit stuck here. Because inflation is here in whether whether or not they raise rates, next meeting, etc, is less important than just looking at the trajectory of where not only the US, but we’re Europe, Japan, all the developed countries, seemingly to me have too much debt. And not only that, but they’re spending above and beyond that there’s no change in behavior. There’s no budget in the US right now. So, you know, it seems obvious to me that we’re going to run into trouble at some point with that kind of forward looking, thinking.

Andrew Brill 6:21
Explain to us how that works. $34 trillion? It’s gone up, I guess, in the last month, another trillion dollars, we have to finance this debt somehow. And with interest rates to where they are you explained in the article that someone’s going to buy that dead, but it’s going to cost our country a lot of money to finance that debt.

Brett Rentmeester 6:40
That’s absolutely right, Andrew. And, you know, the shocking thing is we entered 2024 is there’s been little talk about that. But the numbers we’ve seen have estimate somewhere in the neighborhood of a $2 trillion deficit, that means you’ve got to issue bonds to cover the shortfall of 2 trillion, and then we’ve got upwards of another 8 trillion of existing debt that’s going to mature and have to be refinanced. So together, that’s $10 trillion. It’s roughly a third of our official debt that has to come to market. And we’ve got that at a time when rates are already much higher than they have been. And at a time where a number of countries are starting to move away from the US dollar, or at least look at alternatives. So as I’ve always said, you’re gonna find a buyer, Argentina finds buyers for its bonds, but at what price, and that’s the unknown, that should allow SQL keep rates higher than they normally be in this kind of predicament.

Andrew Brill 7:32
So volatility is is of a major concern here, where, you know, we see the we see it coming to inflation coming down, but we don’t want it to spike. But there’s all these factors that are weighing we see, you know, economic data come out the market goes down six 700 points, you know, we may be fickle, and maybe tomorrow, that goes back up a couple 100 points. But there’s that there’s that, you know, that rise and fall, how does an investor like I don’t have a strong stomach? How does an investor, you know, our viewers protect themselves against, you know, all these waves and peaks and valleys?

Brett Rentmeester 8:16
Yeah, it’s a great question, I think, listen to the conventional view has been that a stock and bond balanced portfolio get you through the ups and downs. And that’s worked very well, since the 70s. But since the 70s, we’ve been in one kind of period, and that is a period where interest rates have been coming down. And that force lifts all asset value stocks and bonds. Now we’re at a little more of an inflection point. And I think going forward, the more conventional stock and bond mix is going to be challenged where they both run into trouble stocks and bonds, oftentimes is in a rising interest rate environment or one with high inflation. What tends to do well, in high inflation, if you use the 70s as a lesson, hard assets, tangible things that can’t be printed out of thin air, tend to go up in value, if governments are irresponsibly, you know, printing money and being careless. And so just speaking to what happened in the 70s, we know oil and gas were up tremendously. We know real estate was up, we know farmland was up, pretty much take any hard asset with a somewhat limited supply. And those are the things that did very well. So I think, for today’s investor at the general guidance is you kind of need one foot in the old world, which is stocks, bonds, conventional things, but you need a foot in the world that says, you know, we might be at this inflection point. And we’ve got to think a little bit different about the risks ahead of us than than maybe the last 2030, even 40 years.

Andrew Brill 9:40
I was reading that you had talked about fuel prices were up high food prices in our pie. Now we’re at the point again, where food prices are high. Housing prices are high, but energy costs are low. Is this an anomaly?

Brett Rentmeester 9:56
Yeah, I mean, a little bit, a little bit. Some These markets are hard to explain. I mean, we, we have been not in energy markets until COVID. And when COVID hit, you might remember the day where the print of oil went negative, we became buyers of energy. So that didn’t make any sense to us either. So the world is going through some gyrations, but But I think, think energy having some energy exposure is a good hedge energy has always done well during periods of geopolitical conflict and turmoil. And we’ve got another war of unknown consequences brewing in the Middle East. So it’s harder to map out and some asset prices, but I think, yeah, something that ought to be considered at a high level. Something that

Andrew Brill 10:44
I really enjoyed from the article is looking at McDonald’s, when you talk about food prices are going up. And you know, the price of a Big Mac, but there was just an article the other day that there’s there’s places in this country where the Big Mac is $18. Now, that, to me is not fast food, that is a lot of money for a burger, especially McDonald’s. But back in the 70s, the Big Mac was 65 cents a large fries was 46 cents. So you add that up $1.10 and throw in a drink, you’re talking about a buck and a quarter for a meal, that just the burger now is going to cost you 18 bucks.

Brett Rentmeester 11:20
That’s right, and we all see it, we all see it right? You go to a nice restaurant, and the hamburger is now what the steak used to be. And so, again, I think that’s why investors are nervous, because no matter how much money you have, or how prudent you’ve been, the money’s just not going as far. And when we talk about inflation, that’s a rate of change. It’s not like prices have come down, the rate of growth may slow a bit from where it was, doesn’t mean prices are coming down, at least in the things you need. So I think that’s that’s likely to be a more permanent fixture of the kind of backdrop we have to deal with in the next decade.

Andrew Brill 11:56
Yeah, that was something else I was I was reading is that services are going up, they continue to rise while cost of certain goods are actually coming down. Yeah,

Brett Rentmeester 12:07
I mean, I like the saying everything you need is going up in price and everything, you know, in the discretionary things maybe you don’t care much about they’re going down. I mean, some technology stuff will keep coming down. But But you’re right. I mean, just speaking as a as a business owner, whether you’re looking at your annual insurance growth rate, or, you know, all these services accounting legal, I mean, it’s just on a continuing upward trends. So, again, I think I think that’s more of the reality of the backdrop we’re gonna face.

Andrew Brill 12:36
And I’m certainly no expert. Do you see the Fed trying to get obviously they’re trying to keep things in not have and have inflation come down? Do you see some sort of cuts coming towards the end of the year?

Brett Rentmeester 12:51
Cuts as far as interest rates? Yeah. Well, I mean, to be perfectly honest, I think what we’ve created is kind of a bubble making machine where times get tough, we print a bunch of money out of thin air, we jam it into the system, it has an effect that lifts the tide. And then things start weaning. And the Fed stays there kind of kind of where we’re at today, not wanting to do too much. But inevitably, that breaks and they panic, and they come in, and they do it again. So I think the next time we’re truly going to see, you know, at least a big printing of money and a big push to perhaps bring the cost of capital down is in the face of a crisis, which, you know, whether we’re whether once upon us now, or something’s out there on the horizon, in a year or two, I think. Yeah, I think that is the playbook. And that’s what we should expect. But I don’t think that happens until such time that there’s a big enough crisis that forces their hand, or an exogenous event where they can say, well, it had nothing to do with our policies. It was this thing over here that we couldn’t have foreseen to take the blame off of policy.

Andrew Brill 14:00
Your next lesson, Brett in the article is about extreme stock valuations. And it’s interesting that, you know, we used to have the nifty 50, back in the 70s. And now we have a very much a smaller amount of stocks that are really holding up the s&p, The Magnificent Seven, and talk to us about, you know, what people were thinking about the nifty 50 I know you did a ton of research about this stuff. What were people thinking about then? Because it was a more diverse group of stocks, I mean, 50 stocks, not all in the same sector. The seven stocks we’re talking about now are all in the tech sector.

Brett Rentmeester 14:39
That’s right. That’s right. Yeah, I would say you know, anytime the markets being dominated by a smaller and smaller group of companies, the more dangerous it is, in some respects. So today’s an extreme seven companies driving everything but back then even 57 companies it’s about 1% plus or minus of the s&p 500 are pretty much It’s dictating the pace and plenty of people have done analysis that if you take the market cap weighting out and you make an equal weighted index, you really didn’t have much gain at all in the s&p. And you look at that relative to international stocks, emerging market stocks, they haven’t benefited from the game. So it’s kind of been the only game in town. But like the 70s, you know, I think the lesson is, or the tech bubble, that no matter what the promise of some of these companies and in the 70s, it was great growth names, like McDonald’s, like Avon, like some of the pharmaceutical companies, you know, those were the growth engines of the time, and there was a general thinking that it was a buy and hold decision, just buy this basket, and don’t worry about it. And of course, when the last guy did that is when they corrected 50 to 80%. So not suggesting that’s imminent for us. But I think anytime a markets being driven by fewer and fewer stocks, especially in the world, we’re in where a lot of the investors are not people like you and I, Andrew, these are algorithmic traders chasing things with no loyalty to the long term performance. There’ll be in and out, you know, before we react, that’s a more dangerous factor.

Andrew Brill 16:09
Yeah so back in in 1974, if somebody, say at the age of 30, were to have money in the market, you probably would have said to them, you know, don’t worry about it, it’s cyclical, it’s going to come back may take 1020 years, you have that time, but we have people that don’t have that time. Now, they’re of retirement age or thinking about retirement. What are those people do? Because there’s got to be correction coming at some point, I would assume I’m no economist that I’m no, you know, master at the market. But I have to assume that there’s a, you know, at some point, people are gonna say, AI. Okay, it ran its course, it’s still great. But these stocks are way overvalued. How do I protect myself from my retirement savings? Going off a cliff?

Brett Rentmeester 16:56
Yeah that’s right. And listen, even for young investors, I’ve actually never bought into the idea that just because you’re 25, or 30, you should just take risk, no matter what, I think there are a lot of markets, there aren’t clear, warning, you know, red lights flashing. But I think when you get to more extreme valuations, even aggressive investors ought to take heed. And you know, for people that don’t have time to recover from losses, you’re right, I think you have to really think about your equity exposure, not only not only the overall size of the allocation, but what underlying names you’ve got, and whether you’re taking profit along the way, or you’re letting us position just bigger and bigger. I think those are the type of investors that have to do a real risk analysis at this kind of juncture.

Andrew Brill 17:41
What are the risks of these weigh over valuations that, you know, I know that look, we went through with the.com bubble, and everybody’s like, Oh, my God, this is the greatest thing since sliced bread. But these valuations seem to be high. Look, you know, 10 years from now, we could be looking at this and say, yeah, those valuations were way too low. But right now, what are the risks of you know, these six or seven stocks, you know, being valued the way they are?

Brett Rentmeester 18:07
Yeah well, they’re big. I mean, we saw, we only have to go back a year. I mean, 2023, was a rebound year from 2020, to the NASDAQ pick last 35 or so percent. And then the videos of the world and the leaders that everybody’s in love with today lost half their value. So we’ve seen it real time. It’s just we’ve got such a short term orientation here, especially in the West, where you take that hit, and tomorrow, it’s forgotten about. So yeah, I think I mean, honestly, one of my biggest lessons, when I first started my career was the tech bubble. And I remember as an investor, buying EMC, which was data storage, and every projection into the future was data is going to keep growing. They’re the leader of storage, and it did keep growing, and they were the leader of storage, and they still fell 90% of the cover. So you know, valuations can get so far ahead of what a company can deliver that you can, these are great companies. And there’s no question. Some of this AI stuff will be extremely disruptive. But the question is, are we in a hype cycle first, where things go too far too fast? Correct. And then you want to be there to pick up, you know, pick up the bargains, we’re not

Andrew Brill 19:18
Gamestop comes to mind where the hype, the hype, the hype, and all of a sudden, that fell off a cliff, you know, I don’t think, you know, maybe we’re hyping AI and it’s so new that everybody’s like, Oh, I have to get in. And we’re going to see probably more IPOs even that they’re coming back into into play on companies that have AI that are thinking, You know what, we’re going to try and raise money to really grow our company.

Brett Rentmeester 19:45
That’s right. And listen, you’re in media. You remember the Internet revolution? I mean, it wasn’t like everything just did well. It was very disruptive, if you will, there were winners and losers. Some industries got totally gutted out by the internet. So I think with AI You’re going to see something similar that AI is going to replace a lot of the middleman, a lot of the things that don’t require, you know, a skill beyond a following, you know, steps from, I don’t know, you could say the legal profession is some risks CPAs and tax accounting, you know, go down the list, but it’s disruptive. So they will be keen in the economy to get to a better point where these tools are working, and people find other other roles or enhance roles in the same value chain. So it’s not as if we just jump from here to there, and everything’s great. And it’s solved all the problems of the world.

Andrew Brill 20:36
It’s I was, I heard something funny that said, AI isn’t going to replace people, it’s only going to replace the people who don’t know how to use it. So it’s, you know, we’re all going to, we’re all actually going to have to figure out how to use it sooner or later, because it’s going to become part of our like, our everything you do is connected to AI now. So it’s absolutely, the algorithms are just there. So, you know, I don’t want to get into any political discussion. But part of your article talks about political instability. Back in 1974, we had a president that resigned when a country that let’s just say they weren’t too happy with our country at that point, we’re in a similar spot now, are we?

Brett Rentmeester 21:23
I think we are, I think we are Andrew. And, you know, these things go in cycles. But in the West, our whole system is based on faith and confidence, you know, faith and confidence in what your elected officials, the financial institutions, the decision making. And I think there’s a lot of discontent and it’s not just on one side of the aisle or the other It’s is a general question of, we’re living well beyond our means we’re spending money seemingly in every direction. And it is a question of faith. And there are big thinkers like, author, I like Neil Howe, in the fourth turning that have a cyclical view of history that say at a fourth turning about every 100 years, and his timeline is about now, people start losing faith in the institutions that served prior generations well, and they just don’t work anymore. So whether you want to talk about Social Security really running out of money, or the FDIC really having that much relative to what claims could be, I mean, these old institutions that were put into place 50 to 100 years ago, have served us well. But we might be evolving beyond some of that. And I think loss of faith means maybe a tearing down of some of the old, and that will be painful, but a rebuilding to a better spot. Hopefully, that’s more in line with where we’re headed.

Andrew Brill 22:42
Talk to me about how this is an election year, how does that play into markets and how people invest if at all?

Brett Rentmeester 22:52
Yeah that’s a great question. Because there’s, there’s a common belief, and I think it’s statistically proven that, hey, the Feds kind of accommodative going into an election year. And markets are good. And I think the average is probably prove that out. However, there’s some huge exceptions to that. 2020, election year, and that was COVID. Right? Oh, eight, election year, great financial crisis before the election year during the tech bubble. So it’s kind of like someone’s saying to you, yeah, on average, things will be good. But if they’re not good, they tend to be really bad. I don’t know, I think this is a it’s a different kind of environment than we’ve seen. It’s more polarized. It’s more charged up. And I don’t know, I think there’s more caution warranted than kind of a normal cycle.

Andrew Brill 23:42
Yeah, you know, given the kind of I know, the economy is a, it’s a big political talking point. And, you know, I guess you can spin the economy however you want, when you’re a politician say, oh, you know, things are terrible under Biden. And then Biden’s gonna say, Well, you know, I inherited something terrible. And look what I did. So, you know, that’s definitely used as a as the economy. I guess you can spin it any way you want. If you’re a politician, yeah, you can.

Brett Rentmeester 24:11
And ultimately, all the data has gotten so much more complex, like GDP includes government spending. So if we hadn’t spent trillions of dollars with the numbers look good. I don’t know. You know, earnings were pretty weak last year outside of the big tech, so we’re earnings. Great. I don’t, you know, it is harder to decipher and work through that. So I think you’re right, you can tell a tale in either direction right now.

Andrew Brill 24:33
So, you know, we talk about politics, we you touched on global conflict, and that’s one of your lessons from 1974. In, you know, back in the early 70s. We were, you know, there was plenty conflict, the Vietnam war was going on. You know, there was a lot of, you know, geopolitical stuff happening. And we’re right back there again today. I mean, you talked about the Yom Kippur War in your article and The day after that, you know, 50 years later was the invasion of Israel by Hamas. So how does global conflict and geopolitical things affect the economies?

Brett Rentmeester 25:15
Yeah Well, listen, I think we’d be naive if we said war is good, right. And it will destroying lives and buildings and other things. But, you know, the markets kind of brushed past a lot of the prior conflicts. I think this time around, it’s a little different, I think. You know, a number of countries have debts that can’t be serviced as rates go up, and work as a convenient excuse to tear up all those obligations and reset the rules and say, again, it wasn’t us it was this. That’s why we had to change the program, not pay you back. excetera. So we’re watching carefully. I mean, certainly, we don’t have any crystal ball. But I think anytime you’ve got major powers all in a, you know, dangerous spot. It’s something to keep an eye on all the world wars, you know, they took time to develop, there were facts and patterns, when you look back before the big events that looking back in time, you could recognize this trigger event. So you know, we’re looking for things like that, but but it’s not good.

Andrew Brill 26:20
Yeah. And there’s a lot of countries around the world whose economies are in far worse shape than ours. As a matter of fact, our economy looks great compared to theirs. How does that affect a the US economy? And how does the world economy affect everything that goes on here and around the world?

Brett Rentmeester 26:38
Well, obviously, we’re all much more integrated now. So when China goes into a major slowdown, you have to ask the question of, is it because Mandy, they’re the manufacturing floor of the world? Is it because orders are down? Or is it something unique to China, or, you know, if we create another credit bubble in the US, like has happened with housing and other things in the past, and that collapses, that spills over to the rest of the world? So I mean, we’re interconnected. And yes, we’ve done better on paper. But we’ve also had the benefit of the printing press, the ability to kind of print money out of thin air without until recently, without outright inflation that was troublesome. So the real question is, are we going to get ourselves in a predicament where that’s not the case where we can’t just print money out of thin air to get ourselves out of the next trouble spot, especially with, you know, these BRICS countries and other people starting to pull back and rethink the idea that everything’s got to go through the dollar system.

Andrew Brill 27:34
Which brings us to our next lesson in the article is currency. And you make the point of currency kind of evolving for 100 years, and then kind of changing we saw with the euro, I guess, back in, right around 1999 2000, are we and now we’re cryptocurrency is becoming the buzzword, and we see Bitcoin jumping near 50,000. And, you know, are we at a point where the dollar could be changing?

Brett Rentmeester 28:03
Yeah, and I think you’re referring to, you know, we looked back and other people have done this work to see that, you know, the British currency was before us. And prior to that it was Spain and Portugal. And they all had about 100 year reign as being the reserve currency used around the world. And they didn’t go away after that. There’s still people still using those currencies, but they pulled back. So the question is, where are we in the lifecycle of the dollar? And it seems like we’re at a point where bigger events are starting to happen now. Is there an error appearance? No, because all of the other countries you mentioned the euro, the euro, the yen, the Chinese yuan, they all have major issues. They all are indebted. They’re printing too much money. So this is kind of a global issue right now on currencies. And it may be a different kind of path. I think, in the past, there might have been a new currency to jump to in the fiat currency world, I don’t think that’s going to be the case, I think it’s going to be more binary. One path might be, hey, they just can’t make obligations anymore. And they seem the centralized powers seem to want to take us to the central bank, digital currency cbdc world which is not cryptocurrencies, that’s a control programmable money kind of future that maybe they can do something different with. And free markets are starting to take us more towards maybe gold and silver. I heard Zimbabwe know if it’s true is looking at Gold backed currency. We have other countries that are openly endorsing Bitcoin from El Salvador, to other countries that have gotten friendlier towards it. So I think the free markets are saying, given the something that can’t be printed out of thin air, could be gold and silver, could be a Bitcoin could be other things, but they’re recognizing that the problem today is squarely on the side of governments just outspending any reasonable levels. So we’ll see.

Andrew Brill 29:50
Is this a good time to get out? You talked about gold and silver. I know gold price was down a little bit on Tuesday, but is this a good time to get into that sort of thing? Because As that could protect you a little bit from the volatility of the market, even though gold prices can be slightly volatile, but gold prices seem to always go up. Yeah, in I think gold and silver or patients trade, you know, they’re going to protect your purchasing power.

Brett Rentmeester 30:16
So, back to the McDonald’s example, you know, a silver coin today or a gold coin buys you about the same McDonald’s, US McDonald’s, McDonald’s stuff today versus 1970. Versus if McDonald’s was there in 1900. So it’s a purchasing power play. And it’s for people that are just getting concerned. So the old answer might have been, I’ll just have all my money in bonds, a little on the move to be more defensive. But now there’s a real concern not only about inflation, and what that does to bond purchasing power, but also to, I don’t know what government is going to pay me back. You know, I know some of the studies in the Great Depression, where people got paid back, ultimately, that there were periods where interest was frozen, and they got it many years later. So a lot of people were relying it on money today. I think in a world where the problem is too much debt and printed money, yes. physical gold and silver play a very fundamental role in just protecting wealth.

Andrew Brill 31:13
And how can investors balance their need for growth opportunities, obviously, you know, gold, silver might be one of them with, you know, stability and risk management?

Brett Rentmeester 31:23
Yeah, I think that’s, it’s thinking through an entire portfolio in again, I guess the comment I make is, a lot of advisors are still, but I’d say investing like it was 20 years ago, it’s the stock and bond mix with maybe an occasional hedge fund or something. And, you know, if they don’t like stocks, they’re gonna go from 75% to 70%, like small little moves, I think realistically, you’ve got to make bigger moves when the data suggests it. So you know, when interest rates went to 0%, we weren’t sitting there and tons of bonds. But now that short rates are at five and a half percent, we’ve moved more money to clipping that safe coupon as an example. So I think it’s about balancing out a portfolio, but going beyond stocks and bonds, and that can include hard assets, it can also include private investments that are more readily available, ranging from the right kind of private real estate, to the right type of private equity. I mean, personally, I’d rather be in the private markets playing the AI kind of themes than chasing something at a you know, 35 times sales multiple. So you know, it’s not that you can’t take any risk. We’re always in a world where you’ve got to take calculated risk. But I think there are times where there are warning signs, where even if you’re the most aggressive investor, you dial that back in, you put yourself in a position where things do fall, you can actually play offense. And that’s not investor psychology, investor psychology is to chase when everything’s running. Or as Warren Buffett said, you know, you want to be fearful when other people are greedy, or other people greedy right now, it seems like it seems like we’re closer to that than not.

Andrew Brill 32:59
So talk to me a little about Winrock, you’re our new registered investment advisors. Talk to me a little about your philosophy and how you can help our viewers.

Brett Rentmeester 33:09
Yeah, thank you. And we’re thrilled to have a partnership with wealthy I’m very excited about it. I think we bring a different flavor to the wealth management space, quite honestly. And there’s a lot of good advisors out there, don’t get me wrong, but a lot of them are set in that kind of conventional mindset and building portfolios with data that was optimized post World War Two. And I just think that this is a lot of where we’re headed. So I’d say the two unique attributes about us other than being inexperienced, dedicated team of utmost client service is that we’re willing to have more of a discerning macroeconomic point of view, but only at times where there’s really an anomaly. So in other words, we went into COVID, believe it or not very cautious, and we got very aggressive when COVID hit. And then we’ve been harvesting gains since and we’re cautious right now. So that’s not how every advisor works most kind of stick. And like I said, it’s not by mix. Now, maybe 5%, here or there, we’ll move. So I think a little more of a macro economic point of view and positioning based on that, and combining that with a more of an entrepreneurial mindset. And that doesn’t mean risk taking. In fact, I think entrepreneurs are very savvy, risk return kind of thinkers. So what does that mean? It means we were early cryptocurrency investors, we were early in, you know, a concept in real estate considered built to rent where you build in communities that are they look like little single family homes, but they’re rented out and they’re trying to meet the need for the fact that it’s very unaffordable in some of these key markets to buy your first time home. So a little more of an entrepreneurial mindset is what you tend to see with bigger investors, the so called family offices or billionaires, they like private deals, they like to do interesting niche things that are harder for advisors to do so we’re trying to to put a little more of a macroeconomic flavor on what we’re doing and combine it with some really interesting, bottom up private opportunities that aren’t as typical. So

Andrew Brill 35:10
So that’s what you get with Windrock. Brent, where can people find you on social media?

Brett Rentmeester 35:14
Well, that’s a great question. I mean, we were on Twitter. I think the best place honestly right now is to go to our website, windrockwealth.com But we’re on LinkedIn, Twitter, and and other sources as well. Well,

Andrew Brill 35:28
Brett, thanks so much for joining me. I hope everyone gets a chance to read the newsletter. That’s a wrap on another discussion here on Wealthion and thanks again for joining us. If you need help being financially resilient, please head over to Wealthion.com. Sign up for a free no obligation consultation from our vetted registered investment advisors that would be Brett and Windrock. And remember to follow us on social media for the latest news and information to help you invest wisely. Thank you for watching, and until next time, stay informed, stay empowered and may your investments flourish