In this Weekly Market Recap, Andrew Brill reflects on the interviews that took place on Wealthion over the past week in another Wealthion Weekly Market Recap!
ndrew Brill 0:00 Hello and welcome to wealthions weekly market recap. I'm your host Andrew brill. The tech sector got hit pretty hard this week in the measure of market volatility is creeping north up about five points from a week ago. Entrepreneur financial analysts and strategists Tom Lee joined SpeakUp with Anthony Scaramucci this week. He believes there are sectors of the economy that are in recession, but there's also bullish on other parts of the economy with interest rate cuts on the rise, and he believes there could be at least to Tom also touches on the crypto market and where he thinks it's going. Anthony Scaramucci 0:41 Tom is the co founder and head of research for Funstrat global. He's a financial analyst, a strategist, an investor, a businessman, an entrepreneur, but he's also a fortune teller. Okay, you just have to be you have to admit that about yourself, Tom, you are a fortune teller because you see the future before we do, which is why you're probably the most one of the most popular guests I've had on SpeakUp. So let's start with your fortune telling skills. Talk about the economy. Where is it today? And where is it going Mr. Lee? Tom Lee 1:13 Thank you for having me, Anthony. It's always great to have a conversation with you. So I'm glad to be here. In terms of the economy, I think the economy has defied the expectations of many because it remains pretty robust. You know, mainly because we haven't over invested capital in the private sector. You know, companies have been cautious the last couple of years. Because since 2021, the Fed has signaled its war to fight inflation. It kept a lot of companies from overspending on capex, but there is a recession in durable goods and an auto sales. And in housing. I mean, we saw that with existing home sales yesterday. I mean, they're just absolutely getting obliterated. And all of those three things in recession are really interest rate sensitive. So I think the economy probably is at a knife point where if the Fed begins to ease at the right time, and I don't know when that right time is, I think it staves off, what could be a larger softening economy, but there is softness. Anthony Scaramucci 2:21 Let's talk about it for a second. Let's make you the Fed chair for a sec, would you be cutting rates now? Would you be waiting? I understand that they're fearful of going too early because of the inflation dynamic. But it seems like if they don't go soon, you're gonna have a steeper, deeper recession that's necessary. So where would you pull the trigger? Tom Lee 2:44 Well, I agree with your last point, Anthony, I think waiting any longer really does risk. What is a cascade effect? Right. As things start to slow, you unravel things very quickly. So to me, if I was the Fed, I'd be a lot less concerned about a second wave of inflation, which is haunted many FOMC members, with the realization that the things that have been sticky on inflation like housing and auto insurance, they're finally turning and there's not a good re inflation cycle underway. So I I would be cutting sooner. I mean, I think even the idea of a July cut makes sense. Anthony Scaramucci 3:24 But you're bullish. I mean, every time I see your interview, you know, you're, you're one of the people in my life that I have on Google Alert. Okay, I think if you're talking I need to be listening. So when I hear your interviews, you're bullish. Why are you bullish? Tom Lee 3:40 Well, I'm bullish. Now. In fact, you know, I think today I would be buying small cap stocks pretty confidently. Because, one, I think that we are entering a growth scare because things are slowing. But to me, that's only a scare because they turn on a dime or inflect. As soon as the Fed starts cutting, you know, housing demand is going to come back big once people are confident that's going to cut commercial real estate finds its bottom etc. I think a second reason we're bullish is that when we speak to our institutional investors, and we have hundreds of institutional clients in 26 countries and we speak to them frequently, they're far more cautious, and far more skeptical of inflation, and I think had been more risk averse than we believe. And so when when when institutional managers are so cautious at a time when we're relatively optimistic versus consensus, that's also bullish. We also know there's a lot of cash on the sidelines, there's $6 trillion in money market balances. I mean, that's just a mountain of cash. Granted, it's earning 5%, but it won't earn that forever. And then, when we look at demographic trends, like millennials, I mean they are are really entering their prime working years. So there's a lifecycle driver to their spending patterns. And I think there has been benefits from the the growth of immigrants in the US. I know it's it, we're seeing the liability side at the moment. But that, you know, that's a very large labor supply that keeps the labor market from overheating. So I think there's many reasons to be bullish. Anthony Scaramucci 5:22 So, Bill Dudley, the president of the Fed, the former president of the New York Fed, is out with an op ed today on Bloomberg saying that he got it wrong. He's changed his mind. He wants to cut rates immediately. Do you agree with him? Tom Lee 5:38 Yes, I I've been following his comments, because he does. He is influential as a former member, and he has been one of those higher for longer, as you said, to inflect now and to call for cuts. To me that's appropriate. And I think it's a recognition. And he's one of the earlier pundits to recognize this is that there is a lot of softness out there. And if inflation isn't threatening, I'm not sure it makes sense to wait another eight weeks to actually cut rates. So it's, you know, it's it's a pretty big air gap at the moment. And I think people get too caught up in the political noise thinking that this has anything to do with the election. Anthony Scaramucci 6:19 Would you cut 50 basis points? Tom Lee 6:24 I think the Fed could even signal that September is a definite cut date. And if it even is just one this year, I think it really reverses a lot of the softness, because the markets would take that cue from there and pricing, a series of future cuts, which is really the market sort of has a lot of skepticism, but how much cutting the Fed might actually do. But yeah, I would do at least 25 in July. Anthony Scaramucci 6:51 All right, so 25 in July. Is it crazy to get more than one cut this year? Tom Lee 7:00 Markets are pricing in 2.8 cuts. So almost three cuts this year. To me, the drop in core inflation justifies far more cuts from the Fed, because you know, if we think of core PCE running it to six right now, and fed funds are at five, three, that's 2.7 percentage points are real rates. I mean, that's a that's a penalty rate. I mean, that's the rate that you want to choke off the economy. And it's been in place for more than a year now. We fix the deficit through growth, or we have a huge deflation of the dollar. And in that case, of course, if that's the is how it's resolved, you really want to own something that's not dollar denominated. And it could be equities, but very likely, it should be something like Bitcoin or gold. Anthony Scaramucci 7:53 Okay, so let's talk about that Bitcoin has done great this year is up 50% of the ETFs. You see this cascade of money, this waterfall of money exactly as you predicted. The halving happened. And so for those listeners who may not know what bitcoin does, in terms of the network, the network spits out about 900 coins a day, and then sometime in April, it cut that coin distribution in half to 450 coins a day. So the less supply you would think would move the price. The price is more or less been treading water here. You've got overhang issues, you had the supply, onboarding of the government of Germany, you've got the Mt. Gox issue. Tell us about Bitcoin here. Are you still as bullish as you were and what do you think happens? A Bitcoin by the end of the year? Tom Lee 8:48 Yeah, we're still bullish on Bitcoin. You know, bitcoins become an asset class. Now, you know, it's now supported by a growing financial infrastructure, including Blackrock I mean, you know, when you get the Blackrock validating that as an asset class, you know, it's it's not even close to being a flash in the pan. And I think many people forget that. This is more of a signal of how much this asset class will grow over time. Because when institutions got into private equity, or venture capital as asset classes, something, you know, really well, Anthony, that signaled, you know, a decade multi decade period where institutional sponsorship and ownership would grow. So I think we're only in the early stages of where demand is coming from a new source for Bitcoin that hadn't existed, really, since the first Satoshi was minted. And so I think that Bitcoin, unfortunately, is affected by it's a hyper volatile asset. So it's affected by supply perceptions, not just demand perceptions, and on the supply side, you're exactly right. Mount Gox is finally being resolved. That's where really would have been one of the biggest expected overhangs since the since the original hack. And so when the distribution, which is in July when that's behind us, and markets see that there hasn't been cataclysm, I think that's going to be a case for why Bitcoin does really well, in the second half the Germany distribution, you know that that's very strange timing, but that's already behind us now. And I'd say the only thing that I think would hurt crypto is that it's still correlated, and viewed as a risk on assets. So if the Fed is somehow unexpectedly tight, I think it would act as a headwind. But if the Fed starts cutting, I think you're gonna see a move in Bitcoin that would correlate to what small caps would be doing as well. There's a lot of things correlated to a Fed starting a cutting cycle. Anthony Scaramucci 10:49 So 100,000 By the end of the year, is that possible? Tom Lee 10:53 Yeah, I think that 100,000 Or even higher as possible. Andrew Brill 10:58 Lawyer and CPA, Mark Kohler joined wealthy on as a first timer and shared valuable information on how to grow your wealth and save money on taxes. At the same time, he explained how to use your own money to make you money and not pay taxes on those gains. You're talking about people who own businesses and that talk to me a little about, you know, anyone can own a business, even if you have a full time job, you can still own a business or set yourself up like a business right? To take advantage of these things. Mark Kohler 11:30 Yeah, well, after COVID, or during COVID, we had the big formation, the great formation, it was called, we now have over 40 million side hustles in America 40 million, because people are struggling out there. They gotta make ends meet, they're picking up a second job, they're driving a little Uber doing a little bit on up workers, thumbtack or StubHub. I mean, there's just like selling whatever they can to make a few extra bucks. Can we change our mindset a little and say, All right, I'm gonna get out of some debt, I'm going to pick up the side hustle. But maybe I could then turn that side hustle into a wealth building machine, where I can just put away an extra five or 10 grand a year, 15 grand a year, and I can do it tax free, most side hustles you're not paying tax on that first 15k I got plenty write offs, we can chew that up. So now you're building more wealth tax free, putting it away. And a side hustle is a gateway drug people that that is a small business, if you're driving Uber, that's a small business, get over it as a Schedule C, it's a frickin awesome little ride off. And that's that, again, opens the door. And people if they just realize they're sitting on a goldmine, they see their side hustle is a burden is a problem as inferior inferiority complex, complex, sorry, that's a tongue twister. But it's really an opportunity. If estimates are around 70% of Americans have an old 401k from a prior job, anywhere ranging from 5000 to $100,000, just sitting there, and they don't know what the hell it's in. And sometimes it's just languishing back at the old employer. So the step one is to take that 401k and roll it to an IRA. So we want to roll it to a self directed IRA, at our trust company, directed ira.com, you roll the money, there's no penalty, there's no tax, you just moved it from essentially Merrill Lynch to Fidelity you've moved it from fidelity to directed IRA. On day three, we call you up or email and go, What do you want to invest in? So you got this IRA, and you we have the stock platform, but if you have a stock platform, just over to Fidelity, but if you're like, No, I want to loan it to my sister's small business, or I want to do a promissory note on a first trust deed to a contractor down the street, or I want to buy a rental property, then you fill out a bi directional letter. And you would tell us, I created this new LLC, I want you to put that money in is the 100%, owner of the LLC or a 20% owner. And by the way, my kids aren't Roth IRAs coming in whatever my mom's my blah, blah, blah. So you set up this LLC, or law firm has been doing this for 20 years. And the LLC is created. your IRA funds the LLC, in exchange for a membership certificate. This is like on day four or five, most of these we turn around in 10 days. And then the LLC has his bank account with your IRA now funded in there and what other pool of partners you bring together, and you're the manager, that LLC, no one else that's not prohibited. Now, you can't give yourself a paycheck. You can buy yourself a new cell phone or go to Hawaii and look for rentals, but you're going to manage that LLC and you can start directing it self directing it into what you know best. We take no fee, that's your money. And so you get to self directed in that LLC and build it up. Peter Thiel started in tooth in 1999 with 6000 or $5,000 in a Roth IRA, I think it's now over 6 billion. And every time we pass go over you he'd put five grand in six grand in whatever, whatever the month that your annual contribution was. But the rate but your return is unlimited. And so that's how you self direct. Is that easy. I have a health savings account with an LLC and I own this cute little low income housing deal in South Chicago. It's the cutest little meth lab and my health savings account on zap. So I got rent from a rental property going tax free into a health savings account that paid for my daughter's braces, tax free. You can you can direct your HSA, your kids college savings account, the ESA, Roth's 401k, SEPs, simples, blah, blah, blah. Andrew Brill 15:40 And on and on and on. Wow. Mark Kohler 15:41 Yep. Andrew Brill 15:43 You know, I had another question. But you had mentioned trusts? And what's the advantage of setting up trusts for certain things? Do you set up trusts for real estate? Do you set up trusts for your savings? You know, I mean, my wife and I are at the point where like, you know, we own two homes. And do we set that up in a trust just to protect our kids? And is that is that a wise thing to do? Mark Kohler 16:06 It is, and there's so much misinformation out there in the industry on this. There's a lot of wolves in sheep's clothing, that are overselling elaborate trust, your revocable trust that are completely unnecessary. So let me say this to everybody listening. And if I say something here that conflicts with the advice you've received anyone listening, please get a second opinion. Because I stand behind this 25 years as a lawyer helping small business owners all over America. I've done my 10,000 consults. I've got five books out there. I write for entrepreneurs, I've got their credentials. For this people, I am standing behind us. 99% of Americans, all they need is a revocable living trust. It's a trust that you control during your lifetime with or without your spouse, single, married, whatever, no kids, kids, young or old. And that trust becomes the owner of all of your assets, your home, your two homes, your LLC, your s corpse, beneficiary retirement accounts, that trust can be modified at any time. You can have all sorts of rules. My kids get a third when they turn 25 A third when they turn 30, a third when they're 35. money to start a business money to buy their first home. And if I'm still alive, I'm in control. It's a revocable living trust. 50% of Americans don't even have a will. Why don't we have a whole billion dollar industry called probate court and probate lawyers, probate judges, because people don't plan they think they're gonna live forever. If everybody had a will and a trust, there'd be no probate. That's it. And so the revocable living trust is a wonderful trust to stay organized, create some privacy, I love privacy, and there's no asset protection with it. It's about a legacy. It's about privacy. And it's about being organized. Now that other 1% Sure we might do a domestic asset protection trust or an irrevocable a charitable remainder trust, a life insurance trust, ILIT in unique, very unique situation. So if anybody listening is getting pitched a 5, 10, $20,000, stupid asset protection trust structure to LLC is in Wyoming and one in Nevada and one of people. I have never ever ever done that in my practice. And it's it's it's a waste of time. Andrew Brill 18:21 I appreciate that it is there a benefit to trying to set yourself up as an LLC with your employer. If your employer, obviously there's, there's you lose the health insurance, you'd have to worry about that on your own. But if your employer says, oh, you know, we'll make you an independent contractor and we'll pay you as an LLC. Is there a benefit to that? Mark Kohler 18:43 Yes, now we're making a big assumption. States across the country are continuing to crack down on this because state unemployment, federal unemployment, workers comp FICA, the government, federal and states do not like it when we try to convert an employee to a sub, unless they really are a sub. So we want to make sure and the risk is on the payor, not the recipient. If your employer shows up and says, Hey, I'm gonna give you a 1099 and not a W two, say, okay, take it and run, if anybody gets in trouble as them, so but so employers have to be very, very careful. If it looks like a duck, quacks like a duck walks like a duck. It's a frickin duck. And that's the same way it is with employees now. So let's assume you can qualify as a subcontractor. And an employer's previous employer can now treat you like a subcontractor and you have a client. So we're not going to say paycheck or employer ever again, you have a client that's going to pay you as a subcontractor. If you're making more than 50 grand a year, you absolutely have to be an S corp. That you may take an LLC and convert it to an S you may just come right out of the gate as a PC or an inc. i But an LLC does not save taxes, LLC Use do not save taxes. There's protection for structure for organization for branding, s, corporations, SS and small. That's not escorts for those that are going to Vegas this weekend there s corpse, s corpse, save taxes, and you just take an LLC and make an S election, it's super expensive. We charge 200 bucks. So you make that S election, and you're off to the races. So yes, if you can get that relationship setup, hell yeah. All day long. Andrew Brill 20:32 You know, I've heard about converting your 401 K to a Roth, you have you pay the taxes, but you convert it to a Roth. But now you've taken that, you know, if you and there was a great article, it's exactly what you alluded to, there's a great article in the Wall Street Journal saying that there are billions, billions upon billions of dollars sitting out there for people that have changed employers, and completely about forgotten about their 401 K, and it's just sitting there not really making any money because they haven't directed it to make any money. It's sort of sort of put on hold. So you're absolutely right about that. And the Wall Street Journal confirm that people don't once you leave your employer, they forget about their the money they've actually put away for themselves. It's their money. So but converting your 401 K to a Roth benefits. Mark Kohler 21:24 Oh, absolutely. And let's even back up here further. I know there's listeners out there that have already checked out on this topic. They're saying my accountant said I make too much money, I can't have a Roth. Okay, let me repeat that. There are people listening right now that have been told by a dumbass that excuse my French people out there have told you, you can't have a Roth or contribute to a Roth because you make too much money. It is out, right? misinformation, wrong lie stupidity. You can fund a Roth at any age with earned income at any income level, you use the back door. Now if you want to go to the Roth party and walk in the front door, your income account exceed 200 grand ish, single or married. Here's all the levels, I can read them off here. But you can go to the backdoor, what you do is set up a non deductible traditional IRA make your contribution convert to Roth on the next day tax free. It's called a Roth conversion, backdoor Roth. Google it people. I've got articles out your ying yang on this. So that backdoor Roth non income limit procedure is what allows anybody to convert a traditional old 401k or traditional IRA to Roth as well, I could convert a million dollars tomorrow to Roth, any income level? Now I gotta be ready to pay the tax on it. So what we teach is Roth chunking, I want to if you came to me and said, hey Mark, I've got a $500,000 traditional, I want it to be a Roth, you will always win in the long run being a Roth, especially the higher your rate of return, especially if you're self directing, the higher your rate of return, the more the Roth wins. Because see, what the naysayers are saying is, well, you get a tax deduction now, and then we you know, when you pull the money out, you're gonna be tax free, you're gonna be in a lower lower bracket. Oh, really, you've got a crystal ball. And you know what my rate of return is going to be too, because I'm going to have so much more money in this self directing, that when I pay tax on it is going to hurt. No deduction up front is going to pay for that crap. And so Oh, yeah, well, if you change that will guess because I'm not in Wall Street, I control my own damn money. So I'm going to and I, hey, I've got money in Wall Street, too. But I also self direct, and I have real estate we want to be diversified. And that doesn't mean multiple types of stock. Okay, so anyway, converting to Roth wins every time. And I look at a client's tax bracket. So Andrew, you say I want to go Roth. Okay, what bracket are you in right now? Oh, in the seven brackets right now, there's two breakpoints where it's an 8%. Jump on the to the next bracket. We never want to convert too much Roth, that pushes us over one of those two breakpoints. So if I'm going to only go up a 2% bracket or 3% bracket, I'll say, Oh, I'll convert 100k this year 150k. Hell, I'll even take out a mortgage on my house to pay the tax on that because I'll never pay tax again. Done. I just funded my retirement tax free ATM for life. So let's pay that tax now. Go self directed, get a 1015 20% return numbers off the chart. So I want to chunk at it. And maybe over three, five or six years, I've now converted everything to Roth, but I don't have to take a bloodbath and one year in jump into a tax bracket. That doesn't make sense. That's called chunking Roth chunking. I got it from chunk in the movie Goonies. 1984, Steven Spielberg. Thank you. Andrew Brill 24:51 So that's another place that we go back to the real estate. You can actually because you put let's say you you put in 100 $1,000 into your Roth that grows tax free, but at a certain point, you can take that $100,000 out tax free and use it to buy real estate. Mark Kohler 25:10 Okay, well, first of all, I can put the money in my Roth and buy real estate now. And grow it, flip properties, buy rentals, whatever the hell I double my money, triple my money, do developments, commercial developments, whatever inside my Roth right now, I'm not pulling it out, I'm not paying penalty, I'm not paying tax, I'm building it tax free, then, when I've had the Roth at least five years, or 59 and a half, whichever is longer. So if I start at age 50, getting this going by age 59 and a half, whatever's in that Roth, I can walk to the ATM and take it out tax free. anytime I want. There's no RMDs there's no penalty, there's no tax. I love Dave Ramsey celebrates debt free day, you know, when people finally pay off all their debt, they like video, and that's why Debt Free Day, we celebrate 59 and a half over here, because clients are now tax free. Because we've been building our Roth, we want to build that Roth. So 59 and a half, I can go grab money anytime I want. And I can keep investing, I can keep putting more money in it. Andrew Brill 26:14 eToro's Options Analyst Brett Kenwell gave us his analysis on the real estate market, current state of the economy, consumer spending and the likelihood of the Fed cutting interest rates near term. He also talked crypto and the Aetherium ETF and also explained the difference between Bitcoin and Etherium. James Connor 26:35 And what about real estate because I'm reading more and more about how there's various pockets in the US where there's they're experiencing a lot of weakness. And I'm thinking about Austin, Texas, and also pockets throughout Florida a lot of supply coming out of the marketplace. And there's no buyers. Any any thoughts on that? Or did you see or read any commentary from at the banks above? Excessive loan loss provisions associated with real estate? Bret Kenwell 27:03 So the real estate picture is pretty, pretty complex, I'd say I'm not a real estate expert or real estate analyst. But it's a it's a complicated situation. And when you look at not only by region to region, but the different types of real estate as well, commercial real estate, obviously been the big concern for for banks, generally speaking, and for a lot of investors, and, you know, even by banks, it varies a lot whether we're talking about a small regional bank or a large commercial lender. So there's a lot of different variables to consider on the real estate front. And yeah, I'd say there's there's still certainly some concerns there. But so far, we haven't, you know, those those concerns haven't come home to roost yet, I guess is how I'd put up. James Connor 27:45 So I want to get your thoughts on the economy now. Because it's often said that the stock market is not the economy. So in spite of how well the stock market is doing, we're seeing weakness through the economy. And we saw a weaker q1 GDP number. It was also a revised down from one six down to one, three, we have a q2 number coming out, I believe, sometime this week. What are your thoughts on the US economy? And do you have any thoughts on this GDP number that will be coming out? Bret Kenwell 28:14 This is where things can get a little bit tricky, particularly for the Fed. And I will probably touch on rates in a little bit. So I'll you know, save some of the some of that for them. But, you know, the Fed is trying to balance keeping its policy restrictive enough to bring down inflation but not so restrictive. It pushes us into a recession. And, you know, throughout this whole phase of having these this higher for longer interest rate environment, the US economy has continued to chug along pretty well. q3 and q4 were very strong last year. But then like you mentioned q1 came in first it came in weak, then it was revised lower than it just came in very it was growth, but it was not impressive. The estimates for for q2 stand around, you know around 1.9%, depending on on, you know what your what forecast you're looking at. But generally speaking, the growth is just considered mild. It's it's not not wowing anyone, but it's maybe not concerning anyone yet. I think when you look at the last few months of data, though, it's really important for investors to remember that, you know, 70% of the US economy is driven by consumer spending. The consumer is incredibly important to the US economy and because of that the labor market is incredibly important to to the US economy and that might seem like common sense, but that's not necessarily the case all the time, but in the US that is the case. And so when you start to see you know, retail sales come in light when you start to see payroll numbers come in a little lower unemployment rate ticket jobless claims, you know, come in ahead of expectations, you start to see some of those and you you ask yourself is the is the consumer mer Okay, is the economy going to be okay? And unfortunately, these things take a little while to work through the system. And that it kind of has a lagging effect a lagging indicator on how the economy is doing. But yeah, I'd say it's like we kind of said at the top of show it's softening, I wouldn't say it's weak. But that's these are all factors investors should certainly be taking into into account when it comes to not only stocks but how they're allocating money and what the Fed might do later this year. James Connor 30:32 Yeah, you raise a very good point, because the consumer in the US very important. They represent 70% of GDP. So whatever the consumer does, has a massive impact on the economy. And I just want to bring up one fact that back in q1, both Starbucks and McDonald's came out, and many other companies came out and said, consumers just we're not spending as much money in their stores, or the restaurants. And it's going to be interesting to see what both Starbucks and McDonald's and the other restaurant companies have to say, in q4 q2, but what are your thoughts on the US consumer here? Do you see other any other concerns in terms of spending or lack of spending? Bret Kenwell 31:15 You know, I would just say, in some of those cases, that I think it's, you know, I think some of those issues can be company specific, without a question. But on the other hand, you know, when you start to see it collectively at more than one, it's not just one or two companies, we're hearing this from or hearing from a lot of consumer based companies. And so, you know, I would say the consumer is flexible, they can handle a little bit of, you know, price increase, and certainly welcome price decreases, but when they look at higher price at the pump, when they see higher prices at the restaurants, when they see at the grocery store, all these different areas, you know, they're flexible, but the consumer is not a world class gymnast, you know, they, they can't bend over backwards at any price hike. And so at certain points, these companies are realizing that there will be backlash, and there will be pushback from their customers and we're seeing them respond, you know, I'd say in many cases appropriately by, you know, innovating their offerings and and trying to get lower priced options in front of the consumer to get those customers back in the door. But yeah, you know, generally speaking, a softening in consumer spending is a concern for the broader the broader economy as a whole but so far things are they're holding together, but they're certainly off the highs. James Connor 32:27 Well, what are your thoughts on Bitcoin? And is it going to take off as we go into year end? Bret Kenwell 32:33 I think you said it well. I think it continues to consolidate um, we look at the move not only from last fall or year over year, which has been a tremendous rally in Bitcoin but even off the lows this year, you know, coming into 2024 The expectation was we would get bitcoin ETFs we got them in early January. You know, Bitcoin rallied into that event they did the typical sell the news reaction, a nice healthy pullback and then Bitcoin almost doubled, rally like 90% to its highs in early March and since then, we've just seen a consolidation I think that's great. You know, might be frustrating for longer term holders might be frustrating for bowls, but at the end of the day consolidation after a big rally, that's great stuff. If it resolves up through the highs and if the fundamentals remain intact, then you know, we could be looking at definitely looking at higher prices for Bitcoin. James Connor 33:24 Does the other big news in the crypto space is Etherium. Why don't you tell us about that? What's the news? Bret Kenwell 33:29 Yeah, so in May expectations are pretty low that the SEC was gonna give the green light for Etherium they they surprised the market they they warmed up to it they set the stage for approval sometime this summer. The that approval process is complete now and now we look forward to the trading of believe it is eight Etherium ETFs will hit the market. eToro has always offered Etherium via the coin the cryptocurrency just like Bitcoin and like the Bitcoin ETFs will offer the Etherium ETFs but generally speaking, I think it's a good thing. I think it was a good thing for for Bitcoin when they got their ETFs I think it's a good thing for Etherium anytime an asset class has the potential for I mean, an asset is an assets price is driven by supply and demand. So anytime that the market can find a way to increase demand, and in this case, by offering the theory of ETFs gives another way for investors to buy to buy Etherium that may not be so comfortable going out and buying the actual cryptocurrency but they feel a lot more comfortable with an ETF a product that they're familiar with and use and have used before. It just gives another chance for more demand gives a chance for for more price appreciation. I think it's a positive for the industry as a whole and for investors as a whole. James Connor 34:47 What is the difference between Bitcoin and Etherium? And why would I invest in one versus the other? Bret Kenwell 34:54 Etherium tends to have more more applications in Bitcoin and Bitcoin And by many people is considered a store of value but the way I would look at it is Etherium tends to be the number two to Bitcoin and that's just the way it goes. Bitcoin is by far the more pop most popular cryptocurrency and it's the most well recognized one. And you know I, for me, I think those two will probably move not necessarily in lockstep in terms of percentages, but I think they would move in lockstep in terms of direction. And at certain times, Bitcoin outpaces. Etherium in other cases, it's it's vice versa. But me personally, I do like to go with the names that are more cap that have larger market caps have more market recognition, and even though they might not have some of the explosion that the some of the smaller, you know, cryptocurrencies have and I'm not a crypto cryptocurrency expert, so I don't typically get into the smaller coins situation. And I know people make great cases for them. But I like names that have large liquidity, large recognition, and large market cap. So those are, those are the top two for me. Andrew Brill 36:07 There's gold being a big topic of conversation these days, especially with the election coming up in November and the possibility for the devaluation of the dollar. James Connor put together a video on how to buy gold and the different ways to invest in the precious metal. James Connor 36:25 When purchasing physical gold, you have two options. You can buy physical bullion or you can purchase a gold coin like an American eagle or a Canadian maple. gold coins will always cost a little bit more due to the minting charges and also the cost of production. When you buy gold bullion or coins deal with reputable dealers like our sister company hard assets Alliance. hard assets Alliance is a trusted platform used by over 100,000 institutional and retail investors and it has over $3 billion in assets. hard assets alliance will deliver the goal to you personally or you can store it in a vault. All the holdings in the vault are reconciled daily or audited by an independent specialty firm on a regular basis. All holdings are also insured at all times for their full replacement value. The second option available to investors are gold ETFs gold ETFs are traded on exchanges like stocks and can be bought and sold the same way. ETFs are extremely liquid and they don't have the premiums or the storage and shipping fees that come with buying bullion. It's important to understand though that many gold ETFs are not backed by gold bullion at all but are instead backed by futures contracts and therefore they're referred to as paper gold. The last option available to investors is also the highest Rick's risk option that is acquiring shares in a gold mining company. I'm sticking to producing mining companies only. I'm staying away from exploration and development companies just due to the excess of risk levels. Investing in mining companies that are producing can provide additional leverage to the price of gold. But that higher leverage also comes with a higher level of risk. And I want to outline the various elements of risk. There's operational risk, gold miners are profitable only if they can extract and process the goal that or profit. If they run into any sort of complication associated with the processing of that gold, then the gold miner will lose money. Another risk is geological risk. All gold mines have a finite life and so it's imperative for the gold mining company to explore. And sometimes they might spend 10s of millions of dollars every year looking for new gold reserves. So there's also the risk that the gold company can't find any more gold in the gold mine runs out of gold. Another common risk is geopolitical risk. If a gold mining company is operating in a country which does not respect the rule of law, then it's possible that a country can nationalize the mind and in effect steal the mind from its shareholders. And this has happened numerous times, especially if the mind is highly profitable. In short, mining companies come with many more risks than you will find with owning physical gold. Andrew Brill 39:16 Thank you for watching this week's recap don't forget to head over to wealthion.com for a free no obligation portfolio review with one of our registered investment advisors. And please follow us on social media for the latest news and information to help you invest wisely. If you haven't done so already, please make sure to like and subscribe to our channel. And don't forget to turn on notifications to the channel so that you never miss a video. Thanks again for watching. Until next time, stay informed, be empowered and may your investments flourish. 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