Money News You’ll Really Use: June 15, 2021

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Nearly every day there’s news that affects you and your money. From politics and taxes to markets and interest rates, things are happening that affect your savings and your future — so many things, in fact, it’s hard to keep up with them all.

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As usual, my co-host is financial journalist Miranda Marquit. Listening in and sometimes contributing is producer and novice investor Aaron Freeman.

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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Computer-generated show transcript

Market Update Money News You can Use June 15th 2021

Stacy Johnson: [00:00:00] Hey guys, and welcome to a special edition of the money podcast. This is called money news. You’ll really use the concept is simple enough. I subscribed to tons of financial publications and every month I read hundreds of articles. Then once every couple of weeks, I give you the highlights to bring you up to speed on the important news that affects your money.

Think of it as. And investors Almanac and part one today’s show we’ll discuss where we are now and what’s happening in the markets this month in part two, we’ll go over important news stories. Pardon? My I’ve got a little cold going, so pardon my boys here. And part three, we’ll go over recent investments.

The three of us have made I’m your host, Stacy Johnson. My co-host as usual is Miranda Marquit. When I’m random listening in and sometimes contributing is producer novice investor. Aaron Freeman say higher. And Hey guys, how are you guys doing today? Can you guys tell I have a cold yep. Totally voices where you can tell.

Oh yeah. That’s all right. Oh, well, okay. Well I’ll do the best I can and my voice cracks deal with it. Okay. So let’s get the ball rolling. But first a disclaimer, we are going to discuss specific investments in this show, including things we personally invested in, but these are not recommendations. Because what’s right for us may not be right for you before you invest in anything, do your own research, make your own decisions.

Okay. Let’s get back to the news. Let’s start with where we are now and where we were at the beginning of this month. It is now June 15th, 2021. We’re about halfway through the trading day and halfway through June. Now the Dow Jones industrial average at the beginning of June. Was around 34,500. Today is 34 as we speak anyway, it’s 34,000 to 47.

So it’s down by almost 300 points about 0.8%. So last two weeks, the Dow has fallen 0.8%. The NASDAQ, which represents a lot of technology. Stocks has not fallen. It is higher by about 2.4% today than it was two weeks ago. The Russell 2000, that’s your gauge for smaller companies? Uh, is up about 1.7% so far this month, the 10-year bond yield and that 10 year bond yield is important because it’s what a lot of interest rates are based on, including mortgage rates.

Uh, that was 1.5, 8%. At the beginning of June. It is now 1.5, 1%. So interest rates have actually dropped by 4% since the beginning of June. Any of that, a surprise to you guys?

Miranda Marquit: [00:02:24] Uh, no, not really. I mean, you know, we’re all just still kind of waiting to see what happens, you know, later whether we get a big crash somewhere, whether, you know, interest rates start rising, uh, it’s an inflation kicks in, so we’re all just kind of waiting, but I don’t think we’re quite there yet.

I don’t think. Everything’s worked its way

Stacy Johnson: [00:02:44] through. Yeah. The actually the federal reserve is meeting tomorrow. Uh, they, they say that they may start giving hints on doing a little tapering, in other words, a little less support for the economy. So that interest rates may start going up. It’s not going to have any time soon, but they may start talking about talking about, um, doing some things that may make an increase, right?

Yeah. Yeah. Uh, but I’m kind of surprised. I have to say that interest rates are lower now. Than they were at the beginning of the month. There’s not a lot of talking, including on our podcast about interest rates going up or because of inflation concerns. So we’re going to have some of that in the news today.

So I’m kind of surprised that interest rates have dropped. I, I thought that they’ve gotten as high as 1.7% this year on the tenure. And now they’ve got the other 1.5

Miranda Marquit: [00:03:31] stops trying to pretend like anything makes sense. The last two years, like I have just stopped trying to pretend like anything makes sense and anything’s reacting like it should be.

And if you want proof that you know, that markets are not rational. The last two years are we are

Stacy Johnson: [00:03:47] proofs. Yeah, it’s true. It’s, it’s really hard to predict what’s happening. And, and, you know, actually another thing is a little surprising. We’ve been talking about how there’s been a rotation out of the tech stocks, which would, which would be hurt by rising interest rates, uh, you know, stocks like apple and Google and things like that.

And in a, in a movement into the traditional smokestack stocks, which. Traditionally would have more of the Dow Jones, industrial stocks in it. And so, but as it’s happened this month, though, so far, at least tech stocks have done better than the Dell drones, industrial at 30 stocks that represent the Dell Jones, industrial average little stocks, we were hoping we’d do better.

And they have a, and that’s why I bought, uh, and I think, I think we all probably have some, a small stock index fund. We’ll go over that in a minute. Um, okay, so you ready to get you guys ready for your news quiz for the week? Oh, sure. Okay. Now this is the part of our show where I was saying at the beginning, I read lots and lots of articles.

I’m sure other people here do too, but I write down articles I think are important. Now I’m going to read back for, I’m just going to do four. We usually do 5 34 today. Uh, because my say my voice a little bit, but I’m gonna do four of new stories. And then, and then our other two, uh, host here are going to determine which one of those news stories they think is the most important one.

Okay. The first new news story comes from the first day of June from the wall street journal. The headline is battle bruise over banning natural gas to homes. I thought this is an interesting story. Here’s a quote, a growing fight is unfolding across the United States. The cities consider phasing out natural gas for home cooking and heating, citing concerns about climate change.

And states are pushing back against these bands, major cities, including San Francisco, Seattle, Denver, and New York have either enacted or proposed measures to ban or discourage the use of the fossil fuel and new homes and buildings. Two years after Berkeley, California passed the first such prohibition in the United States.

The bands in turn have led Arizona, Texas, Oklahoma, Tennessee, Kansas, and Louisiana to enact laws outlawing such municipal prohibitions in their states before they can spread augment. They’re overly restrictive and costly. Ohio’s considering a similar measure. I thought that was an interesting story. Yeah.

Okay. Now, uh, on the third from Bloomberg, here’s the story your headline is building a home in the U S has never been more expensive. Quote from the story from lumber to paint, to concrete, the cost of almost every single item that goes into building a house in the U S is soaring. In some cases, the price increases of top 100%.

Since the pandemic began, this could be industry killing. If things continue going this way, you said one contractor who has had to tack on price increases during construction of anywhere from. From, uh, 40 to 60%, 40 to a hundred thousand dollars primarily due to rising lumber costs. We’re putting projects off.

We’ve got clients that are hitting their price ceiling. Okay. Your third story, this was on the 10th of June from the wall street journal us consumer prices rose strongly again in may. That’s their headline. Here’s a quote, us consumer prices continue to climb strongly, may surging 5% from a year ago to reach the highest annual inflation rate in nearly 13 years prices for used cars and trucks, lip Sev leaped 7.3% from the previous month driving one third of the rise in the overall index.

The indexes for furniture, airline fares, and apparel also rose sharply in may. And just today, the, uh, producer price index also was up as much as much as it’s been since they started tracking it. Okay. Here’s your last story? It’s very number four also from the wall street journal. This is interesting because it’s in contrast to the other one.

You here’s, your headline lumber prices are falling fast, turning hoarders into sellers. Futures for July delivery ended Monday at $996 per thousand board feet down 42% from the record of 1700 reach in early may. That’s more, that’s still more than the pre pandemic record of $639. Lumber became central to the inflation debate.

Whether a period runaway inflation was a foot or high prices were temporary shocks that would ease as the economy improves further from lockdown. The rapid decline in lumber prices suggests a bubble that has burst. And the question now is how low or how low lumber prices will fall. So that was okay.

I’m going to, I’m going to recap and you guys can tell me what you think. Okay. Well, no, on the 1st of June we had battle brewing over natural gas to homes on the third building home. The U S has never been more expensive on the 10th us consumer prices rose strongly again in may. And then on the 15th today, uh, blubber prices are falling fast, turning hoarders into sellers, which one of those things you think was most important?

Aaron Freeman: [00:08:38] Hmm. I’m thinking you as consumer prices are rising.

Miranda Marquit: [00:08:42] I think either that one or the home building one, um, hardly about the consumer prices rising is that it’s like, they’re comparing it to last year and we all know that. It’s a weird thing from last year to this year because things dropped so low and especially the things that you mentioned, uh, cars, airfares, uh, those kinds of prices were very low last year because nobody was doing anything.

Right. So, um, so it makes sense for them to be higher and have that year over year gain. I think the housing thing is super important because, well, I mean, from somebody who, so I sit on the board for a local habitat for humanity and we can’t even begin to do, like, we were getting excited because we’re like, oh, we can start doing builds again this year with the COVID and you know, uh, just about, oh, you know, receding and all that kind of stuff.

But now we’re like, well, we can’t start bills this year because we can’t predict nobody, no contractor. Well guarantee your price beyond 30 days and everything’s so expensive. And so I think that’s also an issue when it comes to like, everybody’s talking about how high prices are, how it’s difficult to find an affordable house.

We’ve got all these bidding wars all over the place. And, um, so I think that’s a big issue too, because, um, because, because what happens when this current real estate bubble finally kind of

Stacy Johnson: [00:10:06] bursts. And it looks like I I’m reading some stuff that suggesting that it might as well, because things are getting out affordable, even though there’s still, there’s still a dearth of supply.

Uh, the demand is starting to fade because people can’t afford houses. And you happen to live Miranda and one of the most expensive, or one of the, I guess, where the prices have increased the most.

Miranda Marquit: [00:10:27] Yeah. I live in a very, an area where it’s very like the housing prices are very hot and I was actually, I was like, uh, thinking about my landlord, just like, please don’t sell the house.

Please don’t sell the house. Please don’t have the house. And I talked to him and he’s not planning on selling the house this year. Thank goodness. So we’re good for another year

Stacy Johnson: [00:10:44] kids. That’s good. That’s good. And for those who don’t know Miranda lives in Idaho, Which is, uh, w we, you wouldn’t think would be where the prices were rising the most, but yeah, apparently it is.

It’s insane prices rising big time here in south Florida, too big time. Now, there is one thing. This is not go into our Roundup, but this is an interesting story from the New York times. Uh, it was called the U S economy is Sydney confusing signals. What’s going on? And it starts like this unemployment still high, but companies explaining they can’t find workers.

Prices are shooting up for some goods and services, but not for others. Supply chain bottlenecks are making it hard for home builders, auto makers and other manufacturers to get the materials. They need a variety of indicators that normally would be more or less together. We’re telling vastly different stories about the state of the economy.

It’s interesting. And this is all because, and correct me if you disagree, but I think this is all because simply of the pandemic, you know, we, we didn’t have, yeah. Th th people weren’t shipping, uh, you know, the ships weren’t moving across the oceans, carrying goods from Asia to here. Uh, people weren’t working, things were getting closed and now everybody’s got all this demand and the supply chains are broken and it’s just causing all kinds of weird things to happen in our economy.

Aaron Freeman: [00:11:57] Yeah, there’s a lot of shipping issues and it’s still going on. Uh, China was short on containers because they were docked here in the U S um, you’ve got a lot of other Asian markets where, uh, all the work hers left because of COVID or deceased because of COVID. And that’s, it’s hard to get these people back and get new workers in line.

And, uh, there’s a lot of boats. Anchored out in the ocean, just waiting to drop off things. And then you got no shortage of truckers to dispute everything. So it’s, it’s chaotic

Stacy Johnson: [00:12:28] chaos and chaos is the right word. And you know, what’s weird though, is the stock market keeps going up. Yeah. And it’s also weird too, that there’s so many stories about inflation and like, including some of the stories I just read and yet to 10-year bond, which should be interest rates should be going up.

If people have inflation fears is going down, it’s just really weird.

Miranda Marquit: [00:12:49] I’m just going to repeat what I said at the beginning of this episode. Nothing makes sense. Nothing matters. And the right markets are definitely not

Stacy Johnson: [00:12:58] rational. Yeah, they, they really aren’t. You know what I found strange

Aaron Freeman: [00:13:01] as I’m like looking at graphs of these stocks.

And a lot of times I come across things and I like looking at that full like lifetime graph just to see what was going on. And I noticed between 2018 and 2019, just before 2020, there were a lot of stocks, all, all different, weird areas. They were actually on a decline. And then all of a sudden, now these stocks are way above what they should be.

Yeah. Yeah. And I

Miranda Marquit: [00:13:27] think to me, that’s kind of scary. Yeah. And I think, I think part of that too, is, I mean, we have to look at, you know, um, to some degree, some, some level of market manipulation as well. I mean, we’ve already seen like with AMC and GameStop, like, um, chasing these trends, I mean, eventually it’s going to end very badly for lots of people and, um, And I mean, I guess we just kind of have to write it.

This is one of those things where we just are kind of, it is going to be weird and probably going to have to write it out. And this is where, you know, looking at your financial plan and looking at your investing plan and looking at your strategy and saying, okay, let’s, let’s try and stick to these things because, um, because it is it’s, it’s a little bit weird out there right now.

Stacy Johnson: [00:14:13] So, let me ask you guys something, have you bought or sold anything in the last couple of weeks? Investment wise? If you have don’t tell me what it is, but just tell me if you’ve made a move

Aaron Freeman: [00:14:21] or not. I’ve hacked it and I’ve got cash sitting

Stacy Johnson: [00:14:24] aside. Okay. So you have sold something Miranda. Have you done anything?

Miranda Marquit: [00:14:27] I have not changed anything. I’ve not done anything new. I’m like I continue to dollar cost average into the usual suspects. Uh, you know, just the usual index funds. Uh, but I am not, I didn’t change anything. I didn’t buy anything new. I’m not doing any experimentation. I didn’t sell anything, you know, new because I mostly, mostly I did all my selling.

Yeah. I mostly did my selling. I pretty much finished the selling spree last month. So like pretty much, I’m pretty much back to, I’m just looking at everything and going, none of this makes sense. And so, um, So, yeah, other than like, uh, going to Coinbase and getting like rewards, which is basically just free, useless coins that.

Are never going anywhere, going to going pace it, just getting some rewards for funsies. Um, I haven’t actually, yeah, I haven’t changed anything. I’m I’m back to my base level of, this is how much I set aside in the indexing. This is how I dollar cost average. And I’m just back to like, just the basic, um, I’ve just reverted back to the basic and I still have that cash sitting from the selling spree.


Stacy Johnson: [00:15:31] good luck to you guys was sold. So, and that’s obviously not a bad idea when the market’s toppy like it is.

Aaron Freeman: [00:15:37] Well, can, can you guys explain to me what you, what your feelings are on the, um, there’s a couple of articles that keep popping up about corporate bond debt. Now this is obviously where, you know, we’ve put a bunch of stocks, we’ve all bought stocks in these companies.

I’ve got a lot of play money and an interest rates are super low. So companies are like, oh, we’re going to invest. You know? And we’re, so we’re going to, we’re going to do the whole borrowing thing. So now we’ve got. About $10.5 trillion of corporate. You’re

Stacy Johnson: [00:16:02] talking about some zombie debt out there. Oh yeah.

We’ve got some zombie companies and hold on one sec, hold on one second. Everything’s like on a knife edge, right? Because I I’ve got something I did buy and it’s something I’ve never bought before in the 40 years that I’ve been investing, but I’m going to tell you what it is, but you’re gonna have to wait.

You know why? Because we have to sell something in order to stay on the air. We’ll be right back after this commercial message. Okay. We are back now. Let’s let’s address what you said first, Erin, the, uh, the debt that’s mounting up. And I said, you know what? Zombie companies are you guys, I’m sure you do, but maybe some of our listeners don’t, it means companies that would have gone out of business because they’re inefficient.

Interestingly operated, they’re not doing a good job. They would’ve just gone bankrupt, except they’re able to borrow money. It’s such low interest rates because the federal reserve is supporting their debt that they’re in business anyway. And that could be obviously it’s good for them. But it could be bad for the economy overall to keep companies alive.

That really shouldn’t be. And that’s. Is that what you were alluding to Erin? Well,

Aaron Freeman: [00:16:58] yeah. Yes. That was in, in, uh, in the ones that are above the zombie status. Yeah. There are other junk

Stacy Johnson: [00:17:03] bonds. Yeah. And, and, and there’s usually, you know, just as pride goes before it goes before a fall debt usually goes before a recession.

And so we’ll, we’ll, you’ll find these companies when interest rates ultimately go up. Which they ultimately will. Not anytime real soon, but sooner or later they will realize companies will fail. Right. And

Aaron Freeman: [00:17:22] let’s make sure too, this is worldwide. It’s not just a us problem. Yeah. Because

Stacy Johnson: [00:17:26] interest rates are low everywhere.

So here’s what I bought that I’ve never, I’ve never invested in Europe before. That may sound crazy, but I have not almost everything I own is a us company. Uh, but I did buy, um, it’s called M S C a Europe, small cap ETF. So I’m wondering to get into Europe. And I actually, wasn’t starting off buying is a small cap, a which means small company ETF, which is exchange traded fund.

Um, but I decided I would, I would get a small cap, but I wanted to be in Europe for a simple reason. We’ve come out of the we’ve come out of our, um, Pandemic induced recession here in this country, Europe is a little slower. They’re a little behind us. They don’t have the same inoculation rates. And obviously this is not true of every country.

Uh, but some of them do not have the, the, uh, high, low inoculation rates that we have here. So I thought, well, maybe I can get in on a better market in Europe. So I, so I put a little money into this, uh, Europe, small cap ETF. I figured to get a bigger bang for my buck with small cap, there’s more risk in smaller companies, but I figured I’d get a, get a bigger bang for my buck.

I bought that. I bought that on the 1st of June, as a matter of fact, it is now the 15th of June and it’s down 2% sometimes. So my timing was not perfect. Right.

Miranda Marquit: [00:18:40] Well, and that’s okay. We don’t need perfect timing Dewey. You just need to, you just need to be just come out ahead over time. We don’t need to like timing.

Do you

Stacy Johnson: [00:18:51] guys have anything in Europe?

Miranda Marquit: [00:18:53] Um, yeah, well, I do just, just from the standpoint, I do have a, uh, I have a global, uh, ETF, so like a global index ETF that that’s just, you know, stuff that’s not the us, and that includes some Europe and some Asia. So, um, so yeah, so I mean, I have a little bit that way. I don’t have anything that’s Europe specific in my ETFs, but I do have some, um, You know, global index ETFs.

Stacy Johnson: [00:19:19] Yeah. And the, I only have one and it’s in emerging markets, which is it’s global, but it’s emerging markets ETF. And so I don’t really have a global fund. The emerging markets ETF I bought. In March of 20, 21 and above about three and a half percent on that.

Miranda Marquit: [00:19:34] I have an emerging market one too. Um, that’s, you know, it’s, it’s like, you know, the lower percentage of my, my stock holdings, but yeah, the emerging market ETF, it’s always nice to have that just for a little extra growth, perhaps once, like you said, though, I mean, there are things like, you know, the small caps are going to have a higher degree of volatility and come with a little more risk, the same thing with an emergent in the emerging markets.

Right. On the one hand you could get in and, you know, see some great growth on the other hand, it could just, you know, fail miserably.

Stacy Johnson: [00:20:04] So yeah. Yeah. I don’t know. I don’t put a lot in these things, but, and this is the first time actually, I think because of doing this podcast, I’ve started buying ETFs because usually those of you who’ve listened to podcasts for a while will know that I’m a, I’m a single stock buyer I bought and I own about 30 different companies, but I’ve started just buying some ETFs.

And I find that they’re not as exciting in terms of how fast they move. Yeah. But I feel like, you know, it’s, I feel safer. You know, it’s a safer thing to do to buy a big basket of stocks instead of putting all your money. In one, in fact, speaking of Asia, I bought Baidu. Um, yeah, well, not nice because I paid 200 for it, which I thought was an awesome price.

Yeah. Now it’s 180 6. I’m down 70% on that. I bought that at the end of March of this year. And I mean, it, the day after I bought it, Miranda went to two 20. I mean, it was up 10% in 24 hours. Yeah. Not so much. Well, that’s

Miranda Marquit: [00:20:59] the thing, right. Is, I mean, you know, I do these little experiments and it’s kind of fun to watch the wild ride because I know it’s it’s money that, um, I’m not going to, I mean, you always feel bad when you lose money, but it’s not like an, a devastate me or anything.

And so, uh, so yeah, so, so it’s, so it is kind of, I mean, you know, during the experiment phase, it’s kind of sexy to be like, oh, I have doge coin, but you know, for long-term planning, it’s, it’s nice to be like, you know, sexy is really overrated. Investing. So I don’t know, bro rated when you’re investing, I’m just going to stick with my boring old frumpy index ETFs and call it good.


Stacy Johnson: [00:21:37] now, okay. Now I also own the, the global, um, no, I’m sorry. That’s global is the name of the company. It’s a us infrastructure development ETF. So an infrastructure fund here in the U S and I bought that also in the middle of March and it’s up 14%. So all my ETFs have not been losers. Oh no. Yeah. What else?

We talked about this a long time ago. Small caps, right? We were talking about how small caps 90. Well, I saw, I bought the Vanguard small cap value ETF in February, yet the end of February, I’m up 11% on that.

Miranda Marquit: [00:22:08] Yeah. So I don’t, I don’t consider that super sexy. Um, what I’m talking about is like, when people are just like, you know, it’s going to the moon.

Yeah, yeah, yeah. Like those kind of trendy things where you’re just like, you know what everybody wants to get involved and everybody wants to like talk about it and everything else like that kind of. Sexy, you know, nobody wants to be like, go find yourself a boring infrastructure fund because the us is crumbling and we’re going to have to do it sometime.

That is very good.

Stacy Johnson: [00:22:37] Okay. Let’s talk about, let’s talk about Nvidia. I bought Nvidia last March, March of 2020 for $198. And now it’s 716. Now that’s sexy.

Miranda Marquit: [00:22:49] Yeah. Well, I mean, obviously you’re a genius

Stacy Johnson: [00:22:53] obviously,

Miranda Marquit: [00:22:54] or, or, or everybody’s freaking out over NFTs and crypto mining and they need Nvidia graphics cards to

Stacy Johnson: [00:23:02] make it happen, which makes me a genius either way.

Miranda Marquit: [00:23:06] Well, you know, I did, I did do that. Sam Adams play that sad. It, yeah. I mean, that was, that was in

Stacy Johnson: [00:23:13] less than a

Miranda Marquit: [00:23:14] year. Right? I did quadruple in less than a year. It was insanity.

Stacy Johnson: [00:23:19] That’s luck. Mine was skill.

Miranda Marquit: [00:23:21] Oh no, no. I’m the genius here.

Stacy Johnson: [00:23:25] You very

Miranda Marquit: [00:23:26] well. Neither of us are genius as everybody.

Stacy Johnson: [00:23:29] That is true, but it’s better to be lucky than smart.

You know what they’re saying? That’s right. Okay. Now, Aaron, you got anything to add? Have you, you, you said you sold something. What did you sell? No, I

Aaron Freeman: [00:23:39] just have to all my position cause I wanted, okay, here’s the deal. Here’s the, obviously I’m not messing with the same amount of money as, as you guys are.

Cause I’m the newbie. And um, but I, I will say to listeners, anybody who is thinking about getting into stock buying here, here’s the deal. I had money in a savings account and of course, you know, how savings accounts grow? I was making like $2 a year. Yeah, right. And, um, I kept saying to my wife, you know, everything, we should put this in the stock market reading, you know?

So when we first started this podcast, I put a little bit in on no, that’s when we were talking about Ford and all that kind of stuff back in the day. And I only put in actually the rest of it, about 11,000 of it just in, um, March of this year. So in this short amount of time, um, I’ve taken that, that small amount and I made about 3,500 bucks.

And that’s a hell of a lot more than it was making, sitting in the. Savings account. So, um, so anybody out there who’s got money sitting around in their savings account is not doing a damn thing, even though I’m, I’m still new to this. I’m not doing very well. Like most people. I mean, if I took all my money and put it into Ford, I would have made a ton of cash.

Um, but I would, I would definitely suggest doing something in the stock market versus just letting us sit in a savings account.

Stacy Johnson: [00:24:55] Let let’s, let’s hasten to add though, there, Erin, that this is money that you’re not going to need for five years. When you’re, when you’re approaching the stock market. Yes. Well, yeah.

I mean,

Aaron Freeman: [00:25:04] yeah, there’s money you have that you’re not going to use. I mean, it’s much better sitting here than it is in a savings.

Stacy Johnson: [00:25:10] Yeah. And the reason the stock market does better, uh, is because it has to, it does better than savings over long periods of time over traditional savings accounts wide. Cause it has to, because if it didn’t, no one would put money in it because it’s riskier.

So the fact that it’s riskier is what makes it. Uh, return more, uh, than traditional savings accounts. And that’s why you don’t put in more than you. You’re gonna put in money you’re gonna need soon and you’re and you do it very carefully.

Miranda Marquit: [00:25:36] And you do want to, once again, uh, once again, one of the reasons like you said that you want to make sure this is money, you’re not going to need for.

Five years or so is because inevitably there is going to be a crash. We don’t know when it’s going to happen. It should have happened two, three years ago, but it did it. And so, but you know, we’re right. Eventually it’s going to happen and eventually there’s going to be a crash. And so part of doing this too, is you’ve gotta be able to gut that out.

You’ve gotta be able to ride out that crash and you’ve gotta be able to gut it out and, and look for the recovery on the other side, uh, because you know, that’s, that’s going to be an issue. People are going to run into right now. Um, and then the other thing to think about too, um, especially Aaron at well, and me too, because I, I am going this gal did log some short-term capital gains.

So, uh, the other thing to think about as well, uh, you know, when you’re trading in and out and buying and selling is that those long-term versus short-term capital gains taxes. So if you have something for a year or less, you are going to pay, uh, on those gains anythings that anything that you earn. Um, you are going to pay at your marginal tax rate.

So that’s something to think about. Um, and then, uh, for term capital gains, it’s a lower rate. And for a lot of people, especially beginners who are in kind of those, like, you know, that 10%, 12%, 15% tax bracket. If you have a long-term capital gain, you don’t pay taxes on that. Um, your, your TA, you know, so, so that’s something to think about.

If you can get in there and you can hold for a year and a day, at least then that can help you out with those, uh, capital gains taxes. I’ll tell you what

Stacy Johnson: [00:27:12] the Miranda that’s great advice for sure. But I’ll tell you what. There are many times when I’ve held on to a stock, trying to get that long-term capital gain rate and regretted it.

Miranda Marquit: [00:27:21] You know, I’m not, yeah. I’m not saying I’m not saying base. Yeah. I’m not saying base it on your taxes. I’m just saying you need to be aware of this when you’re, when you’re doing the thing. I

Aaron Freeman: [00:27:29] think this is why the show is good. Cause if you listen to what Stacy mentioned in the beginning here, we talked about natural gas billing homes are being expensive.

Uh, the U S consumer prices rising. So it’s slowing down people shopping. Then he got lumber prices falling. I’m listening to you because it makes me think, well, how should I invest? So if you’ve got a whole bunch of states saying, okay, we’re going to outlaw natural gas building, you know, and homes. Well, that should automatically direct you to go well, where does energy come from?

Well, then that leaves you with green energy and nuclear energy. Yep. You know, so maybe we should push it stocks behind that. Then you, uh, you tell me that home building in the U S is very expensive. And a lot of that has to do with the fact that right now we’re having trouble, trouble getting concrete and we have trouble getting lumber and everything like that.

There is an innovation out there that probably going to disrupt the entire thing and that’s 3d printed homes. So the second you’re able to invest in that. That could

Stacy Johnson: [00:28:25] be a thing. Aaron, I am so proud of you because honestly that’s exactly the way you should be approaching investing. Long-term looking at trends in the future and, and a lot of people, it seems natural.

It seems simple, but a lot of people don’t do that. And you’ve really, you’ve really picked up that technique and you’re absolutely right. And, and right now,

Aaron Freeman: [00:28:44] like you guys are talking about the consumer price index is high. Um, that’s affected my shopping and, uh, that’s no different than Stacy saying, Hey, I used to see people, you know, using iPad iPod.

So I bought apple. It’s kind of the same thing here where if Lumber’s expensive, like even the lumber costs has go down, you go to home Depot right now that two by four is still cost. $8 is still expensive. Cause they got to sell those that they bought at a high price. Um, but S it’s, I’m not doing any projects right now because of it.

Um, my parents were going to go buy a used car. They’re not doing that now because used cars are up 30, 60% and that’s probably

Stacy Johnson: [00:29:20] across the entire nation. Yeah, it is. Well, I just said it, the CPI was, uh, the cars went up 7% use cars went up 7% last month. Yeah. So many people invest based on what’s happened in the past.

Um, VR, for example like this, oh, it used car prices went up 7% last month. I should buy AutoNation, you know, instead of thinking about what’s going to happen in the future, because what’s going to happen is people are going to buy used cars. So a hundred nation might be the exact opposite as documented by.

And I’m not saying one thing to the other about auto nature, because I don’t know the stock, but you don’t want to, you don’t say that you should be looking forward, not

Miranda Marquit: [00:29:54] backwards. This is why I index because it requires a lot less thoughts.

Stacy Johnson: [00:30:00] Oh, stop it. You love thinking?

Miranda Marquit: [00:30:03] I like thinking about some things, but it makes my head hurt mean to a certain degree.

Right? I mean, same, same basic thing. Right? I mean, you, you do want to kind of, like Erin said, you want to kind of think about that and say, okay, well what, what could these impacts be in the future? What can we expect? Um, and this is why, you know, most of the time when I buy individual stocks, they are experiments.

They are, uh, you know, and the bulk of it remains indexing. Because that way I don’t have to think about. That’s and it really gets down to what, what your strategy is and what you’re comfortable with.

Stacy Johnson: [00:30:37] Yup. You’re, you’re, you’re the brakes of our vehicle Miranda. You’re always to being sensible, telling people what to do.

And you’re absolutely right. Every single time.

Miranda Marquit: [00:30:45] It’s such a Debbie downer. You’re not, you’re not well let’s, let’s pick some stocks. Well, no, no kids let’s just index and move on,

Stacy Johnson: [00:30:55] but it’s coming from a woman who buy doge coin. I mean, for crying out loud.

Miranda Marquit: [00:31:00] And I did well off of it and I did fine off of it.

Yeah. I mean, I missed, I missed the top. I mean, I sold before it hit the top, but I still made money and that’s still money in the bank and I don’t regret it. No FOMO.

Stacy Johnson: [00:31:15] Good. Yeah. Well, you shouldn’t have FOMO. You did well. Okay. I am afraid we’re out of time guys, but we’re never out of any topic. Dig deeper.

You’re going to find links to lots more into what I mean, lots of info in our show notes. And remember if your goal is to make more, to spend less to retire rich, your online home is money talks, And don’t forget to check out Miranda’s online home as well. That’s Miranda, Mark Witt, M a R Q U I T.

Dot com. If you’ve got a question, comment or topic, you’d like to suggest we’d love to hear from you. Email us at hello at money talks, That’s hello at money talks, And one last thing, if you appreciate what we do, do something for us. Subscribe to this podcast takes you two seconds.

Really helps us. So if you like a show us and subscribe, I’m Stacy Johnson and I’m Miranda, Margaret,

Aaron Freeman: [00:32:04] and I’m waiting for a correction.

Stacy Johnson: [00:32:05] Aaron Freeman. Thanks for hanging out with us, everyone. We’re going to see it right here. Next time. .

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