This week I talk about more market volatility, 401K Plans, Warren Buffet news, Debt Management, and more..

If you're looking for a trusted source to help you stay on top of the ever-changing financial world of investing, retirement and estate planning, and asset protection, whether it's for you and your family or your small business, you're in the right place. This is the 1715 Treasure Coast Financial Wellness Podcast, where we'll keep you up to speed with the latest market news and conditions every week. Now here's your host, Thomas Davids. Hello and welcome to another edition of the 1715 Treasure Coast Financial Wellness Podcast.

My name is Thomas Davids, and I'm a wealth advisor here in Stewart, Florida, and here to help you out. So big week this week. It's been, volatility is back, and sure wasn't a great week. Actually, it was the worst week of 2023 in the markets, as they declined to their lower levels of the year.

What does that mean for you and your portfolio? Well, we're going to talk about it, and maybe some adjustments that you can make. Maybe your portfolio was as volatile as the market, and you don't like it. So what can you do to maybe subside some of the volatility in your portfolio?

With that, we'll talk a little bit about the news this week. There were some big reports that came out, and we'll talk about those, and we'll get started. So here we go. So this week, Jamie Dimon was on one of the financial broadcasts, and he went from Hurricane Jamie down to what one analyst said, Thunderstorm Jamie.

If you remember back, Jamie Dimon from JP Morgan came out and said that we're going to go into a financial hurricane. That tone has seemed to dramatically come down. One analyst said that it was relative to the environment that we were in at the time when he made that call. But certainly, it seems like now that that recession outlook for 2023 or 2024 has been toned down.

So he's gone from Hurricane Jamie down to Thunderstorm Jamie. I thought that was kind of funny with the nickname there. So one of the things I wanted to talk about this week was an article that I put out on my website, tbwealth.net, and that is how to invest like a millionaire, and what is it that millionaires do, and how are they so successful? So one of the first things they do is they set goals, and maybe they're small goals, and ultimately achieving that large goal, whatever it may be, like become a millionaire.

That may be a great goal, right? So Steve Jobs had a great saying, right? If you don't write it down, it's just a wish. So make sure that you're writing down your goals, and you can check them off as you achieve them along the way.

Secondly, is diversifying your portfolio, and that's not just your stock portfolio, your investment portfolio, which is going to be stocks, bonds, some cash, and whatever may be inside that brokerage portfolio that you have. But that also may be some real estate, and also I'll talk a little bit about, you know, there's some great books that talk about having those three different levels of income. So those are all about diversifying your portfolio, and that is certainly very important. Third, is you want to make sure you're tax planning.

We want to make sure we don't give our monies away to the government. So work with a CPA, work with a tax advisor and a financial advisor, and make sure that you're doing things that are tax efficient, and you're doing things in the most tax efficient way. A lot of monies can be lost, especially the way maybe you set up your corporation, whether it's an LLC, an S Corp, a C Corp. You want to make sure you reach out to a CPA, someone that has knowledge in the matter, and really make sure you're doing things in a tax efficient manner, and that is all about tax planning, and that is very important.

Fourth, is risk management. One of the things that I deal with every day is, you know, risk. You know, are you taking too much risk inside your investment portfolio? Maybe in the business that you own, a lot of people don't look at that.

You know, do you have maybe too much equipment? Maybe you're a contractor, and you have 30 or 50 trucks, and you know, business is going to slow down. You know, or maybe you don't have enough trucks, and business is booming, like here in Florida, where the construction business is just out of sight. So risk management is certainly important, you know, not just in investment portfolios, but along in your business.

So these are things that you want to sit down and look at, and once again, as a wealth advisor, I can certainly help you sit down and, you know, look at the risk, and make sure you're mitigating it in the proper manner. And so lastly, is estate planning. This kind of goes along with tax planning, working with an estate planning attorney, making sure that things are set up, once again, in that tax-efficient manner, having things just set up in the right way. You know, if you want to Google a case, look at Joe Robby and the Miami Dolphins, oh my gosh, what a horrendous estate, you know, there was no estate planning, and so much money was lost to the family.

Had they had an estate plan in place, whether it be a trust or something of the sort, make sure that you have set up with an estate planning attorney. And these are just a few things that millionaires do, and it's really a high level of what millionaires do, but I'll go over it again, you know, set goals, diversify your portfolio, make sure you're doing things in a tax-efficient manner, manage risk, man, it's so important to manage risk and stay ahead of what's going on, what to anticipate, you know, speaking to people in your profession, you know, about past events, and learning how to mitigate, you know, maybe future risks. And then lastly, the estate planning, you know, making sure that you have an estate plan set up, whether it be a will, trust, you know, the healthcare advocates, you know, we've talked about this, those are some things that also are very important. So hopefully, it gives you a little tidbit, once again, you can go on the website, tdwealth.net, it's under the blog, and it's on the front page of the website, just scroll down and you can see Invest Like a Millionaire, and it's a short article that talks about it among other great articles.

I did also want to mention this week about real estate and what's going on in that market. Most of the country is seeing a decline in home prices, there is more availability. We are also seeing some of that here in Florida, although home prices have pretty much flattened. There is a little bit more inventory coming on the market, but not much.

The traffic is unbelievable. I'm hearing it from all around the state, not just here where I live in Stewart, but Fort Lauderdale, Naples, and on the West Coast in Tampa. So Florida, Texas, Georgia, it seems that the people are moving to where there's no state income taxes, and you know, the home prices are just holding up, not like the rest of the country. I mentioned last week that there was a venture capitalist that talked about venture capital money coming into the state.

He said it's up 80% into Miami, and the second closest was a negative 45% in Texas. So that is just unbelievable statistics. Thought I'd mention it, the number one investment that most people have is their home. So stay on top of real estate values.

Go to Zillow once in a while, see where your home price is valued, especially as you're closing in on retirement. I know a few people that that is their biggest investment, and they look to sell that to fund their retirement. And if the home values are continuing to decline, it may be sooner than later that you may want to put that property up for sale. So certainly consult with a real estate professional, and I just thought I would add that here in the podcast this week.

So with that, we'll talk about how to position your portfolio, and things that you can do to really kind of quiet down some of the volatility, and really just kind of look at what you have inside your portfolio. What was the most volatile, and is it right to make changes inside that portfolio? I always recommend consulting a professional, and getting that second opinion. Don't do things on your own, get that second opinion, go out there, talk to a financial professional like myself, or another advisor, and just pick their brain.

Most advisors will speak to you for free at no cost for that initial consultation. So inside your portfolio, if your portfolio was volatile, more than likely it's high in technology, because that has been the most volatile, even into 2022, into 2023. We've seen some of the technology stocks like Facebook, and Google, and Amazon, you know, really spring up 30, 40, 50, 60% like Tesla, and now they're starting to come back down a little bit. So your portfolio may be exposed to some of those technology stocks, and certainly you might be able to move away into some more of the dividend payers.

That has been the big theme. We're seeing a lot of inflows, as reported in the Wall Street Journal, inflows into stocks that are dividend payers. And for my clients that know me, they know I love dividend paying stocks. Why?

Because if you have a market that stays flat, you are still getting income from those stocks. So if that stock stays idle, and I'll mention AT&T that pays almost 6%, well if AT&T stays flat for the year, I'm still getting over 6% in my portfolio from that individual stock. So that may be something in your portfolio that, you know, seems to be a theme right now is going into dividend paying stocks. I mentioned AT&T.

Another one is Verizon that I like that pays a great dividend, and also Altria Group has always paid a great dividend there. Big news this week with Intel. Intel has always paid a nice dividend, and they have cut their dividend now by 60%. So that is something to look at.

Interest rates on the rise again. With the employment numbers coming out, it looks like more interest rate rises for a longer time. So more interest rates, and they're going to do it for a longer amount of time. This is one of the things that unsettled the markets this week.

Is this new news? You know, we know that interest rates are going up. They're going to continue going up. And you know, the bond purchases have stopped with QT.

So this really isn't new news, but you know, the sentiment a couple weeks ago seemed like that the Fed was maybe going to let their foot off the gas a little bit by raising only a quarter of a point, is 50 basis points back on the table now with these hot numbers of employment and CPI numbers. So another thing that came up this week was more Americans now are in debt and how to handle debt. Now I will dedicate a podcast, How to Manage Debt. This is a bad issue.

I'll just say this. If you have credit card debt, that is the absolute worst debt to have. Credit card rates right now are like 25 to 30%. It is obscene.

So if you've got that credit card debt, pay it off, get rid of it. If you own a home and you can take out home equity at a much, much lower rate, that may be an option for you. Once again, talk to a professional. Have them look at your overall finance.

But if you have credit card debt, you've got to get out of it. And if really, if you're 25, $30,000 or more in credit card debt, you may want to talk to a bankruptcy attorney because this is a huge amount that you just may not ever get out of that hole. If you have good credit, consolidate those credit cards. Get them all to where you're making one payment on one card.

That's some small advice on credit card debt, but that's the worst debt that you can certainly have. So some more news, Warren Buffett put out his letter, and guess what he did? He was greedy when people were fearful. Although Warren Buffett and his company, Berkshire Hathaway, were down pretty big in 2022, they were out buying.

They were out buying big time. Old saying, right? Be greedy when people are fearful and fearful when people are greedy. So Mr.

Buffett and Berkshire Hathaway last year became the largest shareholders in these eight companies. So if you want to follow Warren Buffett's playbook, he is now the largest shareholder, I should say Berkshire Hathaway, is in American Express, Bank of America, Chevron, Coca-Cola, no surprise there, he loves Coca-Cola, HP, Moody's, Occidental, and Paramount. So those eight companies now, Berkshire Hathaway, are the largest shareholders. So I know a lot of you out there, you know, follow Warren Buffett and his methodology, and if you weren't aware, those are the eight companies that he is now the, Berkshire Hathaway is the largest shareholder in those particular companies.

Something else we've talked about, I've talked about on previous podcasts, target date funds. Interestingly enough, a report came out about how 401Ks lost last year and were down and there's less 401K millionaires, well, most of them, 80% have their monies in target date funds. I'm not a fan of target date funds, in 2008 they did not work then, and my guess is they're not working now. They're supposed to be more conservative as you get to that date.

Get out of them, get out of them, please, please, please, the target date funds just don't work, they don't do what it is they're supposed to do, and it seems the proof now is coming out again, when we had a down year, that they did not become more conservative the way that they were supposed to. Now this may not be all target date funds, and I'm kind of covering a broad spectrum, but for the most part, I am not a fan of these funds, most 401K plans have different options where you can invest directly into the S&P 500, into the NASDAQ, a lot of them have real estate options, more than just those target date funds. If you need help with that, call myself, talk to an investment professional, have them look at what your investment options are in 401Ks. One thing we do here at Davies Wealth Management is we manage 401Ks, so if you have a corporate 401K and you want some help with it, give me a call, I can help you with that, but once again just try to stay out of those target date funds.

Lastly here, IRA contributions, April 15th is coming, you can still make those 2022 contributions into your IRA portfolios. Does it make sense? Will it help your income and save you on some taxes? You can contribute into your IRAs, check with your CPA or whomever does your taxes, if you haven't done your taxes already, and have them just run the numbers.

Just making a contribution into your IRA, will it save you on some income tax? Recent story, a client was able to contribute $7,000 into their IRA and it saved them $2,000 in income tax. So check with your CPA, see what they're doing, and just say, hey look, does it make sense for me to open an IRA and make that contribution? Once again, check with your CPAs on that.

Another interesting little tidbit this week was commuting for reach, or I'm sorry, commenting for reach in LinkedIn. So that's making a comment on a post and the comment is, I'm commenting for reach. I found this really interesting because a lot of us, like myself here, are on social media and apparently the algorithms don't pick this up, whereas some people are going to argue maybe just commenting with a like or a thumbs up, but putting that actual comment in the comment field, commenting for reach, will expand that out if you want to build your brand. So if someone like myself, if you just want to add a comment, commenting for reach, that would be great.

I'll let you know if it works. And I found that interesting article this week in the journal. So with that, I'll go back to positioning your portfolio and talk a little bit about asset allocation. I think a lot of you here are looking for ideas in your portfolios and how to handle some of the volatility.

Once again, it doesn't feel good when markets go down, especially this week. Everything went down, including bonds. But bonds are a way to subside some of the volatility in your portfolio, whether that be a bond fund or individual bonds. And with interest rates rising or interest rates that have risen, you're seeing 5, 5.5%, even 6% in some of the corporate bonds.

And those are going to be individual bonds. So a lot of questions is, well, how long do I have to hold a bond? Well, in a bond fund or an ETF, it trades just like a stock. So if you wanted to get rid of it, you could get rid of it the next day, that day, or wherever it you need to be.

Generally, we like to invest and not speculate. So if you are going to buy something, particularly a bond or a stock, at Davies Wealth Management, we invest. We don't speculate. Although, if things change and we need to make a change, then we're going to do that.

But just generally speaking, when you buy something, you're looking to invest. And that's typically a three to five-year time horizon. And that's an investment and not speculating on a stock or a bond. Individual bonds, they trade similar to stocks, just on different exchanges.

And you're seeing, once again, those 5% and 6% yields. So that may be an option in your portfolio that you can go out and purchase those individual bonds. And that may subside some of the volatility, because bonds typically don't move like stocks, whereas stocks have a lot more volatility in them. So hopefully you found some of this information useful.

I'm going to wrap it up here. Thank you for listening to the 1715 Treasure Coast Financial Wellness Podcast. Don't forget to like and subscribe. Or hey, make that comment, commenting for reach.

Let's see how that does. I'd be very interested. Thanks again for listening, and we will wrap it up here and talk to you next week. I am out.

Thank you for listening to the 1715 Treasure Coast Financial Wellness Podcast. If you enjoyed this episode, share it with a friend who might like it. And please rate, comment, and subscribe. If you'd like to contact us, find more information.

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