Mail Bag with Brian Regan; pros and cons of concentration

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The following is paid programming.

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Welcome to Something More with Chris Boyd.

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Chris Boyd is a Certified

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Financial Planner

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Practitioner and Senior

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Vice President and

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Financial Advisor at Wealth

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Enhancement Group,

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one of the nation's largest

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registered investment advisors.

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We call it Something More

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because we'd like to talk

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not only about those

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important dollar and cents issues,

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but also the quality of

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life issues that make the

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money matters matter.

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Here he is, your fulfillment facilitator,

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your partner in prosperity,

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advising clients on Cape

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Cod and across the country.

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Here's your host, Jay Christopher Boyd.

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Welcome to another edition

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of Something More with Chris Boyd.

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I'm Jeff Perry.

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I'm sitting in for Chris for this episode.

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Chris is at a convention,

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a financial services,

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financial planning convention this week.

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And so I'm sitting in and

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joining me is Brian Regan.

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Brian is a member of Team AMR.

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He is a senior portfolio

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manager with Wealth

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Enhancement Group and a

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regular guest on our show.

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Thanks for joining us, Brian.

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Hey, guys.

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How are you doing?

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great also joining us is

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russ ball the newest

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addition to team amr russ

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thanks for working the

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control panel and joining

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us for this episode of

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course happy to be here for

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the people who click the

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podcast link they'll see

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the title of this episode

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is mailbag with brian regan

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and what that means is

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brian's going to handle a

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couple of questions that

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have come from clients and

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give us a uh his opinion

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and we'll have a dialogue on the issue

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Brian,

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this first one came from a recent

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client review.

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What that means for the

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listeners who don't know is

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at least annually,

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we sit down with a prolonged meeting,

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a couple hour meeting with

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our clients to go over

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their financial plan that

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they have in place and

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discuss if they have any

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changes to their life or

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anything that they're concerned about.

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We follow up with any things that we see.

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And this particular client,

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is a big fan of yours.

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He watches all of the

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webinars on the markets and the economy.

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He just, you know, he loves that.

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Not everybody loves to dig in that stuff.

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I know you do,

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but he just loves learning more about it.

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And so this issue that I'm

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going to describe

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has come up repetitively in

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his annual reviews and

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conversations with him.

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And he's kind of been,

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I won't say stuck that's,

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but it's the best word I

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can come up with.

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He keeps hesitating on doing

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something that we are

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suggesting that he do.

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And this year it came up

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again and he seemed more, um,

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interested in doing

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something with this part of

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his portfolio.

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and he asked us, he said, would you just,

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would you pass this question by Brian?

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And I said, you know what,

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how about if we pass this

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question by Brian on the

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podcast and let him answer it?

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And he just, he loved the idea.

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So, uh,

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we know he'll be listening to the

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answer and, uh, we'll see how it goes.

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So let me, let me, I know, you know,

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the question because I

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formatted it to you, but, um, let me,

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for our listeners, uh,

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Read what I sent you.

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So this is a client who's

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about seven years old.

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He's got about one hundred

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thousand dollars in Verizon stock.

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He was an employee of

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Verizon and like many

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employees of corporations,

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he acquired stock over the years.

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And he very much likes every

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quarter getting a dividend

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of about fifteen hundred,

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sixteen hundred dollars.

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It's the dividend on the stock right now.

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Annualized is about six

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point five percent.

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client is looking for income

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but he's concerned about

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the risk of this individual

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stock verizon a potential

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decline in the value of

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verizon and thus maybe they

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don't have the ability to

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continue to pay uh their

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dividend as a side note

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which I didn't write in the

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email brian we

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When during this discussion

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that we have with this client,

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the issues of the former

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issues with AT&T comes up

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because he was in a holder

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of AT&T and similar

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concerns and AT&T

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ultimately in the past had

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cut their dividend and

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shocked some people who had

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bought the stock.

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So that comes up in the context.

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Overall,

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the client has a moderate risk profile.

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He's not afraid of risk,

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but as he's getting older,

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he's becoming more conservative thinking.

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the question is what would

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you suggest he do I think

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knowing that he likes the

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income stream what would

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you suggest he do with this

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hundred thousand dollars of

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verizon stock all right so

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I'm gonna get in the

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verizon I I'm not gonna

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leave rick hanging um so

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before I do that I do want

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to get into uh some of the

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reasons on why I don't

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recommend buying a stock

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just for the dividend yield.

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As a general rule of thumb,

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I don't think that's a good idea.

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Now,

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oftentimes the dividend yield is high

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because a dividend cut is imminent.

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You mentioned AT&T, that did happen.

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It tanked the stock at the time.

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I believe they have the

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dividend if I'm remembering correctly.

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so sometimes the high

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dividend yield uh could

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mean that it's just you

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know it's just a mirage

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this is a temporary thing

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it's it's gonna be you know

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cut in half in the case of

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at t it's some some future

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point in time probably very

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soon um that's oftentimes

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what the what the market is

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saying when it cuts the

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price down so much uh that

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the dividend yield looks

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high now that's not always

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the case and we'll get into

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you know verizon specific

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um after a few more points

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Now,

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there's a few reasons why I don't like

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buying stocks just for the dividend.

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Dividend-oriented funds and

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stocks chronically

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underperform stocks that do

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not prioritize dividends.

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Now,

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there's four things that you can do if

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you're a company with your cash flow.

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You can reinvest in the business.

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That means more growth.

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So if you're prioritizing the dividend,

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you're probably not going

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to grow that much.

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You can pay down debt.

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That makes your business more secure.

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You're far more likely to go

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bankrupt if you have a lot of debt.

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You can buy back stock.

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This is

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Really the same thing as a dividend,

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except it's much more tax efficient.

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You're going to get a capital gain.

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You can decide when to pay

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that tax on your own rather

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than getting it quarterly

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as the client is getting.

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And the last thing you can

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do is pay a dividend.

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Prioritizing a dividend at

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the expense of these

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matters can lead to worse

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overall performance,

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and that seems to be the case.

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If you look at any

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dividend-oriented fund just

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against the S&P

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I think it's important to

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keep those things in mind.

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So Brian, when you see a company,

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any company that's

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maintaining a high dividend, what,

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what are you thinking?

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Cause they know these choices as well.

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Are you thinking that they,

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what are you thinking?

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I don't want to put words in your mouth.

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Why would a company pay a

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dividend so large when they

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have these other options,

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which fundamentally might

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be better for the health of

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the corporation?

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Well,

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it might be the right thing to pay a

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dividend, right?

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It might be a very mature

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company that isn't going to

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grow very much.

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They don't have a lot of

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options to reinvest in their business.

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They might have a very

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reasonable balance sheet

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where it doesn't make a

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whole lot of sense to pay down more debt.

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They might be buying back stock too.

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Maybe they're doing half and half.

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Maybe they're paying a

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dividend for the certain

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amount and maybe they're

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buying back stock.

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This is another problem

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generally with the dividend yield.

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Sometimes I'll see a company

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is buying back

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twice as much stock as

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they're paying a dividend.

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It looks like the dividend's

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very low when people just ignore it,

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thinking that the

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dividend's not high enough.

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One percent's not nearly enough for me,

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when in reality,

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the return to shareholders

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is more like three,

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three and a half percent

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when you put in the buyback yield.

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Getting back to some of the

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things on how to create cash flow, which

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is oftentimes a problem when

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00:08:05,057 --> 00:08:06,798
people are thinking about dividends.

289
00:08:06,819 --> 00:08:07,660
They like the cash flow, right?

290
00:08:07,879 --> 00:08:09,100
They want to create a new

291
00:08:09,139 --> 00:08:10,341
paycheck and retirement.

292
00:08:11,161 --> 00:08:11,302
Well,

293
00:08:11,362 --> 00:08:12,901
it would have been far better to hold

294
00:08:12,961 --> 00:08:13,843
Google, for example,

295
00:08:14,103 --> 00:08:15,223
which only recently started

296
00:08:15,264 --> 00:08:16,644
paying a dividend over the

297
00:08:16,665 --> 00:08:18,285
last ten years and sell the

298
00:08:18,326 --> 00:08:20,666
shares as needed than to hold Verizon.

299
00:08:20,887 --> 00:08:21,867
You know, over the last ten years,

300
00:08:21,927 --> 00:08:22,747
Google's up five hundred

301
00:08:22,767 --> 00:08:23,728
fifty two percent and

302
00:08:23,769 --> 00:08:24,788
Verizon's only up thirty

303
00:08:24,829 --> 00:08:25,730
seven and a half percent.

304
00:08:25,810 --> 00:08:26,750
And that's total return that

305
00:08:26,769 --> 00:08:27,610
includes dividend.

306
00:08:28,430 --> 00:08:29,752
So you're much better off

307
00:08:29,791 --> 00:08:31,392
holding the stock and

308
00:08:32,414 --> 00:08:33,355
selling some shares as

309
00:08:33,395 --> 00:08:34,336
needed and creating a

310
00:08:34,397 --> 00:08:35,477
paycheck that way rather

311
00:08:35,498 --> 00:08:36,918
than rather than taking the

312
00:08:36,958 --> 00:08:39,280
dividend and my final point

313
00:08:39,341 --> 00:08:40,181
on this before we get into

314
00:08:40,341 --> 00:08:41,682
verizon specifically is if

315
00:08:41,701 --> 00:08:42,702
you really want income and

316
00:08:42,722 --> 00:08:43,604
stability you're probably

317
00:08:43,624 --> 00:08:44,804
better off moving up in the

318
00:08:44,845 --> 00:08:45,605
capital structure and

319
00:08:45,645 --> 00:08:46,586
buying fixed income

320
00:08:46,686 --> 00:08:47,667
especially where rates are

321
00:08:47,687 --> 00:08:49,609
today right so uh this is

322
00:08:49,649 --> 00:08:51,110
going to come into play

323
00:08:51,129 --> 00:08:51,831
when we start thinking

324
00:08:51,850 --> 00:08:53,192
about the value of verizon

325
00:08:53,272 --> 00:08:55,614
but if you just buy the I

326
00:08:55,634 --> 00:08:57,195
shares high yield index for example

327
00:08:57,907 --> 00:08:59,268
It's outperformed Verizon

328
00:08:59,288 --> 00:09:00,229
over the last ten years

329
00:09:00,249 --> 00:09:01,028
while being higher in the

330
00:09:01,068 --> 00:09:01,909
capital structure.

331
00:09:03,510 --> 00:09:04,451
Could you define for our

332
00:09:04,471 --> 00:09:05,351
listeners who may not be

333
00:09:05,392 --> 00:09:06,952
familiar with the term that you're saying,

334
00:09:07,732 --> 00:09:08,533
capital structure,

335
00:09:08,693 --> 00:09:09,934
higher in the capital structure?

336
00:09:10,455 --> 00:09:10,754
Sure.

337
00:09:10,815 --> 00:09:12,076
So the capital structure

338
00:09:12,115 --> 00:09:14,197
means the best way to think

339
00:09:14,217 --> 00:09:15,899
about it is the priority of payments,

340
00:09:15,979 --> 00:09:16,219
right?

341
00:09:16,259 --> 00:09:19,640
So you are contractually

342
00:09:19,721 --> 00:09:21,101
obligated to pay your

343
00:09:21,182 --> 00:09:22,322
interest expense on your debt.

344
00:09:22,842 --> 00:09:24,303
That is something that has to happen.

345
00:09:24,344 --> 00:09:25,043
If you can't do that,

346
00:09:25,083 --> 00:09:26,184
you go bankrupt and the

347
00:09:26,245 --> 00:09:27,285
equity goes to zero.

348
00:09:28,177 --> 00:09:28,857
So that is,

349
00:09:29,139 --> 00:09:31,664
it's much more likely to be paid.

350
00:09:31,705 --> 00:09:32,285
And if it isn't,

351
00:09:32,306 --> 00:09:33,328
then the company's bankrupt

352
00:09:33,649 --> 00:09:34,591
and the equity of the

353
00:09:34,611 --> 00:09:35,995
company isn't worth anything anyways.

354
00:09:37,105 --> 00:09:38,725
So it's a much safer asset

355
00:09:38,865 --> 00:09:39,407
for that reason.

356
00:09:39,447 --> 00:09:42,106
It should be less volatile

357
00:09:42,126 --> 00:09:42,647
for that reason.

358
00:09:42,687 --> 00:09:43,967
And we see that fixed income

359
00:09:44,028 --> 00:09:45,788
is very much less volatile than equity.

360
00:09:47,587 --> 00:09:49,129
And dividends, for example,

361
00:09:49,969 --> 00:09:52,789
they are returns to shareholders,

362
00:09:52,950 --> 00:09:53,690
equity returns.

363
00:09:53,730 --> 00:09:55,210
They are not contractually

364
00:09:55,250 --> 00:09:56,190
obligated to pay that.

365
00:09:56,610 --> 00:09:58,211
So they can just cut it, right?

366
00:09:58,250 --> 00:10:00,431
You can't cut the payment to fixed income.

367
00:10:00,451 --> 00:10:02,072
You can cut the payments to

368
00:10:02,131 --> 00:10:02,711
equity holders.

369
00:10:03,251 --> 00:10:04,173
right it's perfectly fine

370
00:10:04,212 --> 00:10:05,053
perfectly legally you will

371
00:10:05,094 --> 00:10:06,654
not go bankrupt um so

372
00:10:06,855 --> 00:10:08,557
there's much more stability

373
00:10:08,616 --> 00:10:09,778
in buying fixed income and

374
00:10:09,817 --> 00:10:10,759
if the yields are similar

375
00:10:10,798 --> 00:10:12,321
and there's no growth uh

376
00:10:12,400 --> 00:10:13,721
all things equal I I mean I

377
00:10:13,902 --> 00:10:14,923
I would much rather hold

378
00:10:14,942 --> 00:10:15,964
the fixed income instrument

379
00:10:16,384 --> 00:10:17,666
right and to put this to

380
00:10:17,686 --> 00:10:18,706
the extreme example if a

381
00:10:18,726 --> 00:10:19,908
company does go bankrupt

382
00:10:20,427 --> 00:10:21,809
dividends are long gone and

383
00:10:21,850 --> 00:10:23,250
shareholders they're the

384
00:10:23,270 --> 00:10:24,052
shares that they own

385
00:10:24,091 --> 00:10:25,413
they're last on the list of

386
00:10:26,374 --> 00:10:28,355
to be fed right at the bankruptcy table

387
00:10:28,937 --> 00:10:29,157
Right.

388
00:10:29,197 --> 00:10:29,917
And there's a good chance

389
00:10:29,937 --> 00:10:30,336
you're going to get

390
00:10:30,356 --> 00:10:31,658
something back in your fixed income,

391
00:10:31,697 --> 00:10:33,778
especially if it's a secured asset.

392
00:10:34,158 --> 00:10:35,097
Senior secured assets

393
00:10:35,798 --> 00:10:36,818
generally return about

394
00:10:36,859 --> 00:10:37,479
eighty percent of the

395
00:10:37,519 --> 00:10:38,519
capital in bankruptcy.

396
00:10:39,099 --> 00:10:40,818
So they're much they're much more stable,

397
00:10:41,558 --> 00:10:42,799
much more reasonable assets

398
00:10:42,820 --> 00:10:43,600
to hold if you're looking

399
00:10:43,639 --> 00:10:45,960
for quote unquote income.

400
00:10:46,600 --> 00:10:49,561
OK, let's dig into Verizon itself now.

401
00:10:50,181 --> 00:10:50,780
What we're going to talk

402
00:10:50,801 --> 00:10:51,321
about isn't a

403
00:10:51,360 --> 00:10:52,782
recommendation to buy a stock.

404
00:10:52,802 --> 00:10:54,402
It's not a recommendation to sell a stock.

405
00:10:54,889 --> 00:10:56,089
We're giving Brian's

406
00:10:56,129 --> 00:10:57,350
thoughts on the question

407
00:10:57,370 --> 00:10:58,549
that this particular client

408
00:10:58,570 --> 00:11:00,289
make and past performance

409
00:11:00,331 --> 00:11:01,490
is certainly not any

410
00:11:02,051 --> 00:11:04,711
predictor of future results.

411
00:11:04,831 --> 00:11:05,111
Right.

412
00:11:05,331 --> 00:11:06,312
So that's important.

413
00:11:07,732 --> 00:11:11,092
And despite everything I just said, rarely,

414
00:11:11,173 --> 00:11:11,813
but sometimes,

415
00:11:12,754 --> 00:11:13,913
a high dividend yield can

416
00:11:13,933 --> 00:11:15,034
represent an overlooked stock.

417
00:11:16,075 --> 00:11:17,774
I think it's important to say it's rare,

418
00:11:18,735 --> 00:11:19,936
but sometimes it happens.

419
00:11:20,791 --> 00:11:21,471
It's worth looking,

420
00:11:21,532 --> 00:11:24,094
especially if it's a mature,

421
00:11:24,195 --> 00:11:28,038
well-known company with few competitors.

422
00:11:28,798 --> 00:11:30,941
Oftentimes, it's just overlooked.

423
00:11:31,442 --> 00:11:33,423
Could just be a money machine, right?

424
00:11:33,484 --> 00:11:35,086
Not popular in the current

425
00:11:36,027 --> 00:11:38,308
stock market popularity contest.

426
00:11:39,409 --> 00:11:41,011
It's rare, but it happens.

427
00:11:41,231 --> 00:11:41,993
When it does happen,

428
00:11:42,533 --> 00:11:43,594
I love to take advantage of it.

429
00:11:44,934 --> 00:11:45,495
That being said,

430
00:11:45,534 --> 00:11:47,515
we do own Verizon for

431
00:11:48,277 --> 00:11:49,517
clients that we manage

432
00:11:49,817 --> 00:11:50,378
money for on a

433
00:11:50,418 --> 00:11:52,058
discretionary basis for

434
00:11:52,099 --> 00:11:54,220
individual stocks.

435
00:11:54,240 --> 00:11:55,080
So let's get in the why.

436
00:11:55,100 --> 00:11:56,360
The dividend of six point

437
00:11:56,380 --> 00:11:58,442
four six percent is five

438
00:11:58,481 --> 00:11:59,942
times higher than the overall market.

439
00:11:59,981 --> 00:12:00,982
So it's not even close.

440
00:12:01,082 --> 00:12:03,403
This is much, much,

441
00:12:03,583 --> 00:12:05,664
much higher than the S&P five hundred,

442
00:12:05,705 --> 00:12:06,225
for example.

443
00:12:06,285 --> 00:12:08,606
So that is an indication

444
00:12:08,807 --> 00:12:10,988
that if it can pay the dividend, it is.

445
00:12:11,917 --> 00:12:14,238
probably very cheap and has

446
00:12:14,278 --> 00:12:16,118
the opportunity for capital

447
00:12:16,158 --> 00:12:18,038
gains going forward because

448
00:12:18,078 --> 00:12:19,759
it's very cheap the

449
00:12:19,779 --> 00:12:20,840
dividend is very well

450
00:12:20,899 --> 00:12:22,139
covered by the cash flow so

451
00:12:22,159 --> 00:12:23,240
the free cash flow runs

452
00:12:23,441 --> 00:12:24,721
about three and three to

453
00:12:24,821 --> 00:12:25,902
five billion dollars a

454
00:12:25,961 --> 00:12:27,381
quarter while the dividend

455
00:12:27,422 --> 00:12:28,462
is two point eight billion

456
00:12:28,602 --> 00:12:29,482
so you can see that three

457
00:12:29,503 --> 00:12:31,543
to five billion is higher

458
00:12:31,624 --> 00:12:32,604
than the two point eight

459
00:12:32,644 --> 00:12:35,044
billion uh so you know

460
00:12:35,085 --> 00:12:36,424
there's it can reasonably

461
00:12:36,705 --> 00:12:37,385
you know pay the div

462
00:12:37,485 --> 00:12:38,446
continue to pay the dividend

463
00:12:39,474 --> 00:12:40,794
If interest rates come down,

464
00:12:40,855 --> 00:12:42,716
particularly long rates or

465
00:12:42,916 --> 00:12:44,397
spreads continue to tighten.

466
00:12:44,517 --> 00:12:45,177
And by spreads,

467
00:12:45,256 --> 00:12:46,378
I mean the difference

468
00:12:46,418 --> 00:12:47,759
between a high yield

469
00:12:47,778 --> 00:12:50,340
instrument and a treasury instrument.

470
00:12:50,740 --> 00:12:52,860
If that difference continues to come in,

471
00:12:53,481 --> 00:12:54,962
I would expect decent price

472
00:12:55,003 --> 00:12:57,744
movement in this company to

473
00:12:57,764 --> 00:12:59,985
accompany the dividend, which is great.

474
00:13:00,085 --> 00:13:00,365
Right.

475
00:13:00,405 --> 00:13:01,966
So I'll give you an example.

476
00:13:02,147 --> 00:13:04,388
We initiated the position

477
00:13:05,849 --> 00:13:07,308
much lower than the stock

478
00:13:07,328 --> 00:13:08,129
currently is now.

479
00:13:09,116 --> 00:13:09,777
which is great.

480
00:13:09,937 --> 00:13:11,957
And the expectation was that

481
00:13:12,077 --> 00:13:13,177
as interest rates came down,

482
00:13:13,197 --> 00:13:14,578
I would get price appreciation.

483
00:13:14,759 --> 00:13:15,198
Now,

484
00:13:15,999 --> 00:13:17,458
you might get the sense that I'm not

485
00:13:17,479 --> 00:13:19,139
planning on being in this stock forever.

486
00:13:19,940 --> 00:13:21,941
And that makes sense.

487
00:13:22,020 --> 00:13:25,341
I have a thesis that it's underappreciated,

488
00:13:25,441 --> 00:13:26,442
partly because it's viewed

489
00:13:26,522 --> 00:13:29,363
as somewhat of a fixed

490
00:13:29,423 --> 00:13:31,283
income type instrument and

491
00:13:31,302 --> 00:13:32,482
that as rates come down,

492
00:13:32,503 --> 00:13:33,504
the price will appreciate

493
00:13:33,604 --> 00:13:34,563
as the price appreciates.

494
00:13:35,366 --> 00:13:36,548
I likely won't want to be in

495
00:13:36,587 --> 00:13:41,510
this stock further as we

496
00:13:41,551 --> 00:13:42,871
realize that price appreciations.

497
00:13:43,873 --> 00:13:44,932
Now, all that's good, right?

498
00:13:44,993 --> 00:13:47,215
But there's real concerns about the stock.

499
00:13:48,788 --> 00:13:49,649
don't think it's an obvious

500
00:13:49,690 --> 00:13:53,051
hold um I I would say that

501
00:13:53,211 --> 00:13:54,751
I am looking at this as a

502
00:13:54,932 --> 00:13:57,072
as a source of funds if I

503
00:13:57,133 --> 00:13:58,453
find a better opportunity

504
00:13:58,494 --> 00:14:00,235
right now I mentioned that

505
00:14:00,274 --> 00:14:01,514
we bought it lower we've

506
00:14:01,534 --> 00:14:03,015
had some appreciation we've

507
00:14:03,076 --> 00:14:03,996
owned it for a little over

508
00:14:04,017 --> 00:14:05,616
a year and a half um I've

509
00:14:05,657 --> 00:14:06,677
been I've been happy with

510
00:14:06,697 --> 00:14:08,599
it so far uh it's not like

511
00:14:08,658 --> 00:14:09,519
I have an itchy trigger

512
00:14:09,538 --> 00:14:11,320
finger on it but if I find

513
00:14:11,519 --> 00:14:12,500
something that is

514
00:14:12,561 --> 00:14:13,500
consistent and going to

515
00:14:13,520 --> 00:14:14,861
grow for a long period of time

516
00:14:15,442 --> 00:14:16,982
this might be a way that I

517
00:14:17,043 --> 00:14:18,524
fund that new purchase.

518
00:14:19,105 --> 00:14:20,826
So I don't think it's an obvious hold.

519
00:14:21,285 --> 00:14:22,726
The growth is flat to negative,

520
00:14:23,768 --> 00:14:24,807
which is unsurprising, right?

521
00:14:24,868 --> 00:14:25,729
It pays a high dividend,

522
00:14:26,089 --> 00:14:27,570
not reinvesting in the business as much.

523
00:14:28,431 --> 00:14:30,491
So it's not growing as much.

524
00:14:30,532 --> 00:14:31,511
So any price appreciation

525
00:14:31,532 --> 00:14:32,373
would have to come from

526
00:14:32,413 --> 00:14:33,374
that change in rates,

527
00:14:34,214 --> 00:14:35,335
or they would have to cut

528
00:14:35,375 --> 00:14:36,875
costs pretty dramatically

529
00:14:36,916 --> 00:14:37,856
to grow the bottom line.

530
00:14:38,336 --> 00:14:39,136
Cutting costs would

531
00:14:39,157 --> 00:14:40,097
presumably make them less

532
00:14:40,118 --> 00:14:41,058
competitive in the future.

533
00:14:41,438 --> 00:14:42,639
This is an important point,

534
00:14:43,039 --> 00:14:43,960
especially since...

535
00:14:45,586 --> 00:14:46,886
sprint and t-mobile merged

536
00:14:47,287 --> 00:14:49,548
to be to be a very

537
00:14:49,688 --> 00:14:51,789
competitive uh third

538
00:14:52,070 --> 00:14:54,250
provider of of cell service

539
00:14:56,293 --> 00:14:57,232
uh in this country right

540
00:14:57,273 --> 00:14:58,274
there's really the big

541
00:14:58,293 --> 00:14:59,134
three there's t-mobile

542
00:14:59,534 --> 00:15:00,875
there's at&t and verizon

543
00:15:01,176 --> 00:15:02,115
before the merger that was

544
00:15:02,176 --> 00:15:04,977
really at&t and verizon now

545
00:15:04,998 --> 00:15:06,298
there's a there's a much

546
00:15:06,339 --> 00:15:07,960
more bigger competitive threat

547
00:15:08,460 --> 00:15:09,600
There's a lot of evidence

548
00:15:10,100 --> 00:15:10,961
throughout the history of

549
00:15:10,980 --> 00:15:12,581
the stock market that a

550
00:15:12,621 --> 00:15:15,363
duopoly is great and you

551
00:15:15,403 --> 00:15:17,224
add a third competitor and

552
00:15:17,283 --> 00:15:19,004
things start to get a lot

553
00:15:19,065 --> 00:15:20,946
hairier for these stocks.

554
00:15:21,926 --> 00:15:23,427
Now, there's a lot of debt on the business,

555
00:15:23,486 --> 00:15:23,687
right?

556
00:15:23,767 --> 00:15:24,847
I said that we could pay

557
00:15:24,888 --> 00:15:26,749
down debt and make the

558
00:15:26,788 --> 00:15:27,708
company more secure.

559
00:15:27,769 --> 00:15:29,110
This company has a lot of

560
00:15:29,149 --> 00:15:29,970
debt on the business.

561
00:15:30,049 --> 00:15:31,311
This company has more debt

562
00:15:31,331 --> 00:15:32,471
on the business than AT&T

563
00:15:32,490 --> 00:15:33,792
does to your prior point, right?

564
00:15:35,352 --> 00:15:36,793
With a lot of it coming due in the next

565
00:15:38,640 --> 00:15:39,240
What does that mean?

566
00:15:40,221 --> 00:15:40,422
Well,

567
00:15:40,461 --> 00:15:41,283
it doesn't mean that they're not

568
00:15:41,302 --> 00:15:42,302
going to be able to pay it.

569
00:15:42,323 --> 00:15:43,183
They have about twenty

570
00:15:43,224 --> 00:15:44,625
billion coming in the next twelve months.

571
00:15:45,184 --> 00:15:46,485
I mentioned that they only

572
00:15:46,546 --> 00:15:48,307
have three to five billion

573
00:15:48,467 --> 00:15:51,830
in cash flow per year.

574
00:15:52,833 --> 00:15:55,056
So they're going to have to

575
00:15:55,155 --> 00:15:56,716
refinance the debt similar

576
00:15:56,736 --> 00:15:58,038
to how you would refinance a house.

577
00:15:58,058 --> 00:15:58,759
They're not going to pay

578
00:15:58,778 --> 00:15:59,580
down the principal

579
00:15:59,620 --> 00:16:01,020
completely with their cash flow.

580
00:16:01,761 --> 00:16:02,743
What they're going to do is

581
00:16:02,982 --> 00:16:05,125
finance that money with

582
00:16:05,504 --> 00:16:07,386
higher yielding debt than

583
00:16:07,407 --> 00:16:08,447
they currently have just

584
00:16:08,466 --> 00:16:09,567
because rates have gone higher.

585
00:16:09,587 --> 00:16:11,250
They are an investment grade company.

586
00:16:12,150 --> 00:16:13,972
I don't expect this to be a problem.

587
00:16:14,913 --> 00:16:16,296
But you can see that over

588
00:16:16,336 --> 00:16:17,096
the last few years,

589
00:16:17,177 --> 00:16:18,197
as rates have gone higher,

590
00:16:18,298 --> 00:16:19,500
this has eaten into their

591
00:16:20,822 --> 00:16:22,263
net income as interest

592
00:16:22,303 --> 00:16:23,105
rates have moved higher.

593
00:16:23,125 --> 00:16:24,767
So that's another reason to

594
00:16:24,787 --> 00:16:25,508
be concerned about the

595
00:16:25,528 --> 00:16:26,268
future of this company.

596
00:16:26,708 --> 00:16:28,091
If we're already growing at

597
00:16:28,130 --> 00:16:28,991
flat to negative,

598
00:16:29,192 --> 00:16:30,514
this can only be a bad thing.

599
00:16:31,124 --> 00:16:32,124
And aren't they making a big

600
00:16:32,203 --> 00:16:33,524
acquisition soon?

601
00:16:33,565 --> 00:16:33,945
They are.

602
00:16:34,044 --> 00:16:35,725
They're buying Frontier Communications.

603
00:16:35,765 --> 00:16:36,725
This is going to be my next

604
00:16:36,765 --> 00:16:38,346
point for twenty billion

605
00:16:38,386 --> 00:16:39,447
dollars in alt cash.

606
00:16:40,148 --> 00:16:41,288
So the transaction will need

607
00:16:41,327 --> 00:16:42,229
even more financing.

608
00:16:43,089 --> 00:16:44,250
Most acquisitions turn out

609
00:16:44,289 --> 00:16:45,009
to be a bad idea.

610
00:16:46,921 --> 00:16:48,783
I do not know enough about

611
00:16:48,844 --> 00:16:49,985
frontier communications and

612
00:16:50,005 --> 00:16:51,288
Verizon's business to make

613
00:16:51,327 --> 00:16:52,509
a judgment on whether or

614
00:16:52,549 --> 00:16:53,892
not it's going to be a bad idea.

615
00:16:54,292 --> 00:16:56,054
But I do know that about

616
00:16:56,095 --> 00:16:57,056
seventy five percent of

617
00:16:57,136 --> 00:16:58,337
acquisitions end up being

618
00:16:59,120 --> 00:17:00,841
poor acquisitions.

619
00:17:00,902 --> 00:17:01,082
So.

620
00:17:02,716 --> 00:17:02,937
You know,

621
00:17:03,177 --> 00:17:04,898
I wouldn't bet on a two fifty

622
00:17:04,939 --> 00:17:05,959
hitter getting a hit when

623
00:17:05,999 --> 00:17:06,940
he comes up to the plate.

624
00:17:07,840 --> 00:17:08,681
And, you know,

625
00:17:08,701 --> 00:17:09,902
that seems to be the odds

626
00:17:09,922 --> 00:17:11,403
that I'm handed here.

627
00:17:11,683 --> 00:17:14,425
You know, and moreover,

628
00:17:14,486 --> 00:17:15,445
I know for I know for a

629
00:17:15,487 --> 00:17:16,567
fact that my my interest

630
00:17:16,606 --> 00:17:17,988
costs are going to are going to go up.

631
00:17:18,028 --> 00:17:19,609
So the bottom line is, you know,

632
00:17:19,650 --> 00:17:20,670
I've held the stock for a

633
00:17:20,710 --> 00:17:21,211
year and a half.

634
00:17:21,371 --> 00:17:22,592
For me, that's not a long time.

635
00:17:23,451 --> 00:17:24,553
uh and done fine with it uh

636
00:17:25,272 --> 00:17:26,292
but it would likely be a

637
00:17:26,353 --> 00:17:27,273
source of funds because it

638
00:17:27,314 --> 00:17:28,253
does have some hair on it

639
00:17:28,513 --> 00:17:29,535
uh the dividend seems safe

640
00:17:29,555 --> 00:17:30,414
for now but there's a lot

641
00:17:30,434 --> 00:17:31,955
of debt in the business um

642
00:17:32,056 --> 00:17:33,115
and we're hoping to benefit

643
00:17:33,355 --> 00:17:34,336
more from lower interest

644
00:17:34,376 --> 00:17:36,978
rates which seem less

645
00:17:37,038 --> 00:17:39,538
likely now than they seemed

646
00:17:39,558 --> 00:17:41,659
uh you know uh probably a

647
00:17:41,759 --> 00:17:44,780
year ago to me so um we've

648
00:17:44,820 --> 00:17:46,500
done well in it uh I'm

649
00:17:46,540 --> 00:17:48,221
happy about that uh

650
00:17:48,680 --> 00:17:50,122
There is some hair on the stock.

651
00:17:50,821 --> 00:17:52,683
If interest rates continue to move lower,

652
00:17:53,365 --> 00:17:55,047
that would be very good for the stock,

653
00:17:55,086 --> 00:17:56,107
but I think that's less

654
00:17:56,167 --> 00:17:57,269
likely to happen than it

655
00:17:57,288 --> 00:17:58,190
has in the last year.

656
00:17:59,290 --> 00:18:02,394
We see spreads at historic tights.

657
00:18:02,615 --> 00:18:03,095
We see

658
00:18:04,263 --> 00:18:04,463
you know,

659
00:18:04,503 --> 00:18:06,625
inflation expected to move higher

660
00:18:06,664 --> 00:18:08,005
now in twenty twenty five,

661
00:18:08,105 --> 00:18:09,846
at least by a little bit.

662
00:18:10,526 --> 00:18:11,606
And those things are not

663
00:18:11,646 --> 00:18:13,007
good for the downward

664
00:18:13,027 --> 00:18:14,047
trajectory of interest rates.

665
00:18:14,367 --> 00:18:16,367
So the reasons why we like

666
00:18:16,807 --> 00:18:17,828
the stock in the first

667
00:18:17,868 --> 00:18:19,949
place are largely going away.

668
00:18:20,470 --> 00:18:21,849
And there's been some price appreciation,

669
00:18:21,890 --> 00:18:22,849
price appreciation.

670
00:18:23,351 --> 00:18:25,171
So the stock's fine.

671
00:18:25,570 --> 00:18:26,152
I don't love it.

672
00:18:26,932 --> 00:18:27,971
I wouldn't own it just for the dividend.

673
00:18:27,991 --> 00:18:28,132
Yeah.

674
00:18:29,192 --> 00:18:30,113
And just kind of a side

675
00:18:30,153 --> 00:18:31,032
comment here about

676
00:18:31,073 --> 00:18:33,034
financial planning principles generally.

677
00:18:33,786 --> 00:18:36,467
we attempt to discourage individuals,

678
00:18:36,507 --> 00:18:37,446
clients who have a

679
00:18:37,567 --> 00:18:38,787
concentrated holding in a

680
00:18:38,946 --> 00:18:41,667
single holding and for, you know,

681
00:18:41,688 --> 00:18:43,288
it depends on the size of their assets,

682
00:18:43,307 --> 00:18:44,449
depends on their net worth

683
00:18:44,489 --> 00:18:45,528
and how it fits into their

684
00:18:45,548 --> 00:18:46,568
whole financial plan.

685
00:18:47,108 --> 00:18:48,410
But generally we don't like

686
00:18:48,450 --> 00:18:50,049
to have our clients have a

687
00:18:50,109 --> 00:18:51,390
single holding represent

688
00:18:51,430 --> 00:18:53,971
more than five percent, for example,

689
00:18:54,290 --> 00:18:55,611
of their entire portfolio.

690
00:18:55,672 --> 00:18:56,811
And so, you know,

691
00:18:56,832 --> 00:18:58,011
that's an individual situation.

692
00:18:58,031 --> 00:18:58,731
We're not going to get into

693
00:18:58,771 --> 00:19:00,032
the details of this client,

694
00:19:00,573 --> 00:19:01,333
but if it's a,

695
00:19:02,726 --> 00:19:03,946
If you acquire a lot of stock,

696
00:19:03,987 --> 00:19:05,127
like in this case,

697
00:19:05,347 --> 00:19:06,407
this individual did while

698
00:19:06,428 --> 00:19:06,929
they're working.

699
00:19:06,969 --> 00:19:08,148
And so it's normal that

700
00:19:08,189 --> 00:19:09,789
clients and prospects come

701
00:19:09,809 --> 00:19:11,510
to us and they're retiring

702
00:19:11,530 --> 00:19:12,991
and they have a less company stock.

703
00:19:13,031 --> 00:19:14,452
And one of the common things

704
00:19:14,472 --> 00:19:15,713
that we discuss with them is,

705
00:19:15,854 --> 00:19:19,135
is it prudent to have all of the stock,

706
00:19:19,415 --> 00:19:20,576
all this value,

707
00:19:20,616 --> 00:19:22,336
all these assets in one holding,

708
00:19:22,397 --> 00:19:23,317
even if you love it,

709
00:19:23,478 --> 00:19:24,798
even if you don't have any

710
00:19:24,838 --> 00:19:25,618
concerns about it,

711
00:19:25,638 --> 00:19:27,820
maybe you worked in the industry forever.

712
00:19:27,840 --> 00:19:28,740
You're confident in the

713
00:19:28,780 --> 00:19:30,061
trajectory of this company.

714
00:19:30,753 --> 00:19:32,234
It's not prudent for the

715
00:19:32,275 --> 00:19:32,875
principles of

716
00:19:32,894 --> 00:19:35,615
diversification to have so

717
00:19:35,695 --> 00:19:37,057
much of your assets

718
00:19:37,096 --> 00:19:38,116
invested in one company.

719
00:19:38,157 --> 00:19:40,278
The risk is just too great.

720
00:19:40,338 --> 00:19:40,538
Russ,

721
00:19:40,558 --> 00:19:41,659
you probably see that with some

722
00:19:41,679 --> 00:19:42,318
people that you've been

723
00:19:42,338 --> 00:19:43,440
talking to where they have

724
00:19:43,460 --> 00:19:45,540
a concentrated holding and

725
00:19:45,941 --> 00:19:47,642
the advice that we typically give them.

726
00:19:48,628 --> 00:19:49,088
Definitely.

727
00:19:49,189 --> 00:19:50,390
I think that's been a

728
00:19:50,430 --> 00:19:51,310
conversation I've been

729
00:19:51,330 --> 00:19:52,352
having a lot recently.

730
00:19:52,551 --> 00:19:52,912
Also,

731
00:19:52,971 --> 00:19:54,192
we talked about it on our recent

732
00:19:54,773 --> 00:19:55,594
podcast episode,

733
00:19:56,575 --> 00:19:57,915
some of the risks of having

734
00:19:58,236 --> 00:20:00,238
too much in one specific stock.

735
00:20:00,258 --> 00:20:02,679
But it's also one stock,

736
00:20:02,699 --> 00:20:04,260
but also a specific sector.

737
00:20:04,540 --> 00:20:06,662
So it could be a lot of

738
00:20:07,482 --> 00:20:08,203
different companies,

739
00:20:08,243 --> 00:20:08,804
but they're all

740
00:20:08,923 --> 00:20:10,786
concentrated in one specific group,

741
00:20:10,925 --> 00:20:13,446
maybe a telecom, maybe technology.

742
00:20:13,548 --> 00:20:13,887
Obviously,

743
00:20:13,928 --> 00:20:14,989
technology has done really well.

744
00:20:15,782 --> 00:20:18,045
uh, recently, but maybe, maybe Brian,

745
00:20:18,065 --> 00:20:19,365
you have any thoughts on, um,

746
00:20:19,846 --> 00:20:21,407
sector diversification and

747
00:20:21,548 --> 00:20:22,528
maybe certain limits that

748
00:20:22,548 --> 00:20:23,650
you'd want to cap yourself

749
00:20:23,730 --> 00:20:24,711
at if you're looking at one

750
00:20:24,750 --> 00:20:25,592
specific industry.

751
00:20:27,973 --> 00:20:28,673
Well, I,

752
00:20:28,753 --> 00:20:29,434
I don't want to talk about

753
00:20:29,454 --> 00:20:30,915
specific capsule limits because I,

754
00:20:31,076 --> 00:20:33,137
I don't like to talk about hard rules,

755
00:20:33,198 --> 00:20:34,578
but I will say that I,

756
00:20:34,598 --> 00:20:35,759
I see this mistake a lot.

757
00:20:36,361 --> 00:20:36,461
Um,

758
00:20:37,344 --> 00:20:38,545
I see people hold Verizon

759
00:20:39,065 --> 00:20:40,987
and TNT and T-Mobile,

760
00:20:41,207 --> 00:20:42,607
and they think they're diversified.

761
00:20:42,748 --> 00:20:43,749
You know, when you add them up,

762
00:20:44,250 --> 00:20:45,109
it's a very significant

763
00:20:45,130 --> 00:20:46,070
amount of a portfolio.

764
00:20:46,431 --> 00:20:47,832
I see people on Verizon and

765
00:20:47,872 --> 00:20:48,673
MasterCard a lot.

766
00:20:48,692 --> 00:20:50,334
It's essentially the same business.

767
00:20:51,275 --> 00:20:52,455
You know, you can see,

768
00:20:52,556 --> 00:20:53,436
especially these days,

769
00:20:53,457 --> 00:20:55,597
you can see a lot of Nvidia, a lot of AMD,

770
00:20:56,378 --> 00:20:57,200
and then they'll have a

771
00:20:57,240 --> 00:20:58,361
semiconductor ETF.

772
00:20:59,340 --> 00:21:01,303
And, you know,

773
00:21:01,482 --> 00:21:02,324
what I like to call it is

774
00:21:02,364 --> 00:21:03,765
the illusion of diversification.

775
00:21:04,508 --> 00:21:05,509
But sometimes you'll see

776
00:21:05,528 --> 00:21:08,049
people with three or four dividend ETFs.

777
00:21:08,309 --> 00:21:09,851
And when you look into the top holdings,

778
00:21:09,891 --> 00:21:10,770
they're all the same company.

779
00:21:10,790 --> 00:21:12,251
So, you know,

780
00:21:12,451 --> 00:21:13,633
I call it the illusion of

781
00:21:13,673 --> 00:21:14,373
diversification.

782
00:21:14,413 --> 00:21:16,334
It's not you're not really diversified.

783
00:21:16,374 --> 00:21:17,355
It just looks like you are

784
00:21:17,375 --> 00:21:18,394
because you have four tickers.

785
00:21:19,195 --> 00:21:20,336
But you're very concentrated

786
00:21:20,396 --> 00:21:23,698
in a sector or a type of investment.

787
00:21:25,219 --> 00:21:27,079
And when that goes out of

788
00:21:27,119 --> 00:21:29,240
favor for one reason or another, you know,

789
00:21:29,441 --> 00:21:30,241
you're going to feel it

790
00:21:30,781 --> 00:21:32,442
more than you probably expect.

791
00:21:33,253 --> 00:21:34,094
Oh, thank you.

792
00:21:34,173 --> 00:21:34,654
Thank you, Brian,

793
00:21:34,674 --> 00:21:35,615
for your comments on that one.

794
00:21:35,634 --> 00:21:36,976
Let's go dig into the

795
00:21:37,016 --> 00:21:39,876
mailbag and ask the next question.

796
00:21:39,977 --> 00:21:41,616
So this is a couple who are

797
00:21:41,636 --> 00:21:43,097
in their forties and

798
00:21:43,117 --> 00:21:44,398
they're saving for retirement.

799
00:21:44,459 --> 00:21:46,138
Like most people,

800
00:21:46,419 --> 00:21:47,799
they're using their four or one case,

801
00:21:47,819 --> 00:21:48,700
which is real common.

802
00:21:49,121 --> 00:21:50,260
Their risk tolerance is high.

803
00:21:50,300 --> 00:21:52,662
They're very tolerant of taking risks.

804
00:21:52,682 --> 00:21:53,501
They know they get a long

805
00:21:53,561 --> 00:21:55,383
runway here and they don't

806
00:21:55,423 --> 00:21:56,423
expect to use these funds

807
00:21:56,463 --> 00:21:57,324
until they retire.

808
00:21:58,463 --> 00:21:59,865
They have four or one K

809
00:21:59,904 --> 00:22:01,586
funds in a model portfolio.

810
00:22:02,594 --> 00:22:04,556
one of their choices and it

811
00:22:04,596 --> 00:22:05,916
has twenty five percent

812
00:22:07,578 --> 00:22:09,140
exposure to international

813
00:22:09,200 --> 00:22:11,362
stock funds so they were

814
00:22:11,402 --> 00:22:12,242
digging in they were doing

815
00:22:12,262 --> 00:22:13,304
their research which I love

816
00:22:13,344 --> 00:22:14,684
to love to hear that people

817
00:22:14,704 --> 00:22:15,806
are looking at what's

818
00:22:15,846 --> 00:22:17,847
inside of these funds and

819
00:22:17,887 --> 00:22:18,929
they believe that they

820
00:22:18,969 --> 00:22:20,069
found that the return on

821
00:22:20,109 --> 00:22:22,172
international stock funds

822
00:22:22,291 --> 00:22:24,314
has lagged the US stock

823
00:22:24,354 --> 00:22:26,796
funds for a long time and they're asking

824
00:22:27,385 --> 00:22:28,747
They understand diversification,

825
00:22:28,826 --> 00:22:29,847
what we were just talking about,

826
00:22:30,307 --> 00:22:31,048
in this case being

827
00:22:31,108 --> 00:22:31,949
diversified to

828
00:22:32,029 --> 00:22:34,050
international investing as well.

829
00:22:35,011 --> 00:22:35,751
But they're asking,

830
00:22:35,771 --> 00:22:37,653
should they continue to

831
00:22:37,693 --> 00:22:38,615
keep a portion of their

832
00:22:38,654 --> 00:22:39,694
funds in their retirement

833
00:22:39,714 --> 00:22:40,855
account exposed to

834
00:22:41,016 --> 00:22:42,136
international equities

835
00:22:43,038 --> 00:22:45,380
after a period of long underperformance?

836
00:22:45,720 --> 00:22:47,040
And if so, why?

837
00:22:47,080 --> 00:22:48,481
And if not, why not?

838
00:22:50,564 --> 00:22:51,904
It's a great question and

839
00:22:52,265 --> 00:22:55,146
one that I ask myself all the time,

840
00:22:55,166 --> 00:22:55,567
honestly.

841
00:22:57,576 --> 00:22:58,657
I wrote down some thoughts

842
00:22:58,837 --> 00:23:00,979
for the pro all US argument

843
00:23:01,298 --> 00:23:02,460
and the pro international

844
00:23:02,480 --> 00:23:03,599
diversification argument.

845
00:23:04,140 --> 00:23:05,621
And then I'll tell you how I

846
00:23:05,681 --> 00:23:06,862
personally treat it and how

847
00:23:06,902 --> 00:23:09,063
we treat it from the vast

848
00:23:09,083 --> 00:23:11,163
majority of our clients.

849
00:23:11,183 --> 00:23:12,284
So the pro all US,

850
00:23:13,085 --> 00:23:14,546
this particular couple is correct.

851
00:23:14,865 --> 00:23:16,886
UF stocks have done much

852
00:23:16,926 --> 00:23:17,926
better than international

853
00:23:17,946 --> 00:23:19,488
stocks over a significant period of time.

854
00:23:19,968 --> 00:23:21,648
For this analysis, I looked back

855
00:23:22,957 --> 00:23:24,397
I believe it was a ten-year period,

856
00:23:24,498 --> 00:23:25,278
and I think there was a

857
00:23:25,358 --> 00:23:26,599
thirteen percent return on

858
00:23:26,640 --> 00:23:29,122
the S&P five hundred and the MSCI,

859
00:23:29,843 --> 00:23:30,962
All Country World Index,

860
00:23:31,243 --> 00:23:33,545
ex-US was up maybe just

861
00:23:33,605 --> 00:23:34,385
over four percent.

862
00:23:34,425 --> 00:23:36,146
So there was a big,

863
00:23:36,288 --> 00:23:37,508
big difference between

864
00:23:37,608 --> 00:23:39,710
international and US over

865
00:23:39,730 --> 00:23:40,351
the last decade.

866
00:23:40,391 --> 00:23:40,851
And, you know,

867
00:23:40,891 --> 00:23:41,892
ten years to me is not a

868
00:23:41,932 --> 00:23:42,752
short period of time.

869
00:23:43,432 --> 00:23:44,513
I'm constantly preaching

870
00:23:44,733 --> 00:23:45,775
this thing for the long term.

871
00:23:46,494 --> 00:23:48,096
And most people incorrectly,

872
00:23:48,297 --> 00:23:49,597
when I say that, think, you know,

873
00:23:50,097 --> 00:23:52,040
three months to two years is a long time,

874
00:23:52,080 --> 00:23:54,505
but no, I'm thinking much more than that.

875
00:23:54,585 --> 00:23:56,047
And this couple seems to be

876
00:23:56,468 --> 00:23:57,470
on the right page, right?

877
00:23:57,529 --> 00:23:58,811
They're thinking over twenty years,

878
00:23:58,852 --> 00:24:00,934
they're looking back over ten years.

879
00:24:02,056 --> 00:24:02,297
You know,

880
00:24:02,416 --> 00:24:04,259
it's really hard when you look at

881
00:24:04,299 --> 00:24:05,422
this past data and say,

882
00:24:07,402 --> 00:24:08,603
It makes sense to invest

883
00:24:08,643 --> 00:24:10,044
internationally when you

884
00:24:10,064 --> 00:24:12,967
look at the performance data.

885
00:24:13,047 --> 00:24:13,467
In addition,

886
00:24:13,487 --> 00:24:14,428
there's a really good argument

887
00:24:14,448 --> 00:24:15,388
that large cap domestic

888
00:24:15,409 --> 00:24:16,388
stocks generate enough

889
00:24:16,429 --> 00:24:18,431
revenue from international

890
00:24:19,372 --> 00:24:20,192
countries where it's

891
00:24:20,272 --> 00:24:21,452
unnecessary to further

892
00:24:21,493 --> 00:24:23,315
diversify into those markets.

893
00:24:23,734 --> 00:24:24,996
This was a popular stance

894
00:24:25,036 --> 00:24:26,897
from Vanguard's John Bogle

895
00:24:27,077 --> 00:24:27,657
before he died.

896
00:24:29,138 --> 00:24:30,799
You know, the other thing is U.S.

897
00:24:30,819 --> 00:24:32,680
has a relatively attractive demographics,

898
00:24:33,099 --> 00:24:33,680
at least now,

899
00:24:34,421 --> 00:24:35,121
compared to the rest of the

900
00:24:35,141 --> 00:24:38,061
world because of the

901
00:24:39,041 --> 00:24:40,582
increase in immigration that we've had.

902
00:24:40,602 --> 00:24:41,782
We have generally younger

903
00:24:41,823 --> 00:24:43,682
demographics than a lot of

904
00:24:43,702 --> 00:24:44,623
the developed world,

905
00:24:44,942 --> 00:24:46,364
and especially that of

906
00:24:46,403 --> 00:24:47,104
something like China.

907
00:24:48,315 --> 00:24:48,855
So, you know,

908
00:24:48,875 --> 00:24:50,695
that's the argument for all U.S.

909
00:24:50,836 --> 00:24:51,936
And I think it's a strong one.

910
00:24:52,916 --> 00:24:54,077
So I'm going to make the

911
00:24:54,178 --> 00:24:55,877
argument for international

912
00:24:55,897 --> 00:24:56,818
diversification.

913
00:24:56,838 --> 00:24:57,118
Brian,

914
00:24:57,159 --> 00:24:59,500
I want you to dig into that a little

915
00:24:59,519 --> 00:25:02,181
bit more about Vanguard's posture.

916
00:25:02,340 --> 00:25:02,881
And, you know,

917
00:25:03,000 --> 00:25:04,041
you've shared it with before.

918
00:25:04,082 --> 00:25:05,021
But for people who haven't

919
00:25:05,061 --> 00:25:05,721
heard you before,

920
00:25:06,663 --> 00:25:08,762
why are you saying that a

921
00:25:08,782 --> 00:25:10,503
positive for all U.S.

922
00:25:11,684 --> 00:25:12,684
already kind of gives you

923
00:25:12,724 --> 00:25:14,766
some exposure to foreign markets?

924
00:25:15,617 --> 00:25:17,880
Well, you're going to get exposure.

925
00:25:17,960 --> 00:25:20,821
Let's say some company

926
00:25:20,902 --> 00:25:23,344
domiciled in New York City

927
00:25:24,884 --> 00:25:27,727
is a multinational corporation, right?

928
00:25:27,747 --> 00:25:29,548
That means they sell in Europe,

929
00:25:29,587 --> 00:25:32,430
they sell in China, they sell in Japan.

930
00:25:33,250 --> 00:25:34,352
They're going to have

931
00:25:35,472 --> 00:25:36,492
currency exposure in all

932
00:25:36,512 --> 00:25:37,513
those countries because

933
00:25:37,534 --> 00:25:40,655
they transact in euros or yen or won.

934
00:25:41,824 --> 00:25:42,724
And they're going to have

935
00:25:42,785 --> 00:25:44,925
exposure to the consumer in

936
00:25:44,986 --> 00:25:46,707
all those countries as well.

937
00:25:46,967 --> 00:25:48,788
And I looked at this recently,

938
00:25:49,009 --> 00:25:50,109
and don't mark my words

939
00:25:50,829 --> 00:25:52,250
because I'm doing this off

940
00:25:52,270 --> 00:25:52,810
the top of my head,

941
00:25:52,830 --> 00:25:54,412
but I think about thirty

942
00:25:54,932 --> 00:25:56,413
percent of the revenue of

943
00:25:56,453 --> 00:25:57,453
the S&P five hundred is

944
00:25:57,513 --> 00:25:58,634
generated internationally.

945
00:25:59,596 --> 00:26:00,476
So you're going to have a

946
00:26:00,536 --> 00:26:03,919
lot of the benefit of the

947
00:26:03,999 --> 00:26:05,779
international consumer just

948
00:26:05,819 --> 00:26:07,641
by holding the largest five

949
00:26:07,661 --> 00:26:08,781
hundred stocks in the United States.

950
00:26:09,482 --> 00:26:09,923
Very good.

951
00:26:09,982 --> 00:26:11,184
Thank you for adding that

952
00:26:11,224 --> 00:26:12,026
commentary on that.

953
00:26:12,066 --> 00:26:14,208
So go to the other argument

954
00:26:14,288 --> 00:26:17,251
of why we should have

955
00:26:17,432 --> 00:26:18,334
direct international

956
00:26:18,354 --> 00:26:20,276
exposure in our portfolios.

957
00:26:20,696 --> 00:26:22,318
Yeah, so ten years is a long time.

958
00:26:22,679 --> 00:26:24,121
I mentioned that earlier with the U.S.,

959
00:26:25,602 --> 00:26:26,602
But most of us are probably

960
00:26:26,622 --> 00:26:27,563
going to be investing for

961
00:26:27,623 --> 00:26:28,542
longer than ten years.

962
00:26:31,483 --> 00:26:32,703
I hope to be investing for

963
00:26:32,763 --> 00:26:34,105
the next sixty years of my life,

964
00:26:34,125 --> 00:26:34,525
for example.

965
00:26:34,545 --> 00:26:35,944
That means I'll have a very,

966
00:26:36,005 --> 00:26:37,125
very nice long life,

967
00:26:37,605 --> 00:26:38,506
one that I could be proud of.

968
00:26:39,547 --> 00:26:40,287
But in reality,

969
00:26:40,307 --> 00:26:41,426
I'll probably be investing

970
00:26:41,487 --> 00:26:43,028
for longer than those sixty years.

971
00:26:44,288 --> 00:26:46,348
Because I hope to get to a

972
00:26:46,409 --> 00:26:47,390
point where I'm investing

973
00:26:47,410 --> 00:26:49,549
for my heirs to a certain degree.

974
00:26:49,589 --> 00:26:52,132
So if you're older and you're thinking,

975
00:26:52,231 --> 00:26:53,271
I don't have ten years,

976
00:26:54,031 --> 00:26:54,932
the likelihood that you're

977
00:26:54,952 --> 00:26:55,932
investing for longer than

978
00:26:55,972 --> 00:26:57,193
ten years is probably very, very,

979
00:26:57,233 --> 00:26:57,874
very high.

980
00:26:58,815 --> 00:26:59,694
Oftentimes we see that

981
00:26:59,734 --> 00:27:01,635
people are outliving their money.

982
00:27:02,375 --> 00:27:03,457
So you might want to think

983
00:27:03,477 --> 00:27:04,896
in increments that are much

984
00:27:04,957 --> 00:27:05,857
longer than ten years.

985
00:27:06,897 --> 00:27:08,098
And I will say that, you know,

986
00:27:08,118 --> 00:27:09,598
I'll admit that ten years is a long time.

987
00:27:09,638 --> 00:27:11,420
If an investment's not

988
00:27:11,460 --> 00:27:12,361
panning out over ten years,

989
00:27:12,381 --> 00:27:14,741
you might want to rethink your thesis.

990
00:27:14,781 --> 00:27:18,423
Now, why is that important?

991
00:27:18,442 --> 00:27:20,023
There are long stretches

992
00:27:20,044 --> 00:27:21,765
where international stocks have performed,

993
00:27:22,265 --> 00:27:23,465
including the late eighties

994
00:27:23,486 --> 00:27:24,566
and the early two thousands.

995
00:27:24,766 --> 00:27:26,307
Now that the late eighties

996
00:27:26,326 --> 00:27:27,287
and the early two thousands,

997
00:27:27,307 --> 00:27:28,688
that's well within my lifetime.

998
00:27:30,234 --> 00:27:30,494
You know,

999
00:27:30,595 --> 00:27:33,415
and that's long within the time

1000
00:27:33,455 --> 00:27:34,736
that my parents, for example,

1001
00:27:34,776 --> 00:27:35,496
have been investing.

1002
00:27:36,477 --> 00:27:37,797
So you might want exposure

1003
00:27:37,856 --> 00:27:39,336
to take advantage of those opportunities.

1004
00:27:40,557 --> 00:27:40,758
You know,

1005
00:27:41,137 --> 00:27:43,458
if a client's investing for many decades,

1006
00:27:43,897 --> 00:27:44,778
this is evidence that it

1007
00:27:44,798 --> 00:27:46,598
might be helpful to have an

1008
00:27:46,618 --> 00:27:47,719
international allocation.

1009
00:27:49,239 --> 00:27:50,220
Many people believe that

1010
00:27:50,380 --> 00:27:51,319
part of the reason for the

1011
00:27:51,339 --> 00:27:51,759
international

1012
00:27:51,779 --> 00:27:52,640
underperformance has been

1013
00:27:52,660 --> 00:27:54,019
the extent of dollar strength.

1014
00:27:54,059 --> 00:27:55,101
And if the dollar to weaken,

1015
00:27:55,141 --> 00:27:56,381
an international would benefit.

1016
00:27:57,357 --> 00:27:58,979
This is a reasonable argument.

1017
00:27:59,119 --> 00:28:00,099
And year after year,

1018
00:28:00,201 --> 00:28:02,301
I hear people say that the

1019
00:28:02,321 --> 00:28:03,623
dollar is too strong

1020
00:28:03,683 --> 00:28:06,726
relative to global interest rates.

1021
00:28:07,125 --> 00:28:09,268
And that's fine.

1022
00:28:09,387 --> 00:28:09,489
Now,

1023
00:28:09,528 --> 00:28:10,608
the problem is the dollar keeps

1024
00:28:10,628 --> 00:28:11,309
getting stronger and

1025
00:28:11,349 --> 00:28:12,830
stronger relative to

1026
00:28:12,871 --> 00:28:13,652
international companies.

1027
00:28:13,672 --> 00:28:15,554
So we can't see if this thesis is true.

1028
00:28:16,153 --> 00:28:18,516
But what this is important

1029
00:28:18,856 --> 00:28:22,319
for is saying that all the

1030
00:28:22,339 --> 00:28:23,480
data that I've talked about

1031
00:28:24,141 --> 00:28:25,041
is historical data.

1032
00:28:25,652 --> 00:28:26,653
This says nothing about

1033
00:28:26,692 --> 00:28:27,752
what's going to happen in the future,

1034
00:28:28,053 --> 00:28:28,253
right?

1035
00:28:28,634 --> 00:28:30,174
We talked about the returns

1036
00:28:30,275 --> 00:28:31,255
over the last ten years.

1037
00:28:31,694 --> 00:28:32,756
We talked about returns

1038
00:28:32,796 --> 00:28:33,636
outperforming in the late

1039
00:28:33,717 --> 00:28:34,957
eighties and the early two thousands.

1040
00:28:35,678 --> 00:28:36,778
That was all a long time ago,

1041
00:28:37,057 --> 00:28:37,878
and we need to be forward

1042
00:28:37,898 --> 00:28:38,838
looking as investors.

1043
00:28:39,480 --> 00:28:41,040
This argument is a good

1044
00:28:41,121 --> 00:28:43,261
argument about being forward looking now.

1045
00:28:43,971 --> 00:28:44,971
There's also a very good

1046
00:28:45,010 --> 00:28:45,971
argument that international

1047
00:28:45,990 --> 00:28:47,011
stocks are much,

1048
00:28:47,092 --> 00:28:49,192
much cheaper than domestic stocks.

1049
00:28:49,271 --> 00:28:50,373
The price to earnings ratio

1050
00:28:50,393 --> 00:28:51,752
is about eight turns cheaper.

1051
00:28:53,113 --> 00:28:54,032
And the dividend yield is

1052
00:28:54,053 --> 00:28:55,814
about twice that of domestic stocks.

1053
00:28:55,953 --> 00:28:56,894
So, you know,

1054
00:28:56,953 --> 00:28:58,855
on those two very common use

1055
00:28:58,894 --> 00:29:00,214
metrics for valuation,

1056
00:29:00,595 --> 00:29:01,934
international stocks are much,

1057
00:29:02,075 --> 00:29:02,795
much cheaper.

1058
00:29:02,815 --> 00:29:04,536
I would argue that there's

1059
00:29:04,556 --> 00:29:07,336
some good reasons for this.

1060
00:29:07,376 --> 00:29:08,817
Mostly that they're not growing as quick.

1061
00:29:10,297 --> 00:29:11,458
And they're not growing as

1062
00:29:11,498 --> 00:29:12,917
quick because they don't have...

1063
00:29:16,306 --> 00:29:18,571
technology industry that is

1064
00:29:19,153 --> 00:29:21,018
as robust as ours here in

1065
00:29:21,057 --> 00:29:21,720
the United States.

1066
00:29:22,340 --> 00:29:22,500
Now,

1067
00:29:23,720 --> 00:29:24,901
how do we put all this together?

1068
00:29:25,760 --> 00:29:27,541
And, um, you know,

1069
00:29:27,561 --> 00:29:28,622
what do I do personally?

1070
00:29:28,883 --> 00:29:30,303
And what do we do for our clients?

1071
00:29:30,482 --> 00:29:32,064
Well, personally,

1072
00:29:32,144 --> 00:29:32,624
I do have some

1073
00:29:32,644 --> 00:29:33,785
international stock positions.

1074
00:29:34,285 --> 00:29:36,965
So the way my personal portfolio is,

1075
00:29:37,006 --> 00:29:38,666
which I become more and

1076
00:29:38,686 --> 00:29:39,448
more convinced that it's

1077
00:29:39,488 --> 00:29:40,488
helpful for people to tell

1078
00:29:40,508 --> 00:29:41,989
them what am I'm doing with my money?

1079
00:29:43,930 --> 00:29:45,451
I invest very much alongside

1080
00:29:45,490 --> 00:29:46,090
with our clients,

1081
00:29:46,810 --> 00:29:47,991
but about half my

1082
00:29:48,011 --> 00:29:49,311
investment portfolio is an

1083
00:29:49,372 --> 00:29:50,712
index funds and about half

1084
00:29:50,752 --> 00:29:52,294
of it is an individual stock positions.

1085
00:29:53,371 --> 00:29:56,615
so on the index funds you

1086
00:29:56,634 --> 00:29:57,675
can say for all intents and

1087
00:29:57,696 --> 00:29:59,439
purposes that I'm in the s

1088
00:29:59,459 --> 00:30:02,663
p and on on my individual

1089
00:30:02,702 --> 00:30:04,244
stock positions I have

1090
00:30:05,006 --> 00:30:06,748
international stocks in

1091
00:30:06,788 --> 00:30:08,630
there now I why do I think

1092
00:30:08,670 --> 00:30:09,191
that's good well

1093
00:30:11,211 --> 00:30:12,874
I don't do it specifically

1094
00:30:12,913 --> 00:30:13,654
because I want

1095
00:30:13,694 --> 00:30:15,116
international diversification,

1096
00:30:15,356 --> 00:30:16,198
even though I think that's

1097
00:30:16,218 --> 00:30:16,959
an added benefit.

1098
00:30:17,219 --> 00:30:18,140
I do it because I think

1099
00:30:18,160 --> 00:30:19,141
they're some of the best in

1100
00:30:19,181 --> 00:30:19,961
class companies.

1101
00:30:20,222 --> 00:30:21,564
And I want to buy the best

1102
00:30:21,604 --> 00:30:22,484
in class companies when it

1103
00:30:22,525 --> 00:30:24,166
comes to my individual stock portfolio,

1104
00:30:24,326 --> 00:30:25,588
regardless of where they

1105
00:30:25,608 --> 00:30:26,569
are domiciled in the world.

1106
00:30:27,577 --> 00:30:29,240
Um, not necessarily, regardless,

1107
00:30:29,259 --> 00:30:30,401
there are certain reasons

1108
00:30:30,461 --> 00:30:31,501
why I wouldn't want to hold

1109
00:30:31,602 --> 00:30:32,742
Chinese stocks, for example,

1110
00:30:32,782 --> 00:30:34,423
even if they tend to be very,

1111
00:30:34,444 --> 00:30:35,184
very good companies.

1112
00:30:35,224 --> 00:30:37,768
But generally speaking, I want to hold, uh,

1113
00:30:37,788 --> 00:30:38,969
the best companies in, in,

1114
00:30:39,169 --> 00:30:40,809
in reasonable and reasonable countries.

1115
00:30:42,030 --> 00:30:44,473
Um, and that ends up being about of my,

1116
00:30:44,673 --> 00:30:46,976
my individual stock, uh, portfolio.

1117
00:30:46,996 --> 00:30:47,036
Uh,

1118
00:30:52,104 --> 00:30:52,403
Now,

1119
00:30:52,463 --> 00:30:54,346
for our ETF mutual fund portfolios for

1120
00:30:54,385 --> 00:30:55,266
individual clients,

1121
00:30:55,826 --> 00:30:57,728
we utilize an active mutual

1122
00:30:57,768 --> 00:31:00,128
fund that's pretty concentrated.

1123
00:31:00,209 --> 00:31:01,349
So what do I mean by that?

1124
00:31:01,769 --> 00:31:01,990
Well,

1125
00:31:02,029 --> 00:31:03,010
some of the best companies in the

1126
00:31:03,050 --> 00:31:04,311
world that I mentioned that

1127
00:31:05,271 --> 00:31:06,153
I might have in my

1128
00:31:06,192 --> 00:31:07,374
individual stock portfolio

1129
00:31:07,713 --> 00:31:08,433
are going to be some of the

1130
00:31:08,493 --> 00:31:10,275
top holdings in this active mutual fund.

1131
00:31:10,575 --> 00:31:11,236
And that's one of the

1132
00:31:11,256 --> 00:31:12,696
reasons why we choose to use that.

1133
00:31:13,457 --> 00:31:14,837
We've been underweight

1134
00:31:14,938 --> 00:31:18,640
international against the MSC Acqui Index,

1135
00:31:19,161 --> 00:31:19,520
which is

1136
00:31:20,669 --> 00:31:22,630
The reason of which is I'm

1137
00:31:22,650 --> 00:31:23,651
really stripping out China.

1138
00:31:24,371 --> 00:31:25,531
I don't really like being in

1139
00:31:25,932 --> 00:31:28,054
China exposed stocks.

1140
00:31:28,634 --> 00:31:29,454
As a replacement,

1141
00:31:29,615 --> 00:31:30,255
I've chosen to be in

1142
00:31:30,275 --> 00:31:31,195
emerging market bonds.

1143
00:31:31,895 --> 00:31:33,257
And that's been really great

1144
00:31:33,277 --> 00:31:34,978
for us because in recent years,

1145
00:31:35,018 --> 00:31:37,480
it's giving us about the

1146
00:31:37,500 --> 00:31:38,520
same amount of return as

1147
00:31:38,560 --> 00:31:41,742
those emerging market stocks,

1148
00:31:41,843 --> 00:31:44,104
but with much, much, much less risk.

1149
00:31:44,244 --> 00:31:45,585
And that's benefited for us.

1150
00:31:45,644 --> 00:31:47,287
So that's how I do it personally.

1151
00:31:47,307 --> 00:31:48,146
And that's how we're doing

1152
00:31:48,186 --> 00:31:49,508
it for the vast majority of our clients.

1153
00:31:51,047 --> 00:31:51,186
Russ,

1154
00:31:51,227 --> 00:31:52,489
did you have any questions for Brian

1155
00:31:52,528 --> 00:31:54,451
on the subject of investing

1156
00:31:54,511 --> 00:31:55,153
internationally?

1157
00:31:56,007 --> 00:31:56,307
Yeah,

1158
00:31:57,428 --> 00:31:58,867
I guess when you're looking at

1159
00:31:59,189 --> 00:32:01,150
opportunities to invest internationally,

1160
00:32:01,190 --> 00:32:02,890
are you looking at, you know,

1161
00:32:02,910 --> 00:32:03,770
you mentioned specific

1162
00:32:03,810 --> 00:32:04,590
companies that you just

1163
00:32:04,770 --> 00:32:05,711
think are really good companies.

1164
00:32:05,751 --> 00:32:06,511
That makes a lot of sense.

1165
00:32:07,071 --> 00:32:07,772
Are you ever looking at

1166
00:32:07,813 --> 00:32:10,054
specific regions as

1167
00:32:10,213 --> 00:32:11,394
potential areas where

1168
00:32:11,894 --> 00:32:13,655
opportunity can evolve

1169
00:32:13,675 --> 00:32:15,415
based on the growth story or, for example,

1170
00:32:15,497 --> 00:32:16,076
with some of the

1171
00:32:16,656 --> 00:32:17,698
nearshoring developments

1172
00:32:17,718 --> 00:32:18,758
that have gone over the

1173
00:32:18,778 --> 00:32:19,778
last several years?

1174
00:32:19,838 --> 00:32:20,778
I know a lot of analysts

1175
00:32:20,818 --> 00:32:22,700
look at emerging markets as

1176
00:32:22,759 --> 00:32:24,421
potentially higher opportunities.

1177
00:32:24,961 --> 00:32:25,961
higher growth opportunities

1178
00:32:25,981 --> 00:32:28,103
than developed international markets.

1179
00:32:28,323 --> 00:32:32,224
What are your thoughts on that?

1180
00:32:32,244 --> 00:32:33,325
I think the story is

1181
00:32:33,345 --> 00:32:33,965
different when you think

1182
00:32:33,986 --> 00:32:35,026
about funds and it's

1183
00:32:35,046 --> 00:32:37,208
different versus individual stocks.

1184
00:32:38,569 --> 00:32:39,810
when I buy international

1185
00:32:39,851 --> 00:32:40,971
stocks the individual

1186
00:32:40,991 --> 00:32:41,873
stocks of the individual

1187
00:32:41,913 --> 00:32:43,433
companies I don't think of

1188
00:32:43,474 --> 00:32:44,394
it any differently than I

1189
00:32:44,434 --> 00:32:48,038
think of my uh allocation

1190
00:32:48,058 --> 00:32:48,959
to domestic stocks I'm

1191
00:32:48,979 --> 00:32:49,819
looking for consistent

1192
00:32:49,859 --> 00:32:51,320
companies with growth so uh

1193
00:32:51,382 --> 00:32:54,183
you know what is what does

1194
00:32:54,223 --> 00:32:55,625
that mean well think about

1195
00:32:55,684 --> 00:32:56,766
some companies in domestic

1196
00:32:56,786 --> 00:32:58,428
markets that might have

1197
00:32:58,528 --> 00:33:00,509
near monopolies uh think about

1198
00:33:01,109 --> 00:33:02,070
companies that are

1199
00:33:02,651 --> 00:33:04,051
predictably growing margins

1200
00:33:04,711 --> 00:33:06,093
that trade at fair prices.

1201
00:33:06,113 --> 00:33:06,913
That's what I'm doing when

1202
00:33:06,932 --> 00:33:08,794
it comes to the individual market.

1203
00:33:08,834 --> 00:33:09,075
Now,

1204
00:33:09,535 --> 00:33:11,836
that has very little to do with

1205
00:33:12,557 --> 00:33:14,258
short-term trends.

1206
00:33:14,617 --> 00:33:15,998
It's more about what I

1207
00:33:16,038 --> 00:33:17,338
expected to do in the long term.

1208
00:33:18,519 --> 00:33:20,820
Now, when it comes to funds,

1209
00:33:20,901 --> 00:33:23,343
we do have a strategy

1210
00:33:23,383 --> 00:33:25,163
called the Sixty Forty Core Explore.

1211
00:33:25,584 --> 00:33:27,204
Now, the Core Explore is

1212
00:33:28,599 --> 00:33:30,163
The core part of that

1213
00:33:30,203 --> 00:33:33,373
portfolio is the strategies

1214
00:33:33,393 --> 00:33:34,355
that we would utilize

1215
00:33:34,394 --> 00:33:36,140
because we like them for the long term.

1216
00:33:36,734 --> 00:33:37,755
the explore part of that

1217
00:33:37,795 --> 00:33:39,935
portfolio would try to take

1218
00:33:39,955 --> 00:33:42,537
advantage of some short term opportunity.

1219
00:33:42,737 --> 00:33:44,897
So in that explore part of that portfolio,

1220
00:33:46,038 --> 00:33:47,959
which is a relatively small part,

1221
00:33:47,999 --> 00:33:49,138
but it ends up to be about

1222
00:33:49,159 --> 00:33:50,380
fourteen percent of the portfolio,

1223
00:33:51,279 --> 00:33:52,319
we're trying to take

1224
00:33:52,339 --> 00:33:53,461
advantage of some of the

1225
00:33:53,480 --> 00:33:54,340
things that you mentioned.

1226
00:33:54,480 --> 00:33:55,821
And sometimes that might end

1227
00:33:55,882 --> 00:33:59,103
up having an allocation to

1228
00:33:59,303 --> 00:34:03,163
an international ETF or mutual fund.

1229
00:34:03,183 --> 00:34:04,244
For example, we've been in

1230
00:34:05,345 --> 00:34:07,769
a japan focused etf in the

1231
00:34:07,809 --> 00:34:09,231
last couple years in that

1232
00:34:09,271 --> 00:34:10,514
we've been in an india one

1233
00:34:10,554 --> 00:34:13,440
and more recent past so you

1234
00:34:13,460 --> 00:34:15,282
know those types of trends

1235
00:34:15,382 --> 00:34:16,545
could could end up in that

1236
00:34:16,686 --> 00:34:17,387
in that portfolio great

1237
00:34:19,721 --> 00:34:20,340
Thank you, Brian,

1238
00:34:20,362 --> 00:34:22,023
for taking on a couple of

1239
00:34:22,123 --> 00:34:23,523
our client listener

1240
00:34:23,563 --> 00:34:25,264
questions and digging into them.

1241
00:34:25,965 --> 00:34:28,047
I enjoy your commentary always,

1242
00:34:28,086 --> 00:34:30,068
and I know our listeners do as well.

1243
00:34:30,108 --> 00:34:31,650
And thank you for listening

1244
00:34:31,750 --> 00:34:32,911
to our podcast today.

1245
00:34:32,990 --> 00:34:34,371
If you'd like to give us

1246
00:34:34,411 --> 00:34:35,853
your opinion on our podcast,

1247
00:34:35,954 --> 00:34:37,173
in the show notes of this

1248
00:34:37,215 --> 00:34:39,635
episode is a link to a survey.

1249
00:34:39,996 --> 00:34:40,916
And we'd like to know what

1250
00:34:40,936 --> 00:34:42,137
you think about the topics

1251
00:34:42,217 --> 00:34:43,518
that we talk about,

1252
00:34:43,579 --> 00:34:44,739
maybe what you'd like to hear.

1253
00:34:45,181 --> 00:34:46,001
If you'd just take a minute

1254
00:34:46,041 --> 00:34:47,041
and complete that survey,

1255
00:34:47,081 --> 00:34:48,143
we would really appreciate it.

1256
00:34:49,014 --> 00:34:49,840
Until next time,

1257
00:34:50,322 --> 00:34:51,934
keep striving for something more.

1258
00:34:54,436 --> 00:34:55,518
thank you for listening to

1259
00:34:55,577 --> 00:34:56,679
something more with chris

1260
00:34:56,719 --> 00:34:58,239
boyd call us for help

1261
00:34:58,559 --> 00:34:59,659
whether it's for financial

1262
00:34:59,721 --> 00:35:00,860
planning or portfolio

1263
00:35:00,900 --> 00:35:02,222
management insurance

1264
00:35:02,262 --> 00:35:03,983
concerns or those quality

1265
00:35:04,023 --> 00:35:05,204
of life issues that make

1266
00:35:05,244 --> 00:35:06,724
the money matters matter

1267
00:35:07,025 --> 00:35:08,025
whatever's on your mind

1268
00:35:08,146 --> 00:35:08,887
visit us at

1269
00:35:08,927 --> 00:35:10,867
somethingmorewithchrisboyd.com

1270
00:35:11,387 --> 00:35:12,949
or call us toll free at

1271
00:35:12,969 --> 00:35:14,690
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1272
00:35:14,889 --> 00:35:17,552
one eight nine zero one or

1273
00:35:17,632 --> 00:35:18,952
send us your questions to

1274
00:35:19,432 --> 00:35:22,916
amr dash info at wealthenhancement.com

1275
00:35:23,396 --> 00:35:23,956
You're listening to

1276
00:35:23,996 --> 00:35:24,817
Something More with Chris

1277
00:35:24,876 --> 00:35:25,938
Boyd Financial Talk Show.

1278
00:35:25,978 --> 00:35:27,059
Wealth Enhancement Advisory

1279
00:35:27,099 --> 00:35:27,838
Services and Jay

1280
00:35:27,858 --> 00:35:28,820
Christopher Boyd provide

1281
00:35:28,840 --> 00:35:29,800
investment advice on an

1282
00:35:29,880 --> 00:35:31,461
individual basis to clients only.

1283
00:35:31,541 --> 00:35:32,583
Proper advice depends on a

1284
00:35:32,623 --> 00:35:33,724
complete analysis of all

1285
00:35:33,764 --> 00:35:34,864
facts and circumstances.

1286
00:35:35,005 --> 00:35:35,844
The information given on

1287
00:35:35,864 --> 00:35:36,846
this program is general

1288
00:35:36,885 --> 00:35:37,746
financial comments and

1289
00:35:37,766 --> 00:35:38,847
cannot be relied upon as

1290
00:35:38,867 --> 00:35:40,528
pertaining to your specific situation.

1291
00:35:40,628 --> 00:35:41,369
Wealth Enhancement Group

1292
00:35:41,429 --> 00:35:42,469
cannot guarantee that using

1293
00:35:42,489 --> 00:35:43,331
the information from this

1294
00:35:43,371 --> 00:35:44,492
show will generate profits

1295
00:35:44,512 --> 00:35:45,773
or ensure freedom from loss.

1296
00:35:45,913 --> 00:35:46,733
Listeners should consult

1297
00:35:46,753 --> 00:35:47,474
their own financial

1298
00:35:47,494 --> 00:35:48,494
advisors or conduct their

1299
00:35:48,534 --> 00:35:49,655
own due diligence before

1300
00:35:49,695 --> 00:35:51,077
making any financial decisions.