Speaker 1 (00:11):

Hello, my name is Chad Taylor, managing partner with MDT Financial Advisors here in Houston, Texas.

Speaker 1 (07:37):

When those leveraged sales start happening, it just makes the markets more volatile and the selling on the downside more at this point, the NASDAQ stocks, which that's where most of those magnificent seven stocks were, the NASDAQ stock market is down about 16% from their highs. When I was looking here earlier today, it was down about 3% today on the nasdaq, but it's a broad sell, but those are the worst of it. Now, there are some things that are a little more normal. Let's talk about the bond market or fixed income. If you remember, I know I've said it a bunch of times in 2022, the stock market sold off quite a bit during that year, closed down pretty tough that year, but you also had the bond market down worse than I've seen it in my career since I've been in the business since the middle nineties, and really as bad as anyone's seen it since the Great Depression, that was in 2022 because the stock market was down and the bond market was down.

Speaker 1 (08:50):

This time, the stock market here, short term has been down and the bond market has gone up a bit because interest rates are falling. And so you do have a little bit of that seesaw effect going on, which helps the portfolios that are more balanced, more middle of the road. Now with those moves in the bond market and interest rates, the bond market is kind of telling the Fed. It may be time to lower rates. As I mentioned earlier. We do think that they'll probably lower rates here in September, maybe another time before the end of the year. Now, I read something earlier today that some people are projecting that they're going to lower rates as much as one and a quarter percent before the end of the year. That's all yet to be seen. I think if we start getting multiple and bigger rate cuts, that means the economy is slowing down more than they anticipated and they're trying to play catch up a little bit.

Speaker 1 (09:52):

But those are things that if it's orderly, that's probably not a bad thing from here, but those are things to keep an eye on. Now, as I mentioned, we've been preaching trying to be cautious for a while, but that's not to say that we think the economy is in a free fall as we kind of put it in a report. We don't at this point could it continue to slow down. I think the second quarter reading of the GDP came in at about 2.8% a year over year, which is pretty good. But we're worried that all these things could continue to slow the economy down, but we don't expect it to be a really bad time, which ultimately should be good for the markets and get these things to kind of stabilize. What you want to kind of watch is consumer spending. Will consumer spending hold up during all of this?

Speaker 1 (10:56):

I mentioned unemployment earlier. If unemployment continues to go up and past that 5% mark, that's where you start to worry. At this point, we don't think that that will be the case, but we're always with people that have been cautious but still don't think it's going to be a horrible time. They're just looking for that soft landing of the economy after the interest rates. So that's a lot of information and like I said, if you would like a copy of that report, please just let me know. I do believe that volatility will probably be here short term with us for a while. I don't like it. It's always tough to go through it when you've watched your accounts inch their way up and then we get beat up and we lose money. It's always tough, and I understand that if we see the yen stabilize, which we think it will kind of just play itself out, that will probably be good.

Speaker 1 (12:02):

Do you make any changes? I've had the discussion a number of times today. Do you change your portfolio? Do you change your mix? Some people that we spoke to said, well, I'm not looking at anything. If you tell me we need to do something, we'll do it. And it's a funny statement. Then of course, there's some people that are very, very nervous here and I understand that as well. You wouldn't be human if you weren't a little nervous. I'm always a little nervous, but I always kind of say, if you need money in the next six months, 12 months from your investment portfolio or your nest egg, if you have a big purchase coming up, if you need something, going ahead and taking it out now and putting it in money market or a short-term CD is probably not a bad idea.

Speaker 1 (12:59):

If you may have gotten too aggressive with your portfolio, making it a little more conservative now, it's probably as good a time as any who knows for sure, but taking some risk off the table if you feel you've gotten too aggressive is not a bad idea. As you go through, some people I've worked with for over 20 years and we've been through a number of these volatile markets, is it getting harder for you to deal with? Does it hurt worse? Let's have those discussions and see what does changing the portfolio look like Once things do stabilize, does it change your outcome long term based on your plan? If nothing's changed, if you don't need money right now, if you weren't too aggressive going into this, if you are sleeping okay at night, sometimes not making any changes is the best thing to do, but that's hard to do from time.

Speaker 1 (14:03):

It's hard to do. It's human nature. Not to worry a little bit about it, which like I said, is very normal. We've come a long way since the lows of October of 2023. Will this time pull back further? It's yet to be seen. I do believe that when we look back in five years, we probably won't remember this one quite as much, although in the next five days we might. And so as I started the video off with, if you'd like to talk, please don't hesitate to reach out. Send us a message. We'll call. We'll talk about it. We'll look at your plan to see are you still on track? Are you not on track? Do we need to make some adjustments? But when times are like this, we're here to help. If you have questions, please don't hesitate to reach out. I hope you have a good day. Thank you.