Welcome to this edition of advisor Insights. Joining me to discuss what his clients are asking him about most. How he's mentoring other advisers and how he's adjusting allocations in this market environment. Is David Stray, the CEO of Sound Planning Group. David? Thank you very much for joining us today. Pleasure to be here, Jonathan. So there's so much going on in the market right now. What is top of mind for clients? What are they asking you about most? Uh

 Well, great question. I mean, we just finished the longest bull market in the world's history.

 And so of course, the question is what happens now, especially given some of the challenges that we're facing at this moment with debt crisis, we've got interest rates that just flip because of what the fed has ultimately done. Of course, that was the fastest raise in the world's history. So, you know, a lot of families today that we work with are nearing or entering retirement and so they don't have a lot of extra time to be making up for, you know, significant market crashes like we saw in 2008. So they're saying, hey, how do I be more conservative today. What are some of the things that I should really be watching for right now? Given this higher inflation time frame, given a lot of the challenges that are taking place geopolitically and given a lot of the changes again, that happened with the change of cost of capital, you know, interest rates went up, everything is more expensive.

 And you mentioned 2008, do you see similar similarities here to the great financial crisis?

 Well, yes. So when we had this recession in 2008, it was accompanied with a financial crisis. Now, recessions come and go. Those are cyclical but financial crisis are unique. And then the two of those happening at the same time is very, very challenging. I see that actually unfolding today and of course, the Federal Reserve now recognizes that although they said that they were surprised that this banking crisis ultimately happened. So I would say that if viewers, they are thinking that we're out of a financial crisis with the banking, they might might, might want to think twice because it takes typically 13 months for, you know, Lehman Bear Stearns Washington Mutual to begin to unfold. And we've had three massive crashes within a matter of two months here, you know, already happened. So I think we're not out of the woods yet.

So something we'll certainly keep an eye on you mentor financial advisory firms across the country. What are they asking you about most right now, a lot of advisers today are, are looking at, ok, so, um you know, what has changed since 2020 you know, COVID changed the world period when you can get people to begin to think differently, that brings a lot of movement and shift to things. So obviously, we saw a work from home and, and, and that's not going away, especially in younger, you know, advisor and people that are out there right now and their, their clients. And so, you know, as we're, as we're looking at that, I think that it's important to have 2020 hindsight, you know, and, and, and that is, you know, so we can look back at where we were recognize where we are today, get a perspective of where we're going. So a lot of these advisers are wondering, hey, how do we allocate portfolios? Uh What are some of the conversations that we need to be having right now? And, you know, ultimately looking at 2007, if we were going into 2008, what would you do differently? And that's where a lot of those conversations uh go

 earlier, you mentioned the, the rate hikes, we've, we've seen 10 consecutive rate hikes from the FED, one of the fastest rate hikes in history.What are your expectations for the next film meeting? And where do you see uh the economy as a result of whatever the FED does at thenext film. 

Ok. So who knows what the Federal Reserve is ultimately going to do? It depends on what we get for PC coming out here and where they're going to hold or not. So, I think that they're going to hold and they're going to be higher for longer. Ok. So, um, you know, the challenge might be that a lot of people are expecting the fed to drop rates that would happen once we get inflation under control. I think again, it's going to take a little while here because our global economy is starting to slow down right now and, and the fed does not want to repeat the same challenges that we had in 1974 when they paused and then of course, everything you know, went up again, we got an election year happening in 2024. There's going to be a lot of pressure to not increase rates. So I think they've got to get inflation under control right now prior to getting into 24 then they can look at dropping rates. But here's the problem.

 I think that we're seeing a recession show up here in the next couple of months. And ultimately, that's going to blow up this goldilocks soft landing, you know, narrative that the fed is trying to go for goldilocks moment is going to happen. Rates are going to drop and we're going to get off to the races again. I think it's going to be a lot more invasive than that. I think that there's a lot of challenges that we're facing here and I think that they're not going to be able to drop prior to this recession showing up.

 So, uh that, that brings me to one of my questions. So you said next couple of months, do you have a better sense? Uh Where, where are you expecting the, the recession to come in and, and it sounds like you're expecting a hard landing. How hard are you expecting it to be? 

So, I don't wanna be bullish or bearish rather, I mean, the goal is, is that I'm data driven, I'm gonna follow the trends. Uh We've got a lot of warning signs that are flashing that are either wrong or rarely wrong, they're all going off right now. And so if we're looking at leading economic indicators from the conference board that indicated last summer that we should be, we should be in a recession within 12 months, that's never been wrong. Um You know, we've got the inverted yield curve. Obviously, the shorter end of that is stacking up higher and higher, which tells us that we're getting closer to a time frame where this inflection point is going to be, you know, the challenge that we have with calling recessions is that, you know, how do we define it if we define it based upon two negative quarters where we had that last year, if we define it based upon how the middle class of America is doing. I'd say for sure that happened last year, if we define it based on how the feds calling things. Well, who knows, ultimately, you know, where that's going to be. I think that we're looking at, you know, a couple of months from now tops that we're going to begin to see the data really come out that there's things that are slowing down that, that the world is also slowing down. And we're seeing the numbers come out right now with retail spending that is, you know, obviously falling off a cliff, we got debt ceilings or debt limits that are going up higher. We're paying over 20% on credit cards does not spell a great scenario here for the average American

 David. You've got a bare stance right now. You have 30 different portfolios with capital allocated across different

 different strategies. So what does the risk profile on your most high risk uh allocation look like right now?

 Well, to, start. So we have 30 different portfolios just kind of like in the game of golf, you got different clubs for the different shots that you're taking. So uh we're, what we're trying to do is have the breadth of uh investment opportunities available to the families that we serve. Uh because ultimately, there's no such thing as the right strategy all the time today. A lot of the strategies that we're that we're looking at. So we focus on a, um, a short term midterm and long term time frame. Just kind of like on my watch here. I've got an hour hand in minute hand in a second hand. Where am I at in the day? Where am I at in the hour? Where am I at in the minute, neither one of them are right or wrong. We just need to follow these different trends and ideas. And so from a macro standpoint, I'm very Barras right now, relative to the information that's come out as we look more mid term, short term, which I don't think a lot of investors are looking much further than that right now. Um I think that it's important to understand that, you know, tech has ultimately been leading the market. We've got this A I revolution that's taken place here. So there's a lot of great opportunity and names in there. And I think if you can hold for a longer period of time, no matter what disturbances come here in the next couple of years, you're going to be doing all right. As far as some of the better ideas go, you know, dividend portfolios are working out. Well, we were positive this last year, we positive this year obviously.

 And uh and we think that, you know, getting paid to, to, to hold is a, is a, is a good idea. Uh We like individual names over just going into ETF S or mutual funds in the broad based sense, you know, kind of more of a focus investing strategy like Warren Buffett has, has, has made uh popular, but he didn't obviously invent. Uh but uh

 but we're going away from allocation at this time. And the reason for that is, you know, stocks and bonds had their worst years since 2008 last year. Right. And they're not supposed to be correlated except when we have weird times where interest rates rise. And there's challenges. I think it's very important that we're paying attention. So we like strong equity strategies, but I'm actually not really excited about bonds today.

 And, and the reason for this is that bonds can actually lose money in five different ways. And I believe all five of those ways are on the table right now. The biggest challenge that we have today is that the interest rates rose and the seesaw effect took place with bonds. And so, you know, the, the value of those bonds go down. Silicon Valley banks forced to sell them at 30% losses. And then the Holy smokes, we weren't marking to the market what was going on and they go, we didn't have enough money.

 Um And so, and so that's, that's, that's risk number one. Um you know, the high inflationary environment that we find ourselves in people need to look at their personal inflation, you know, what is their personal inflation cost? Not just what C P I says out there that may have some bearing but probably not. Um but uh but, but people are losing right now to inflation uh on those fixed assets. And so the question is, where do we go with our fixed assets?

 Um I think that, that we're also probably as a risk here looking at with some of these banking challenges, the corporate debts not going to get re metabolized. 70% of corporate debt is metabolized by those small and mid size regional banks. Where are they going to go when those small and regional banks no longer have the cash to leverage 10 to 1.

 And so these are just worldview ideas that need to get put into our portfolios and need to be put into our investment perspectives. But ultimately, you know, we we're looking at alternatives today and one that's probably, you know, not as commonly understood is a growth oriented fixed index annuity,

 it's an insurance product, ok? And what these ultimately have the ability to do, none of the downside is of what you're hoping that bonds will do in rough years, but reasonable rates of change when the market does go up. So let's just say you're getting 50% of the S and P 500 or 10 or 12% caps, which might be available today and depending on people states that they live in, right?

 But, but ultimately, they give us the ability to ride bull markets and tame the effects of bear markets very important because what we want to do is we want to have a little bit more caution with us today because when the market goes on sale, that's when we want to deploy, that's when we want to buy who doesn't love a good sale. Right.

 And so we just don't, we just don't think that, you know, 20 time valuations are, are the low of what we're ultimately going to see here. And, you know, ultimately I'm cautious because we might find ourselves in a rolling recession because of so many systemic things that are coming together right now, geopolitical challenges with wars with the US dollar with the debt ceiling, you know, political stalemate in our nation. God forbid, we get downgraded as a nation again like 2011 for this debt ceiling.

 You know, we, we just want to make sure that that we have the ability to again ride bulls tame bears, be cautious when it's time to be cautious, deploy risk on when it's time to go risk on. So

 my next question was uh where are you seeing the best investment opportunities right now? Is, is it the fixed index annuities? Well,

 I don't think that there's better been a better time to own one than this moment today specifically for the for the bond or the the fixed portion of our portfolio. So,

 you know, I'm not really excited about bonds in general. As far as, you know, different investment strategies go. Like I said, we've got tech that's leading right now. I think it's probably hard to find a better investment today than golden silver. Specifically silver with the 83 to 1 ratio. I mean, give me

 83 ounces of silver for one ounce of gold. I'll do that deal all day. Right. When they can actually produce nine ounces of silver for one ounce of gold. So that arbitrage difference is an incredible opportunity. So miners are going to have a great moment here. I think that they're undervalued right now.

 Um Again, dividend companies, I want to caution people though on emerging markets because we need to follow debt, debt is going to be this, this heavy burden that we're gonna have to ultimately carry in the future. Emerging markets have been loading up and uh just like the US has. Um but uh but we've got a lot of challenges here as it relates to these higher interest rates for longer environment. And um it could spell trouble here for the future.

 And then are there any final thoughts that you want to leave our viewers with?

 Uh I'd say, you know, this is not a time to become complacent.

 This is a time that we need to be more active and proactive, you know, in this world, there's not a lot of things that we can control, but for the areas that we can, we should be paying attention. What can we do? We can look at our own personal CPI do great income planning. Right. We can, we can reallocate portfolios to ride bulls and tame bears better. I think that it's critical to look at tax advantage planning strategies. Do we have Roth conversion strategies today? Tax cuts and Jobs Act. We've got three more

 10 forties to file here before that thing expires and we got the, the greatest opportunity in our lifetime to reduce or eliminate taxes on our retirement dollars if we take advantage. But, uh but, but uh as we look here to the future, you know, there's, uh there's a lot that could be challenged, there could be a lot that can change. Um I think people need to just have real conversations with their advisory and they need to be able to understand, you know, hey, with my fingers on the pulse, what's changing right now? How do we move forward here into the future.

 David, thank you so much for sharing your insights this morning. 

Pleasure is mine, Jonathan. Thank you

 and to our viewers. Thanks for watching for Asset TV. I'm Jonathan Forsgren, we'll see you next time.