Unhealthy Financial Food for Thought, Ep #96

What's up! It's episode 96 of Payne Points of Wealth! Fool me once J. Powell, shame on me, fool me twice, shame on you. The FED continues to talk tough when it comes to raising interest rates to combat inflation. Yet only a year ago, they said there was no reason to raise interest rates at all. Should you trust the FED? Is anything they're saying right now making sense? Should you believe it? Are we going into recession? Is inflation actually coming down? Well, we're gonna give you our viewpoint on what we think is happening right now in the economy, and what you need to be doing with your portfolio. We're also going to talk about unhealthy financial foods. The financial services industry loves to sell you lots of products that you probably don't need in your portfolio. We're gonna break that down for you. Check it out.

You will want to hear this episode if you are interested in...

• No one can know what’s unknowable [1:14]
• Energy’s impact on inflation [4:49]
• A huge % of your return comes from dividends [7:02]
• The Tipping Point [11:33]
• Added sugar [14:51]
• Trans fats [17:23]
• Personal trainer vs DIY [19:44]
• Hidden Facts of Finance [21:35]

Negativity = Opportunity

One thing we know for sure is that there's extreme pessimism out there right now. The negativity is so thick you can cut it with a knife. More than one client called this week and said Michael Burry, that guy from The Big Short, he's negative now, he's bearish and calling for a big bubble burst. Well, we get these guys through every cycle. Every cycle you have somebody who made a correct call or a lucky guess and they never have a second one. Better to be right once than never? We used to have magazine covers that would tell us how things are going. Back in the 70s' Businessweek was famous for its headline, The Death of Equities. They wrote an article in 1979 saying stocks would never go up again. That was the biggest bottom of Bob's career and the best buying opportunity he's ever seen in his life. You have the same type of situation right now. 

This week on the tipping point: Unhealthy Financial Food

In the financial world, there's a lot of fluff or, products and services you probably want to avoid at all costs. So I thought we could use the analogy of unhealthy financial food and talk about how there are unhealthy financial products that our listeners need to avoid at all costs. 

Talk about empty calories, I was doing a proposal for a client and he brought a proposal that he'd received from one of the big banks. The proposal was 75 pages long. After going through it, I could only find about three pages worth of good information. The rest was just legalese and a bunch of what we call industry jargon.

What you see in the financial services industry are these fancy products that add on all these bells and whistles. We know that a lot of annuities out there are guilty of this. A lot of these structured products are where you only get limited downside but you get X amount of the upside. They sound sexy. They sound like really good common sense products but when you start looking under the hood at how they work, you're not getting a good deal. It's actually bad for your financial life. 

This week’s hidden facts of finance

• Annual global sales of industrial robots and factory automation are forecasted to more than double by 2027.
• Nielsen disclosed that US streaming in July passed cable viewership for the first time ever with 34.8 of total viewing hours versus 34.4% for cable and 21.6% for broadcast TV. Broadcast TV is clearly out.
• Nielsen disclosed that US streaming in July passed cable viewership for the first time ever with 34.8 of total viewing hours versus 34.4% for cable and 21.6% for broadcast TV. Broadcast TV is clear!
• While equities are still holding up relative to bonds, there have been no monthly flows into stocks over the past half year. Bonds hate inflation, equities hate recession and risk sentiment right now is appalling.

Resources & People Mentioned

• Michael Burry article
• Death of Equities

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