Does it sound familiar to have a financial plan in place, only to feel like you're not making any progress toward your long-term goals? You've probably been told to save money and invest, but the lack of results leaves you feeling frustrated and stuck. Hot streaks are exciting. Hot markets are encouraging. But long-term financial planning is (and should be) boring.

Listen on your favorite podcast app: https://coachable-wealth.captivate.fm/listen

In this episode:

• Find out how your hosts are surviving the heatwave impacting the northeast.
• Get an update on the Phillies hot streak and the PGA Tour.
• Understand the current market landscape and small moves that could make big impacts.
• Gain valuable insights into real estate market trends.
• Uncover the benefits of tax diversification in investments for financial growth.

Long-Term Investing and Boring Acts

Focusing on long-term investment strategies, the episode provides valuable insights for financial planners and investors. Jon, Cody, and Sean provide a blend of personal experiences, market trends, and sports events making this episode a must-listen for anyone seeking to improve their long-term financial planning and market awareness. Whether it's navigating real estate market trends, understanding the impact of AI technology on international emerging markets, or building wealth in 2024, this episode offers practical advice and valuable perspectives to help you make informed financial decisions.

Do you need a long-term financial game plan? Schedule a free consultation with one of our hosts: https://calendly.com/coachable-wealth

Relevant Resources:

https://www.nytimes.com/2024/06/22/your-money/financial-advisers-investing-goals.html

Important Disclosures

*Morton Brown is neither a law firm nor a certified public accounting firm. No presentation, post, or portion of any podcast content should be construed as legal or accounting advice.

Connect with Your Hosts:

Cody Demmel on LinkedIn

Sean Roth on LinkedIn

Jon Kerstetter on LinkedIn

Welcome to coachable wealth, where we blend the worlds of sports and finance to bring you strategies as you navigate your wealth building journey. John, Cody and Shawn are here to help you elevate your financial advisor relationship to meet your long term goals. Now let's get to it. Welcome back, everybody. It's been what, a month or two since we last got together?

I believe here huddled together and talked about sports and finance. Yeah, it's been a while. How's everyone's weekend? We coming off a nice little early summer heat wave? Yeah, it's been crazy hot, what, the last two weeks?

I think it's been above 90 almost every single day, which is unusual for Pennsylvania. It was good that went some, went on some walks over the weekend with the dogs and then pretty much just stayed inside the rest of the time unless I was by water, I did not really want to be outside. I actually saw it was hotter here in the northeast than it was in like the southeast of Florida and Georgia and the Carolinas. Not surprised. I toasted at a Philly's game this weekend.

So we were down the third baseline, sitting in the shade and looking at everybody on the first baseline. And then the outfield just looked like they were just burning in the sun. And the shade didn't help at all. But the Phil's putting up twelve runs did help. Yeah.

That was a really good game for the Phillies offense on Saturday. Yeah, Wheeler looked really good, too. Yeah, the Phillies, I think they have the top three eras and the NL so far, I think Rangers number one and now Chris Sanchez is number two and then Wheeler is number three. I saw that. I saw that.

Just like Wheeler. I mean, going out there on the mound in that heat, that's going to be. I mean, it's got to be draining. Oh, yeah. Mental and physically, I mean, just make it that.

I guess it helped since the Phillies offense scored so many runs. He probably got a decent break in between cause he was going like one, two, three every inning, so he probably wasn't pitching that long. And then Phillies offense was, was going off. No, the first couple innings his pitch count was super low. Yeah, I was getting nervous though, watching Friday night's game.

I was getting flashbacks from the NLCs when the Phillies get all these base runners and they can't score. I was getting nightmares about that. I didn't watch any of the game on Friday since it was on Apple tv. I don't have Apple tv. I did get to go down into the infield for a concert after the game as first time I was in that infield since I ran the bases as a kid one night 20 years ago.

How was the Riley Green concert? Was it worthwhile? It was great, if you want to talk about a good investment. So my buddy and I, who are big Riley Green and Phil's fans, bought these tickets before the season started, and they were $80 for game tickets and on the field passes for the concert. I know the fit started getting hotter.

Prices of those just took off. So we were actually joking on the field that our only regret was we didn't buy more and start selling them. That's funny. Yeah, it's definitely been a great start to the year for the Phillies. I don't even think maybe our last podcast was like the first week of the Phillies season.

So it's been a, been a long while since we've done one. But they are off to one of the best starts in history for the, for the club. I know that they have the highest win percentage in MLB right now. Yeah, it's gonna be interesting. I think it's what, two, three weeks out yet when some free agency trades can start.

But I have a hunch that Dombrowski is probably going to make a trade. Probably. Maybe a reliever and an outfielder, I would think. Yeah. Get some more depth there.

Yeah. Yeah. It'll be interesting to see what the Phillies do at the trade deadline. It's also been a good couple months for, for the stock market too, bro. How about anybody watch any golf?

See Scotty Scheffler win another one event? I did. He is just on a roll. So he's the first golfer to win six tournaments before July since Jack Nicholson did it in like 1960. Something part of me thinks, though, 22 under.

I think they gotta toughen up the course a little bit. I was listening to the broadcast. The broadcast was joking around that they had to make this course a little easier because the last two have been so tough with the US Open. And then the, the memorial was last weekend, I think. Yeah, that was a week before.

Oh, yeah, last weekend. Well, the weekend prior was that US Open. The memorial was before that. But yeah, they were like, they struggled for the last couple of weeks. So let's give them an easier course.

I was just looking at some Scottie Scheffler earnings stats right now, and basically year to date and his total career, he's made just a tad over $91 million. Yeah, it's crazy. I think he's made 28 million so far this year alone. That's crazy. I mean, he realistically could make over 60, 70 million just from golf this year, because now the FedEx cup, if you win that and he's up by an insane amount, you get a $25 million payout.

Plus, obviously, all the earnings from the golf tournaments, he probably will get over 60, $70 million just from golf earnings this year. Yeah. Yeah. I mean, it's been definitely a great year for him and the golf game, that's for sure. Just looking at some of the breakdown of the individual tournaments here, like.

Like you said, Cody travelers yesterday, 3.6 million. He won the memorial two, three weeks ago, 4 million. So, yeah, he's. He's hitting all these, uh. Yeah, he's hitting all the signature.

Yeah. Signature events. Yeah. How much did he get for the Masters? 3.6.

That's crazy. He's. He got more from the signature events than the Masters. Yeah. Yeah.

So he finished. He tied for 41st in the US Open two weeks ago, and his payout was $72,305. That's crazy. Anything been top of mind for. For you guys on the financial side, whether it's conversations you've had with clients or John, anything on the planning side that has piqued your interest over the last couple months?

I think on the planning side, once we have the plans built out, just continuing those discussions with the clients, that, hey, this is a real live document, and then we should talk about it annually or fluidly, just throughout the year, make updates as needed. And then once that plan or that baseline is set, if the clients have any questions or any big purchases they want to make, we can build out a scenario and just kind of lay it over that plan. I think that's a good point to bring up, especially as more people get closer to retirement. It's obviously very important to work with a financial advisor building out those scenarios and then. And then building out some stress scenarios, too, because obviously, the stock market's been on a great run since we had the off year in 2022.

2023 was a great year so far this year. It's been a great year, with the s and P up 15% so far this year. So it's always good to go back to your financial plan and build out those scenarios and those stress tests, too. Yeah. And I would say some of the stress tests that we recently have, we've had discussions about.

Maybe it's about buying a second home or downsizing my current primary residence, or, hey, can I spend more in retirement items like that? Or, like Cody said, could be some market conditions. Looking at those, too. Yeah. Especially since we're in the summer now going into vacation season, making sure that as we talk to our clients, that they know we have these expenses built in so they have the flexibility to go on the trips that they want, because as everybody knows, inflation still above the 2% target that the fed wants.

So everything is still expensive to do. The, you know, the vacations even just, you know, shopping is still expensive, even though inflation, as you just said, Cody, it is ticking down slowly over the months. And I guess the last year, it's starting to get down a tad. But the consumers still buying, they're still traveling. It doesn't seem like there's a whole lot of stuff outside of the norm that they're not doing.

Yeah, I mean, I think that's why inflation is still above the 2% target. So if we look back over the last year, so last year in June, the ten year treasury was at 3.7%. Now we're back above 4.25%. Even with the ten year treasury going up 0.5%, you actually have had a positive return on fixed income. And that's why it's so important to put that money to work, because you're getting the good dividend yield now.

And potentially when the Fed does cut interest rates, which obviously is a big discussion, if they're even going to cut this year, because inflation is above the 2% target, you'll also potentially see some bump up in principle. Have you guys had any clients call in and still, you know, asking about tech stocks and in particular Nvidia and how they're now, you know, the largest company? Do you have clients asking, what's my exposure? Should I have more exposure? Is it too risky?

You know, and how have you been handling those conversations? Well, definitely, I've had some, some clients call in and ask about buying some Nvidia, and I think that's important, first off, to always make sure that your financial advisor is accessible. So when you have those questions, you can go to them and ask those, those questions, whether it's buying it as an individual position or breaking down that the funds you hold. So I think that's what we've been going back to our clients inside of our us large cap position. Nvidia is the second largest position.

So they already have a very large position inside of their portfolio. But making sure that you talk them through that, because obviously, Nvidia has been the hot stock over the last 1015 years, especially the last couple of years. But that is the second largest position inside of our largest fund that we have on the equity side. So I think thats always important to reach out to your advisor and talk about whats my exposure and then talk about the potential downside if it does have a sell off just because its been so good. I saw a stat, I believe last week and it was kind of around Sean's point, just about the high concentration like Nvidia or Apple or Microsoft, all the, the big guys out there.

But specifically, Nvidia is either 2010 or 2011. If you invested $1,000 to, I think whatever the specific date was last week, it would have been like 240 some thousand dollar gain on that position. That's, I mean, just that growth in that, that 1012 year period is just astronomical. I did see, and I'm not sure how true this is. So take this with a grain of salt, that Nvidia is having problems with some of their senior engineers leaving now because when they started they got so many stock options and since the stock is up so much, they thought those stock options were going to turn into a couple hundred thousand, but now they're closer, like $10 million.

I saw a couple of people were pointing that out as a potential problem that Nvidia could have is a lot of their senior executives or senior engineers are potentially retiring because the video's done so well. It's a great problem to have from an employee standpoint, from an employer standpoint, that's, yeah, that's tough. Google went through something similar, like a couple years ago and they kind of had their rocket trajectory upwards that they, they had trouble keeping a lot of their, their senior staffers too. I think because of a similar problem. It will be interesting to see if that actually comes out to be a problem because, I mean, I'm sure if Nvidia wanted to say these senior engineers leave, I'm sure if they wanted to get other good senior engineers from some other companies, they would have no problem getting them.

It sounds like too, I mean, just like on the tech side and specifically on the AI side, that we're just starting to scratch the surface, the first or second inning of this, of kind of what AI actually is and kind of what kind of impact it can have in the long run. Yeah, it'll be interesting to see the impact that it has in all the different sectors going forward. I was reading an article too. They're talking about how like, AI is just really getting rolled out here in the states, in the United States, but it's just starting to get to some of the other nations internationally. So like, that's going to be a huge tailwind on international emerging markets exposure in the long term, too, I believe.

Yeah. Is there anything top of mind that you've been talking to clients about whether it's zooming out, looking at the longer term? There was an article here recently that came up that investing could or should feel boring. I mean, most great things are just a bunch of small, boring acts. Whether it be like we went and watched the Phillies this weekend and I'm sure it's pretty boring.

The amount of swings that Bryce Harper does and BP, it's not great. And he's breaking it down, but he's done it 10,000 times. Just like investing. It's just especially for younger clients, people trying to build wealth, it's a very boring process. Right.

You're just saving money. There's no fancy, do this, do that. It's just a really, really simple, boring process. And I think it's the same once you get closer to retirement, maybe just having a strategy and sticking to it and making adjustments along the way as needed. But it is not this big flashy thing that I think most people think it is.

That's a really good point, Sean. What you just having the investment strategy set and then sticking to that for the longer term, there's going to be tweaks that you're going to make. Whether it's getting close to retirement, you reduce stock exposure, or if we have a big downturn, you do some rebalancing, sell some of the bonds, go more into stocks to get back to your target allocation. But I think that's really important to stick to the strategy and make the adjustments as things change. Because, I mean, if you just focus on the last two months since we did our last podcast, think about all the news headlines that popped up, whether it's at the beginning of this year, the Fed was talking about cutting potentially three to four times.

Well, we're at the end of June now, and the Fed hasn't cut a single time. And now they're talking about maybe not even cutting this year. But yet fixed income is still positive on the year. Stocks are still up almost 16%. So zooming out and looking at the longer term may be boring.

Obviously there's going to be a lot of stuff in the intermediate term or short term that's top of mind. But looking longer term, it could potentially be boring. And honestly, we don't want to be trying to time the market. Sure, when there's a big swing up or down, you do some rebalancing, but we're not going to be like oh, we think there's going to be a 5% sell off, so we're going to sell out of the stock market. Those little sell offs are normal.

Yeah. I was also thinking, too. I mean, we hear so much about asset allocation, but just kind of thinking about the financial planning part of it. I mean, obviously asset allocation is super important, but also a lot of people don't think about like tax diversification. Say you work for 30 years and the only thing you contributed to is your 401k.

So basically you get to retirement and you need that savings. Every dollar you take out of that, say, Ira, you have a pretty large tax implication on that. So that's kind of why the tax diversification is huge too, in the planning. And I know as advisors we talk about that a lot. Could be investing in a Roth IRA or a taxable bucket and then all the different vehicles that we recommend in those different tax type accounts.

And the sooner you start, the more time you have for the compound interest to the upside. Yep. What do they say compound compounding is what, the 9th wonder of the world or something like that? Yeah. Yeah.

Anything else top of mind for, for you guys recently, whether it's on the investing side or planning side? Well, we're wrapping up the second quarter here of 2024. I mean, it's kind of hard to believe that we're almost at the end of June and July 4 is next week already. It's kind of incredible. But we're getting into the second half of the year.

I mean, we don't want to mention it, but we have to. I mean, upcoming election, as Cody and Sean mentioned, the interest rates, inflation kind of, there's a lot of, I guess, noise out there heading into the second half of the year here. So there could potentially be a good amount of volatility in the shorter term in the second half of this year. As you were saying, John, with the election, obviously is a huge impact inside of the US. Not saying it has a huge impact immediately on the stock market, but anytime you watch tv now, you see two political commercials every, every commercial break.

So it's just going to continue to pick up over the next four or five months till the election. As you were saying too, John, with the interest rates, seeing what the inflation numbers are as we get closer. So it'll be interesting to see what the Fed does. I see the interest rate front, too, like in real estate, I think the 15 and the 30 year. Cody, you might have mentioned it, it finally dropped down below seven mortgages, but I saw that the average fair market value of a property in the United States is an all time high.

I think it was like 419,000 they announced last year. Yeah, it's pretty incredible. That is kind of crazy thing about just the average house inside the US is now over over $400,000. Yeah. Plus, at a six to 7% mortgage rate, you got to feel bad for people trying to buy their first house.

Well, I think, too, it's a lot just on the real estate, it's a lot of people looking for the same size house. You have a lot of people looking to downsize, and you have a lot of people looking to get their first or maybe their second, but it's like they want a family. So trying to get into that family starter home, they just don't make them anymore. Townhomes, apartment buildings, and 55 plus communities, and that's about it. There's really not many affordable single family houses in the world.

And if you see a single family development being built, you'll probably see signs that says starting at 650,000, there's just a lot of people with the baby boomers, I think, downsizing and our generation looking to start families, everyone's competing for the same type of house, which they don't make anymore. Yep. No, that's a very good point. And if you read trends, people our age who maybe are putting off having kids, there's going to be just an abundance of vacant houses and apartment buildings because we're not having the kids. So there's a cliff coming.

I mean, it's a long way off, but maybe 40 years, there's a visible cliff coming down the pipeline of impacts from people our age not having children. Yeah, I was just going to say, too. I know, Sean, you mentioned looking long term on the real estate side, but, like, retirees, I mean, you always hear about, hey, we're looking to downsize now we're empty nesters. Like, I think for retirees. Yeah, they're downsizing.

Maybe the less square footage, but realistically, their downsized house is probably an equal price or more to what they're downsizing to, it seems like. Yeah. And they're potentially giving up, you know, a two to 3% interest rate if they have a mortgage left to either paying cash if you have the equity in your house, or getting a six to 7% rate. So I know that's why a lot of people aren't moving to. Yeah, that's a good point.

I think it's just to see how the quarter, the quarter wraps up here. Q 220 24. I mean, it looks like it's probably going to wrap up pretty strong, I mean, on the market side, but happen here in the next couple of weeks or so. Yeah, I know there's important inflation numbers coming out on Friday. The core PCE and regular PCE, which is the, as the Fed says, that's the number that they pay the most attention to.

The estimates are a 0% increase month over month, which would be great because the last reading we got was 0.3%. So if this drops all the way down to zero month over month, and I think the yearly number they're looking at is like 2.6. So inching closer to their 2% target. I was listening to a podcast last week and they're talking, the next Fed meeting is what, July I believe. Yeah, and there's a bunch of optimism that they might cut a quarter percent in July, but they said realistically it'd just be window dressing at this point.

It wouldn't be a huge impact if they did that just to calm everyone down, say, hey, we are in the right path. Yeah. Not to talk about politics, but that's the first presidential election on Thursday, which I know a lot of people will be paying attention to. That's all I have to say about that. It'll be interesting.

Yeah. Well, hopefully the Phillies continue to keep playing well into the summer season. See you guys next time. We hope you enjoyed this episode of coachable wealth, brought to you by Morton Brown Family wealth, an SEC registered investment advisor. This podcast is designed for educational and informational purposes and not in intended as investment advice.

More information can be found at www.mortonbrownfw.com.