What Are Your Top Concerns With The Market Right Now?

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.

Transcript:

Easan Arulanantham:

“What are some top reasons that you’re concerned or excited for the market now?”


Tom Vaughan:

Oh, okay. Well, top reasons I’m concerned: The supply of people, the shortage of labor. Even though we have a lot of unemployed people, plenty, they’re not coming out to work, so we basically have a shortage of labor. And so that creates a couple problems. First of all, companies can’t produce as much. And they’re going to start to miss on earnings and revenues. And then also, companies are gonna have to pay more to get what labor they can to come out. Or, to steal somebody else’s labor that is willing to work and pay more. And so those tend to be inflationary. Labor tends to be the most inflationary piece, because almost every company needs labor to operate. And then once you kind of increase pay, often it doesn’t go away, it doesn’t go back down. It has happened in the past, but not very often. So that’s the I would say labors of concern. And then, of course, the supply chain would be another concern. I think just, we got to have semiconductor chips, Ford need semiconductor chips to make F150s. So, unfortunately for car manufacturers the semiconductor chips that they make are lower cost, which means lower profit. And the companies that are making chips, are making the other chips that are higher costs and higher profit, and so this might take a little while to work its way out.

I think both the labor and the supply chain issues work their way out. But they have been a little bit more persistent than thought, and even the Federal Reserve has mentioned that they think that the supply chain issue is more of a persistent problem than they thought. So we’ll see how that plays out. The Federal Reserve, cutting back on bond purchases and ultimately starting to raise rates, it will not cause like a massive downturn, in my opinion, it’ll cause volatility. It’ll cause you know… if we were gonna make 15%, and they started to do that, we might make 8% or 10%… it creates a sort of like a headwind for the markets as far as that goes. So those are kind of the… bigger thing.

Now, what’s positive, look back. Go back to 1955, look at the Federal Funds rate, and look at how many big downturns happened during periods of time, when the interest rates were very low or zero, and that was none. And the big downturns have come after lots of upturn. So for example, the last big downturn that happened in 2008, happened after 21 rate increases. We haven’t even had one, so that’s a huge positive. It is the number one thing. It will overcome all of those supply issues. It’ll at least keep the market going sideways, if not up. And so I think that’s really, really important. And that it really, I can’t emphasize that enough. I’ll give you some other reasons that I have that I like, but that’s the number one piece it always has been. It’s it’s I think it’s a very strong thing to watch very closely. But the other things I think that are very incredible are, just how much demand there is, in total. As people come back, there’s all of this pent up demand. And whether it’s for housing, which is doing quite well together, or for travel, which is starting to pick back up. And there’s just and we’re still scratching the surface.

There’s a lot of people still sitting around waiting for the virus to get better, or what have you to. And as that starts to get better and better and better, I think that’s great. And again, I guess another positive I look at is look at the charts, by county, by state, nationally. And for the most part, what we’ve seen is a really big turnover on the virus case counts. They’ve come down, and have started to come down quite nicely actually. And so that if that comes down and as able to stay down for a period of time, that could be quite explosive on the demand side. So you know that those are the things they see as quite positive. And good companies will find a way to get the people on the supplies you watch. And so it really the cream’s gonna rise to the top here, in my opinion. You’ll see a really, really good scenario probably coming out of this. I think that the positives outweigh the negatives at this point in time. The debt ceiling is such a huge issue, that when it comes in on the negative side of the scale, whoosh, it just runs, you know, runs it down. And so that’s why that’s important. That’s why we made some defensive moves there. But at the moment that’s taken off the table. So I won’t put that as one of my main concerns right now. Maybe we’ll see what happens later.

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.