From Insight to Foresight: The 2025 Recap & 2026 Market Preview Webinar

Pure’s Executive Vice President & Chief Investment Officer, Brian Perry, CFP®, CFA® charter, AIF®, and Senior Investment Strategist & Financial Advisor, Brian Fahey, CFA, provide you updates on the economy and financial markets, as well as insight into what the new year might hold. 

Outline:

Transcription:

(NOTE: Transcriptions are an approximation and may not be entirely correct)

Kathryn: Welcome, everyone. Thank you for joining us for this from Insight to Foresight, the 2025 recap and 2026 market preview webinar with Brian Fahey, Senior Investment Strategist, and Brian Perry, Executive Vice President and Chief Financial Officer. If an advisor is not yet helping you to make the most of your finances.

Now is the perfect time to schedule a free assessment with a Pure Financial professional. Without further ado, we have Brian Perry and Brian Fahey. Welcome to the Brians.

Brian Perry: If you’re in doubt. He’s the smart one. I’m the one that sounds like I swallowed a frog. We are going to cover a number of things today, including what happened last year in a really interesting year in the financial markets.

A lot went on, and it turned out to be a pretty darn good year, although there were moments along the way where. I’ll bet none of you would’ve been thinking it’s a pretty good year. Don’t have to think back too long. It was last March, April, in the spring where markets were in free fall. I remember standing in front of these cameras with Joe Anderson, and we did one of these.

And during the course of that presentation, the market rallied about 15%. So, certainly an interesting year with a lot going on, and let’s cover some of it as well as what it may mean for next year. For starters, let’s dive into a year of extremes. So Brian, talk to us a little bit about what happened last year.

What, what did we wind up with? And at the end of all this mayhem, it turned out to be a pretty good year, right?

Brian Fahey: Yeah, it certainly did. Brian, you know, the S&P is up about, call it 18% year to date. But really, the star of the show was foreign exposure. So whether you’re looking at Europe and developed Asia, which is the MSCI EFA up about 28% or em up 30.

That international exposure is really what helped drive diversified portfolios this year. But after we got through the, the tariff back and forth there in early April, it was basically more or less a stray line up from there.

Brian Perry: Yeah. And interesting because not only did as you can see here, bonds represented here in the Bloomberg US ag.

Those are investment-grade bonds, high-quality, and then the high-yield. So a little bit lower quality, but higher returning bonds, both really good years. If you can get seven or 8% on bonds, well, heck, who needs stocks, right? Except you had stocks up anywhere from 13% to 30%. You know, last year was the first time, and we’ll circle back to this, but the first time in quite a while where you saw US stocks do really well, and yet international stocks trounced them and doubled up the return.

So hopefully all of you out there. Had some international, some global exposure last year. Let’s talk a little bit about some of the lessons we learned or some of the key takeaways from 2025.

Brian Fahey: Kind of goes without saying, ’cause we’ve lived through quite a few events in the last, call it five years or so.

But these types of corrections are, are pretty normal and an average year you’re gonna have. On average, about one 10% correction, meaning the S&P is gonna drop by about 10%. That’s what you should expect. You know, your equity exposure’s gonna have roughly that level of volatility, year in and year out.

But I think one of the bigger, interesting pieces of, of how the market and economy developed this year was there’s a lot of sentiment data out there that, and headlines related to that, that suggest that consumers are really struggling. And not to say that that isn’t the case for, for some folks, uS consumers are still spending and that’s helping keep the economy going. There’s been a ton of headlines about a lot of layoffs happening across the economy, but we really aren’t seeing that in the job data to the extent we have it. Obviously, we had the government shutdown that’s clouded the picture a bit, but it’s really hard to find substantial weakness in the, the labor market.

And corporate America always finds a way to turn a profit, was able to deal with inflation, tariffs, rapid changes in tariff policy, and international relations. All that kind of stuff didn’t really matter. We got really solid corporate earnings pretty much across the board, whether you’re looking at large US tech companies or even maybe smaller energy companies, everybody did better than Expecta expected this year.

Kind of impressive.

Brian Perry: Yeah. You know, and one of the takeaways that’s not on there, but I think summarize that really well is there’s an old saying that markets climb a wall of worry. And you know, we say that often, it’s been a colloquial on Wall Street for a number of years, but the reality is, when people are worried, it winds up that the world surprises us, or company surprise us at the end of the day.

What you’re really looking for are profits, and we’ll talk about that is our company’s gonna continue to make profits and if so, you know, stocks generally continue to go higher, bonds do okay, et cetera. But certainly, there was a lot of worry this year. There was a proverbial wall of worry and, and markets climbed it.

The, the time to really worry as an investor is when you wake up and all the lights are green and the birds are singing and the sun is shining, and you look around and say, you know, there’s really nothing about the economy or the market I’m worried about today. It’s probably a time to start selling outta some of your positions, but last year certainly a lot going on and we wound up with a pretty good year.

But I guess at the end of the day, and I just kind of alluded to this, but Brian, why is the market doing so well?

Brian Fahey: Earnings, you know, as an equity investor, what you’re buying essentially is future earnings. And if you look at this chart. They’re through the roof. And I think what’s important to notice here is the, the slope of the line of area earnings.

This is for the S&P 500. You know, coming out of the financial crisis, there wasn’t a lot of growth. It was fairly s. It was growing, but not at a steep rate. And we had a bump from tar tax cuts. Then we had COVID. That’s the big dip there. And ever since, earnings have just gone at a pretty healthy pace, growing at about twice the rate that we were used to after the financial crisis.

You know, as an equity investor, that’s what you’re buying. The faster that line is going up, the more you should expect your stock portfolio to appreciate. So even though equities are, you know, maybe not quite at an all-time high today, they’re pretty darn close. There’s earnings to back that up. This isn’t just smoke and mirrors us corporations are making a lot of money, and as an equity investor, that’s what you’re buying.

That’s why stocks are as high as they are.

Brian Perry: And a lot of times, you know, the companies don’t need a good economy in order to make money. But, but it certainly doesn’t hurt, right? If people have money to spend and I am Coca-Cola or Walmart or something, I’m probably gonna sell more stuff. And so let’s talk a little bit about the US economy and what it’s doing right now.

And I, I know that, and, and you’re probably gonna touch on this. Some of this is guesswork, right? Because for a while there, with the government shutdown, we actually didn’t get any economic data. And so there’s an element of us guessing as what the heck is going on in the country. Is that correct?

Brian Fahey: Yeah. So we’re missing about two months’ worth of employment data.

That’s why we have the a DP employment report up here instead of the US Labor Department numbers, because they don’t exist, they’ll come out next week. So this is a, a proxy for the labor market, but it’s not as good as what the US Labor Department actually produces. I think the key takeaway is labor market is new.

Jobs have slowed dramatically, but they’re still growing at a, probably enough to keep the labor market stable. And as long as the labor market’s stable, we should expect consumers to continue spending. We were used to call it 150,000 new jobs per month, but with the policy changes on immigration that we’ve experienced this year, maybe even some net.

On net, people leaving the US, we don’t need quite as many jobs to keep the labor market in balance. What that actual number is, is guesswork. We’re not really sure. Maybe it’s 10,000, maybe it’s 60,000. It’s probably somewhere in the middle, but that’s roughly where we’re running on a call it three month trend

Brian Perry: may maybe.

Let’s stay on that last point a bit because. I hate saying this time is different, and it’s never different. Right? But there are some substantial changes going on around immigration policy, tariffs, and stuff. Or is it too soon? Or can we say, what is the net effect right now of some of these changes in policy that we’ve seen for many years of globalization, immigration, free trade, and a lot of that reversing, is that a net positive, a net negative for the economy?

Too soon to tell?

Brian Fahey: Yeah, definitely too soon to tell. So, you know, I think the labor mark’s a good view in there. Like I said, we’re used to seeing about 150-ish thousand new jobs a month and needing that because you had new employees, new people coming into the US economy that needed jobs. But we just don’t have that much immigration now, so we don’t need as many new jobs.

Things are keeping roughly in balance, you know, like we showed on previous slide, corporate America is doing fine with the, with tariffs coming online. The labor market has been able to adjust. I mean, there’s always a certain amount of churn in the labor market. You know, we’re seeing job losses in manufacturing.

We’re seeing some job losses in tech. We’re seeing job losses in trade. But we’re seeing healthcare do okay. We’re seeing local governments do okay, so people might be rotating outta one industry to another, but on net, the overall labor market appears to be healthy.

Brian Perry: Well, we’re in an interesting world, right?

Where we’re worried about the job market and some of these policies, are they gonna slow the economy? And so on the one hand, you say, hear people, well, what if the economy slows down too much? But the other side of it is, what about you know, will people keep spending, right? But we don’t have a slide for it.

But what about inflation? Right? Because people are also worried about, is inflation running too hot? And we’ve come through a period after COVID of higher inflation the way we’ve become used to for many years. And so you have this mix in between, is the economy too strong? Is the economy too weak? Is it growing?

Is it weakening or nirvana, right? Is it just right? Do we get the Goldilocks of enough economic growth to produce corporate profits and jobs, but not so much that you stimulate eco the economy to the point where inflation increases. We’ve got a Fed that’s lowering interest rates. Are we hitting that goldilocks moment where the economy is just dry?

Brian Fahey: The, the Fed is meeting right now and they come out with what’s called the summary of economic projections. So that’s what all the Fed Governors think the economy’s gonna look like over the next year, and they’re predicting Goldilocks. So we have another slide up that’s showing what group. US growth should be like what inflation should be like, what unemployment should be look looking like, and their numbers are a little bit better than what consensus is, so we should be just fine.

You know, the Fed is predicting more of a goldilocks scenario where unemployment stays steady, and the economy grows a little bit faster than expected, which is a great environment for stocks. It means a little less inflation, and everything should go just fine.

Brian Perry: Brian, let me stop you there, though, because that’s what the Fed is saying.

But I don’t know. Are they just a bunch of people in their ivory tower? Right. And a bunch of Wall Street people talking about Goldilocks and stuff. ’cause this slide is messy and it’s hard to read, right? And there’s a lot of ups and downs in pink areas, and this and that. But the takeaway is this is consumer sentiment.

So this is, how do I feel? How do you feel? How does the average guy or gal on the street feel? And the reality is, they feel awful. So how can we have this where the Fed is telling me how great things are, but my neighbor’s telling me things are really bad? Who do I believe, and why does my neighbor think things are not going well?

Brian Fahey: Yeah, I mean, quite honestly, I think this University of Michigan consumer sentiment is basically broken. There’s a lot of partisanship in the data. You know, if you’re leaning towards the democratic side, you think the economy’s in the toilet. If you lean the other way, you think the economy’s may be a little bit better on that.

You know, we’ve got numbers that look like we’re in a financial crisis. Yeah. But unemployment is, call it four and a half percent. You know, people feel worse about the economy today than they did during the financial crisis when unemployment was double digits. So the numbers have looked bad for a while.

Honestly, the way I view it is that people hate inflation. That’s the takeaway. You know, your job, maybe your income isn’t rising as quickly as your living expenses, and you feel the pinch. I know I do every time I go to the grocery store, having three kids, and I think that’s really what we’re looking at here, is it’s more expensive to live.

Maybe salaries aren’t keeping pace with the job market; it’s a little tighter. It’s harder to move to maybe a better-paying job. Got some numbers on that in the Jolts report yesterday, the job openings, labor turnover report. I think that’s really what you can take away from this slide.

Brian Perry: And here’s what we’re looking at for next year, right? Is this again, gets back to, I don’t know if this is Goldilocks or what this is, but this sounds pretty good. This number here, and maybe you can talk about it a little bit, seems like a convenient guess. I, I don’t know if you can see me pointing at it, but the S&P but, you know, 2% GDP growth, give or take, that’s maybe average, maybe slightly weak, 2.8% inflation in line four point a half percent unemployment S&P up a couple bucks.

What do we think? I mean, are these numbers worth the paper they’re printed on, or are we just wasting breath talking about these estimates?

Brian Fahey: Yeah, we’re basically wasting our breath because moving on. Yeah. Nobody can predict the future with certainty. Right? Especially 12 months out. You know, usually you wanna look at it like, I can get a pretty good guess on where things are headed over maybe three months, but 12 months, unexpected things are gonna happen.

You know, especially when you look at price targets on what we have here, is the average analyst with a consensus estimate. Analysts are pretty good at expecting where corporate earnings are gonna be, call it roughly plus or minus 6%, and that includes things like COVID and the great financial crisis.

If you just throw that out, analyst assessments are usually within 2%, which is pretty darn good, but what analysts are terrible at is how much are investors willing to pay for those earnings? So they might be able to estimate pretty much closely how much corporate America is gonna earn, but they’re terrible at anticipating how much investors are willing to pay for those earnings.

Brian Perry: Well, lately investors have been willing to pay quite a lot for that, those earnings. And so let’s talk about that. And one of the big drivers, I can’t remember the last time I pulled up the financial news, and one of the top three stories wasn’t around AI. Right. And I don’t think there’s any doubt that AI is going to change the way we live in a similar way, and perhaps even greater than the way that the internet changed the way that we live.

It’s here to stay. It’s not going anywhere. But what impact does that have for investors over the next 3, 6, 12 months, a couple of years? Let’s talk about that because that’s really been one of the big drivers of the market. So let’s talk about some of these expensive AI stocks and whether or not these valuations are justified.

Brian Fahey: Yeah, the bubble conversation pops up in almost all my client meetings. We’ve written a lot about it on the website. There’s a decent amount of information there, but one of the big reasons why investors are worried about a bubble is just the massive amount of infrastructure that hyperscalers, the people that are actually building the machines that allow AI to work how much they’re spending.

So next year, this is some data from a Goldman Sachs report. These five companies are estimated to spend about $432 billion on AI infrastructure. So just outta curiosity, Brian, can you think of a global country whose GDP is about 430 billion?

Brian Perry: I can, but only because you and I talked about it beforehand, but, and so just so people know, GDP, it’s, it’s how big is the economy?

And so these five companies next year are anticipated to spend as much money as all the hundred and whatever million a hundred and something million citizens of Malaysia are expected to spend. Right. So that is a lot of money.

Brian Fahey: Yeah. I mean, putting some context on it for numbers as big as 430 billion, I think, is important.

But you know, keep in mind, and the slide points it out, before OpenAI came out, companies were still spending a decent amount on, on infrastructure. ’cause that was, that also includes things like cloud services. They’re still spending about 150 billion, still a real number, but to take it up to four 30, that’s pretty intense.

And what investors are worried about is this $430 billion worth of investment for just next calendar year, what kind of economics is that gonna generate? Are these companies gonna be able to generate sufficient income to justify the expense? And that’s an open question right now.

Brian Perry: What I think is really important to me, and I have no idea in the long run if these will turn out to be good investments or not, as far as the $400 billion that these companies are putting to work.

But as large as these numbers are, these are amounts that the companies actually have to spend. So there is a little bit of debt financing going on for some of this, but a lot of this is from cash flow, cash balances, and stuff. Because the companies that are making these investments, right, the Amazon, Meta, Google, Microsoft, Oracle, and so on, are among the most profitable companies in history.

And so these are companies. That actually have these massive amounts of money. They look around, and they say, what can we do with that that we think is productive? They’ve judged that pouring it into AI infrastructure is the way to go. Whether or not that turns out to be the case is, is still to be determined.

But these are companies that are beginning at least from a very, very solid financial position. And the reality is, in the long run, let’s say that AI turns out to be a big waste of money, and all the hundreds of billions of dollars that Microsoft spends on infrastructure is just a waste. You’re still going to use Word and PowerPoint and Windows and so on and so forth.

So Microsoft still has thriving businesses. My kids are still not gonna get off the Xbox. They don’t care. Right. Even if this money is wasted. So Microsoft is still going to generate huge amounts of profits to replenish the coffers or the money that they’re spending on AI infrastructure. Isn’t that right?

Brian Fahey: Yeah, and we wrote a little bit about this in one of the recent blog posts, but Meta, which is considered outside Oracle to be one of the weaker of the hyperscalers of the names listed here, they’re still gonna add to their cash pile next year, is what analysts expect. So they’re spending all this money, but their savings account essentially is still going to grow, and people are still gonna use Facebook, and they’re still gonna sell ads and Google’s still gonna sell ads on, you know, Google and all the different services that they offer, whether it’s YouTube or some of the other stuff.

In context, spending this amount of money for companies that are as stable and profitable is, is what we’re looking at here. It’s justifiable. We’ll be irritated if they push all these chips to the center of the table and then set ’em on fire. Yeah, but it’s not gonna put anybody outta business. It’s not like that.

Brian Perry: So they’re gonna spend $400 billion and see their cash pile grow. That’s a pretty good place to be in. Brian, I don’t wanna make you go out on a limb, but can you guarantee everybody on this call that if Pure invests their money, no matter how much they spend, their cash pile is going to grow? Yeah. No, no.

All right. Well, that’s probably the right answer from a compliance perspective. All right, let’s talk about valuations, because that’s the other point, right? How much are these companies making, but how expensive are they? And a lot of times over here we have today, and then we have the tech bubble, right?

And so are these companies in a bubble? How do they compare to the 1990s? Let’s talk a little bit about that.

Brian Fahey: Yeah, so just to be clear, the, the PE ratio is basically a, a ratio that’s supposed to give you a quick and dirty sense of how expensive a particular company or an index is. So the higher that number is, the more expensive that company is relative to its earnings.

We tweaked it a little bit for this slide, and what we’re looking at is the forward pe. So the amount of money that analysts expect these companies to make over the next two years. Use that number because that’s. Really trying to capture kind of the hopes and dreams of the analyst community. So if they’re totally out in left field, this number should be ridiculous, which is exactly what you see on the right side, where you’re looking underneath the tech bubble.

So Microsoft, during the peak of the tech bubble, had a two-year forward P of 53, just pretty darn high right now. Still one of the more expensive stocks in the S&P, but for good reasons, like we talked about, they, everybody’s gonna use Microsoft Suite. And they make a lot of money doing that. So today they’re trading in a Ford PE of 26 or about half of where they were during the tech bubble, the peak of the tech bubble.

So for all the bubble talk that we’ve heard and read and listened to over the last handful of months, and this seems to pop up roughly every six months or so, things are expensive relative to history, but they’re not bonkers like they were during the tech bubble. Roughly half of where we were relative to the tech bubble.

Brian Perry: Y you know, I think there’s, there’s one other takeaway as we look at this that occurs to me and, you know, we’ll, we’ll certainly meet people and maybe some of you out there are in a situation where you have a lot of your money in one stock or a couple of stocks, and, and all likely, if that’s the case, it’s one of the stocks on the left hand side here, right?

That’s done really well. And it’s like, Hey, why don’t you just pile into, you know, pick a stock. And the reality is that if you’ve done that, you’ve made a lot of money. But think of it again, you could, we, I don’t think anybody disputes that tech is a great sector in that it’ll probably continue to drive the economy.

Look at the biggest tech companies back in the bubble, and then look at the list of the biggest tech companies today. There’s only one company that is on both lists, right? That’s Microsoft. And in between, the stock fell 90% and took a decade and a half to recover before it started going to new highs, right?

And when you look at a lot of these companies in the last tech bubble, which wasn’t that long ago. NVIDIA wasn’t around. Apple was much smaller. The iPhone hadn’t been invented. Heck, the iPod hadn’t even been invented. Alphabet wasn’t around. Amazon was just getting going. Meta wasn’t around. Tesla wasn’t even, you know, on the horizon.

And so technology changes so quickly that, whether it’s AI or anything else, it’s one thing to say AI is going to change the world. And, I don’t think that’s disputable. It’s another to say company A or company B is going to be the, the winner in that space. And I always go back to the thought that for anybody here in San Diego that maybe sat on the I5 freeway on Friday for hours on end, I know I sat there, took me an hour and a half to go one exit up in Del Mar.

I think we can all agree that cars have been a pretty successful industry. The auto industry has thrived in the last hundred years. During that time, there have been 3000 automakers in America, right? So a hundred years ago, you could have said, Hey, autos are gonna change the world. Everybody’s gonna drive.

And you would’ve been right. But out of those 3000 automakers, only two have never gone bankrupt. Right? And so picking an industry and saying AI or tech or this or that is gonna do well. And then picking the winners is never as easy as it seems, right? For every Google, there’s a Netscape or an AOL. For every Meta, there’s a MySpace or whatever, right?

And so just ’cause a company is an early leader in a hot, evolving industry doesn’t mean it’s going to be the long-term winner, which is why we preach. A level of diversification. You don’t have to be completely diversified. You can have a few bets, but we want to have some level of diversification to protect against the unknowable future.

Where is the froth though? ’cause there is some, you know, as we shift gears a little bit within tech, there is some bubbly aspects, right?

Brian Fahey: I mean, we just talked about PE ratios. So those are companies that actually have real earnings. This is an index of tech companies that have no earnings, and this year they’re up at one point, they’re up about 75%.

So these are your lotto tickets. Handful of them. One or two of them will go on to be really successful companies, and maybe at some point, they’ll be on one of those lists like what we just showed. As of now, it’s a lotto ticket, and that’s where the froth has been this year. You know, we’ve given a little bit of it back in the last handful of months, but still looking at about a 60-ish percent return on this particular index, which is again, companies that do not have profits, they don’t have actual earnings.

Brian Perry: Let’s take a pause there before we move on, and Catherine, do we have any questions?

Kathryn: Get out your crystal ball. What would you say about someone asking the expectation for a market correction in the future with a projection on when it might be?

Brian Fahey: About 10% every year.

Brian Perry: I’d say when it might be. I’m thinking January 22nd at around one 30, maybe two o’clock Eastern. You’re so funny. I don’t know. I mean, there are a lot of things. Look, anytime, I mean, to Brian’s point, first of all, every year in general, markets fall at some point, right? So I’m pretty confident that at some point next year, markets will fall.

Two, you’ve got valuations that. Or full, right? I, I don’t know. I don’t think we’re in a bubble. You can argue whether we continue to go hire, we very well could. But anytime prices are relatively full, you could see a correction, then there’s a lot of unknowns out there and a lot of noise and stuff.

Something could certainly upset the apple cart rather than trying to predict the exact timing. What I would do is I would step back if, if I was the questioner or really anybody on this call and say, alright, what am I trying to accomplish with my finance? All right. Run a financial plan. Talk to your advisor or go through, if you haven’t already, go through the free assessment process Katherine mentioned.

We can, we can take a look at your finances and say, okay, what rate of return do you need to meet your goals? And then what is your overall mix across all your accounts, your 401ks, your IRAs, your non-retirement accounts, and see are you taking an appropriate level of risk and do you have an appropriate expected rate of return in order to meet those goals?

And then what sort of risk is in that portfolio, and can you live with it and know that at some point the stocks in your portfolio are probably gonna fall 30%? Do you have enough safety? Do you have enough fixed income? Do you have enough cash, et cetera to support your portfolio, your lifestyle, or your cash flow needs?

If the stocks fall 30% to give ’em time to recover, what tax moves will you make? Will you tax-loss harvest at that point? Will you accelerate Roth conversions to convert shares while they’re down, like a lot of our clients did back in the spring with the tariff tantrums? Will, how will you rebalance to maintain the same risk profile?

That’s what I would focus on, because I don’t know the exact timing of when it’s gonna happen, but I know it will. And so it’s preparing at a time of relative calm so that when the seas get choppy, you’re ready for it.

Kathryn: Someone’s asking what, well, how does someone get diversified in all those different, in a bunch of different categories, whether it be just tech and all the others.

Is there a basic mutual fund group or an ETF, or is it a bunch of different things?

Brian Perry: Yeah, I mean, the short answer is probably a bunch of things. Again, it gets back to what is the right mix for you, because there’s no one mix. That’s for everybody, right? The majority of people, not everybody, but the majority of people should have some mix of stocks, bonds, maybe some cash, maybe some real assets, et cetera.

Maybe some alternatives. Some people might want mutual funds. Some people might want ETFs. For some people, it might be individual stocks, bonds, or whatever. So the exact way of constructing the recipe, if you will, is going to differ for everyone. And that’s where you either need to do your research or consult with a professional.

But before you stand on that exercise, you wanna make sure you’re making the right recipe. And that gets back to starting with the financial planning to make sure that you’re building a recipe designed to achieve the, the menu and the outcome that you want.

Brian Fahey: All right, this is the time of year when all the analysts come out with their market forecast and what they think is gonna happen over the next 12 months.

The joke is, all of it’s gonna be wrong by Martin Luther King Day, which is the second or third week of January. And I think that gets to Brian’s point, where nobody, no matter how much money, time, and energy you’re spending on trying to forecast the market, nobody can tell you exactly where it’s gonna be and what unexpected things are gonna happen.

That’s why they’re called unexpected. So, having a plan that helps your money work for you. Rather than the other way around is really the first place to start. Take as much risk as you need to meet your goals, and you know, if you’re comfortable, take a little bit more, but you don’t have to. But you really have to start with a good financial plan to make sure that your assets are placed in a way so that next time we do go through a 20, 30% decline, it doesn’t feel like a punch in the face.

Brian Perry: Exactly. And, if you haven’t already done this, like I, if you take one takeaway from this, and this is if, if you’re a pure client, you’re hopefully, undoubtedly talking to your advisor about this already. But if you’re not, if you have one takeaway from this, it’s that in many, many instances we’ve had a phenomenal bull market, obviously with some volatility and 2022 COVID.

This past spring, there’ve been sell-offs, but markets have done really well in the last decade, and that tends to lead to people taking on more risk than either A, they know, or B, they’re comfortable with, because they feel like it’s gonna be okay. This is the time to reevaluate. What is it you’re trying to accomplish?

Run a financial plan. Right. Go through our assessment process, talk to your advisor, whatever it is, figure out what you’re trying to accomplish, and then look at the risk in your portfolio and be honest with yourself, right? Not, oh, yeah, I’d be fine with that. But how have you reacted in past sell-offs, right?

When the market was down, did you buy? Did you hold? Did you sell? What did you do? And then how has your life changed since that? Right. It’s one thing to say, Hey, in 2008 I held on. But you are 45 years old and in your prime earning years and saving, you’re retiring next year, you’re probably gonna react very differently a year out from retirement than at 45, right?

So consider your circumstances and be honest with yourself about how you might react. And then now is the time when markets are good to reassess your risk profile. It could be that it’s just fine. It could be that you need to take more risk, you’re not aggressive enough. It could be that you need to take less risk.

But figure that out now while times are good, rather than waiting till the stuff hits the fan and then reacting. Right? You wanna be proactive, not reactive.

Kathryn: Do you wanna make any comments about the current US administration and the social security feature futures?

Brian Perry: Yeah. And then if we were doing this live, you could all start throwing stuff at us.

’cause no, I’m, I don’t know, Brian, you can take that. I’m not a sucker. I will say on social security, we’re not particularly worried. Worry isn’t the right word. We don’t believe social security’s going away. I mean, the number one job of every politician on earth is to stay in power or get reelected.

Mm-hmm. The fastest way to get out of office is to take away people’s social security. We don’t see that happening. In the past, when there have been any changes to social security, it’s been with a really long lead time, like 15 years or something like that. So anybody approaching retirement age or already in retirement I, I don’t see a scenario where their social security’s meaningfully impacted in the foreseeable future.

Agree.

Brian Fahey: When I read papers about what to do to fix social security, like the, the really wonky stuff with a bunch of numbers in it, I’m always surprised by how small the changes need to be made to kind of write the ship. You know, like doing away with a cap on social security contributions on your income.

You know, there’s a just a handful of pretty small changes that I don’t. There’s just not a lot of political will to get ’em accomplished today, but I don’t think there’d be meaningful changes in, in aggregate over time to individuals, but could really help fix the situation. So, for as much negative press as there is out there, and you know, I do get this question on a semi-regular basis.

I think with Brian on this one, it’s gonna be just fine. There’ll be some changes when there has to be changes. We’re just not to that point yet.

Brian Perry: Let’s, let’s move on a little bit and talk about some of the international markets, because I think this is a key slide that, as popular as AI has been and as popular as some of the AI stocks have been, it’s not the only game in town.

And we started really early in the presentation, talking about how well international stocks have done, and you know, if you look going back to 2022, so in the last three years, you’ll, at the S&P, just stripping out Nvidia, just that stock’s a little bit of an outlier. And then you throw in Japan and Europe.

Well, Japan and Europe have outperformed the other 499 stocks in the S&P in the last three years. And then if you look at other baskets, you can look here. You take European aerospace and defense stocks have done phenomenally in the last three years. Taiwan tech companies. US growth stocks are the ones in gray, and they’ve been the darlings of the ball.

But they’ve been outperformed by Taiwan technology companies, international banks, European Aerospace, and defense. Indian consumer discretionary companies have also done well. So, point being that while AI or US growth stocks are a thematic trade and they’ve done really well, there are other thematic trades that have also done well.

And again, circling back to for the first time in several years. International stocks have really done phenomenally this year, and in the past, you’ve gotten these long periods during which either US stocks or international stocks have outperformed, and we happen to have come through one, or we’re in one of the longer phases of US stocks doing better.

That shifted this year. We’ll see if it continues. We get a lot of questions about the dollar and is the dollar going away? And our view is that the dollar is not going away. It will continue to be the world’s preeminent currency. But it did soften last year, and it could very well continue to soften.

All else being equal, a slightly weaker dollar is actually good for us investors owning international stocks, it increases your returns. International stocks are also a lot less expensive than US stocks, and in a lot of cases, they have seen their profits grow as well. So I think you can continue to see international stocks do well in the years to come.

And we do think it should be part of a diversified portfolio for sure. Let’s we talked about this a little bit and this is just a graphical representation of something Brian f was talking about as far as how in an ordinary year the gray bar represents how the S&P did in the year. The red dot represents the low point in the year, and you can see that during almost every year, most of these gray bars are up.

So most years, about 70% of the time, stocks are up, but you can see in almost every year you had a decline. On average, about 14%, even though in 34 of the 45 years returns were positive. And so keep that in mind. If you’re looking at the market, stocks are only up about 53% a days. S,o for tomorrow, is the market gonna be up or down?

I don’t know. It’s a coin flip. But if you look at years, it’s about 70, 75% of the time the stock market is up. If you stretch it out to decades, it’s 90% plus. So time as an investor is your friend, which gets back to setting that allocation, figuring out the right mix, the right approach, the right strategy that you can stick with, and then let time be your friend.

Let that rising tide lift, not just all boats, but lift your boat as well. Brian, you want to comment on the S&P? Talk about that a little bit.

Brian Fahey: Yeah, we’ve had a heck of a run, you know? That’s it. Eric, can you add Yeah. That’s all we got. It’s been that’s all we got. Great run. You know, especially kind of going back a couple of those slides, one of the things that I think is, is interesting to me is there is a slide in there showing international de developed market banks outperforming US growth over that timeframe.

International developed banks. That’s a, a trade that’s been popular for like a decade after the financial crisis, and now it’s finally coming to life and it’s outperforming the thing that we can’t stop talking about, you know, in financial press and with a lot of client conversations, which is US growth.

So I think the, the takeaway there is, you know, you’ve got a really steep line of the S&P pushing all time highs and, and really accelerating its growth. Under the covers, you’ve got a lot of different themes that have come and gone over that timeframe, and trying to pick which one’s gonna be the next hot one and when it’s gonna flame out or, you know, whatever might happen is probably largely impossible.

So owning a, a large diversified basket of stocks that makes sense is probably a much better way of going about it than trying to pick the next ai darling. One of the things to keep in mind is this is for dollar-denominated investors, and the dollar was down roughly 10% or so this year. So a lot of the gain that you have, especially for developed market equities, is really just in line with what the US has done.

But you got that 10% bump from the dollar weakening. It is great to see emerging markets finally show some signs of life. ‘Cause they haven’t really done much up until this year. So seeing them. Pivot away from being, you know, at one point, people were talking about China being uninvestible. It’s a large part of this EM index.

I think it’s like 30, 40% of it to see other growth engines in equity and global equity markets come around. Other than US, tech is a good sign for healthy global economy, which is, you know, what we all should hope for.

Brian Perry: And just one thing to point out as well would be this one here, the what is it?

The purple is essentially developed. It’s the S&P of Europe, Japan, Australia, et cetera. If you looked at small and value companies, so a little bit in the international space, but smaller value companies, some of those are up 40, 50% this year. So, there are pockets of international markets in general.

International markets do well. There are pockets that take even better. So really, really good year for international investors. Again, partly due to the dollar. But some of that dollar is reversion of the mean because for a couple years prior, when the US outperformed internationally, the dollar was hurting those international stocks.

So some of that is, is a little bit of a reversion of the mean. Speaking of the dollar, you know, this is just a chart, and again, we don’t think the dollar’s going anywhere. Really, the takeaway here is over the last five years, if you look at where the dollar is today. Roughly in the middle of its range, right?

We were at highs here in 2022, fell, and then some volatility. We fell this year, and now we’ve been going sideways. So again, the dollar could go up, it could go down. I don’t think it would be a bad thing if it continues to soften. There’d be winners and losers just like with anything else. But if you think the dollar’s going away, then what’s gonna replace it?

There is really no currency that you can use to replace the dollar, right? The Euro has its own issues. Japan has its own issues. Britain and Switzerland, et cetera, China’s currency is, is a popular one for people to throw out. China’s currency isn’t even freely tradable. So if you’re gonna replace the dollar as the foundation of the international financial system, I think a first prerequisite would be that the currency needs to be tradable and the Chinese currency is not even tradable.

So, let’s talk about one of the year’s darling’s gold, right? And Brian F, do you want to take this one? We can talk a little bit about the Dow Jones being blue. The gold being orange, right? How they’ve done over the long, long run since 1915. I mean, gold did great this year, but what does a long-term track record look like?

Brian Fahey: Not great relative to, to equities. You know, gold is kind of, it’s certainly a store of value. A lot of central banks are, are buying it. Now, that’s probably a big reason why you’re seeing the, the rapid increase in the, the value, but you’re not really participating in the global economy when you’re buying gold.

You know, it has certain characteristics that are certainly advantageous during times, but you’re not really participating in the global economy the same way as if you’re buying equities. You know, when you’re buying equities, you’re buying that future earning stream, like we showed earlier in the slides.

And with gold, you’re, you’re buying safety or inflation hedge. I don’t know. The, the reason for holding gold seems to change depending on, on who you’re talking to. But over longer periods of time, you’re, you’re much better off looking at, at something like. Equity markets in the Dow, the S&P, or whatever it might be.

Probably not a good long-term hold, but certainly, people have done quite well on it this year.

Brian Perry: Yeah, and you know, the irony is even if you look at a little bit shorter chart, so this is 30 years, you get the light blue is the S&P, but just with price, the dark blue is the S&P with dividends, and then yellow is gold.

And you can see that the S&P, assuming, you know, you get dividends, is twice what gold has done in the last 30 years. Looked at another way. This is if you invested in 1928, a hundred bucks in the S&P Gold Cash real estate bonds, how much would you have? Well, with gold, you’d have $10,000.

With the S&P, you’d have about 800,000. So. You know, you probably don’t need a PhD in math to know that you can do a little bit more with 800 grand than you can with $10,000. So, you know, this is not meant to bang on gold or to say that gold never has a place in a portfolio. It’s just that in the very long run, stocks have done quite a bit better than gold.

Gold, sometimes to Brian F’s point, is popular as a hedge or some sort of protection, you know, so you can see that gold has outperformed cash, real estate, and bonds over the long run. The one trick there, the one thing to consider is that gold has been a lot more volatile than some of these other asset classes, though.

So, you know, if you look at double-digit declines, cash has basically never fallen double digits, and gold has fallen double digits. I, I think it’s like eight or nine times in the last 50 years. Bonds have fallen one or two times, depending on how you measure it. So gold sometimes has a place in a portfolio.

If so, it’s like with any investment in how you size it, but it’s been a popular topic. Recently, just because of the returns. You know, again, just like with anything, if you do own it, you just wanna consider what percentage of your portfolio is it appropriately sized? What is the role it’s playing in the portfolio, is it still playing that role, et cetera, et cetera, to move on to what should you do after an extreme year?

And Brian, let’s maybe you can weigh in here as my voice goes further south. And then we’ll, we’ll cover just one or two more things and then we will take a few more questions. So. Talk about emotions and investing. I know that this is something you see all the time, is people maybe sometimes being their own worst enemy?

Brian Fahey: Yeah. You know, when we go through volatile periods and my, my phone’s lighting up with, with client calls, really 90% of the job is just trying to calm people down and, and focus on something a little bit longer term. And reinforcing the idea that we have, we have a plan for this because. Double-digit declines are perfectly normal.

But you know, after extreme year, like what we’ve had, and especially after a handful of really good years for the equity markets, and Brian touched on this earlier, it’s a fantastic time to stop and take stock of where you are. Make sure that your money’s working for you. That your allocations in line with what you’re trying to accomplish, the level of risk that you’re taking, which if you haven’t done anything, you’re taking more risk today than you did at the beginning of the year, and you’re taking a lot more risk than you took a couple of years ago if you haven’t done anything in terms of rebalancing, but making sure that your portfolio’s in line for what you’re trying to accomplish.

It’s much better to do it today, you know, with market pushing near all-time highs, than it is when you know we’re down 20% because we’re going through a tariff tantrum. I think more to that point, the next slide shows a little bit about what happens if you don’t do anything. So this slide on the far left is showing your kind of classic 60 40 portfolio, 60% in equities, 40% in fixed income, and in this example.

If the investor didn’t do anything so it started in January of 19, and if you run it through today, instead of being 60% equities. You’re more like, what is that number there? I can’t even read it. Let’s just call it 80, 20, 80% equities. 20% fixed income. So now you’ve become a really aggressive investor because your equities have dramatically outperformed your fixed income.

And particularly now you’re taking a much bigger bet on US growth than you would’ve at the beginning of 2019 when you first set things up. So again, now is just a great time to review where you are and make sure that you’re comfortable with that, and that goals are as consistent with what you’re trying to accomplish over time.

Brian Perry: Now with that in mind, again, if you’re interested, if you’re a client, please talk to your advisor, make sure everything’s still in balance and your plan is updated, et cetera. If you’re not a client and you want to come in for a free financial assessment, we usually charge for those. But you can come in for free if you request through this.

And we’ll take a snapshot of your overall situation, see what kind of risk you’re taking in the portfolio. We’ll take a look at your tax situation, particularly right now, right? Are there any tax moves you should be making before the end of the year? Whether those be. Repositioning, what kind of account you own assets in taking any kind of tax losses or gains.

Anything you should be doing to set yourself up for next year in order to smooth out your income and your tax burden over your lifetime. And then just sort of, are you on track to meet your financial goals, cash flow decisions, and the like. We can take a look at all of that. No charge, no obligation. With that in mind, let me just pause for a moment and see if there are other questions from the audience.

Kathryn: One was just what are the implications of the current bull market for the market’s resilience?

Brian Fahey: There’s an old saying that stability breeds instability. Eventually, things investors push maybe too far on certain themes, and then the market needs to correct. I don’t think we’re really there yet.

What I do think this stability that we’ve seen this year is gonna kind of open the door for next year, is we’re gonna probably see more IPO activity. There’s been some news stories at like SpaceX, which is. Across the parking lot for me now is gonna IPO at a pretty ridiculous valuation. We’ll see if that happens.

Same is also true for OpenAI and Anthropic to big AI companies. I think that’s actually a good thing for investors because right now there’s a lot of open questions on how profitable the AI companies actually are. What is their model or the forecast for how they become profitable? ’cause OpenAI, I think it lost about $12 billion just last quarter, and that’s with some support from Microsoft on actually processing data.

So if those guys end up coming public, we’re gonna get a full disclosure of how their businesses are operating and where they think they’re gonna, or when they think they’re gonna be become profitable. I think that’ll go a long way to kind of calm investors’ nerves on the valuation aspects that we talked about earlier in this, this webcast.

If we know what numbers really are, and how profitable these companies may be, and how much it costs to run them. I think a lot of the, the uncertainty around valuations is, is gonna go away. I mean, it’ll go down. It’s not gonna go away ever. But I think that’ll, the stability that we’ve seen in the last call it nine months, I think is opening the door for more initial public offerings, more private companies to come public.

And that. Should help us get a little bit more and the investing public get a little bit more information on where this massive theme that we’re always talking about where it actually is in the business cycle.

Brian Perry: You know, one other topic to add is there’s been a lot of talk about, I don’t know if rolling recessions or rolling bull markets, but you know, there, there’s obviously been pockets of froth and excitement in the economy or in the financial markets over the last several years.

AI being, you know, the poster child, but there’s also been a lot of pockets of weakness, right? So real estate’s a good example of house prices for the most part, depending on where you are, haven’t done anything in three or four years. Commercial real estate’s been in the, in the dumps for the, the better part of a handful of years, right?

If, if not longer. And so it’s not like it’s been a rising tide for all asset classes, right? International stocks did really well in Europe this year. But before that had several bad years. Japanese stocks have had a good couple years, but only just in the last year or two, hit new highs for the first time since 1989.

And so the, the point being that I think that we could be moving from more of an an an environment where everything goes higher, right? And you just have to kind of close your eyes and, and throw darts and you’re gonna hit a winner to where you need to be a little bit more selective, where you need to own a broader swath of asset classes where you need to be.

More choosy in what investments you own and stuff like that because eventually you’ll see some of the things that have done well come back down ore a little bit, and some of the things that have struggled maybe come back up. And so I think that this again is a good time to look and actually consider what are you investing in and what do you want to be investing in.

Brian Fahey: Yeah, that’s a good point, Brian. Because over the last call it month, month and a half or so, the S&P’s kind of just gone sideways. Hasn’t really done much of anything. But the Russell 2000 US small companies, I think it’s added about one point half percent just from when I put the slide, the slides that we started with.

A week and a half, two weeks ago. So you are seeing and don’t go all the way back. It’ll take you forever. You are seeing investors rotate from maybe potentially expensive US growth stocks to US small-cap, which to varying degrees, has been unloved for five years.

Brian Perry: Yeah. And as you look at it, if we could put the slide up, we could argue about some of these exact definitions. And no two scenarios are exactly the same, but essentially, you’ll look at the cross. The y-axis is higher inflation and lower inflation, and then lower growth and stronger growth. And so you’ve got different environments, right? Inflationary, stagnation, inflationary boom, disinflationary boom, deflationary, Boston, et cetera.

And then you’ve got different asset classes and what’s done, what might potentially do well in those environments. And again, every environment’s gonna be a little bit different as far as exactly what would do well. But the point being is, okay, there are a lot of possible outcomes or directions that the economy could go in or that the environment could go in.

You want to have investments, especially if you’re getting a little bit close to retirement or in retirement, that may do well regardless of outcome, right? You don’t want to just concentrate in one scenario because that’s great if that scenario comes to pass, and really bad. If it doesn’t, you wanna own assets that will do good across a variety of environments because what’s the number one rule of finance?

Buy low, sell high, right? And so by having a variety of asset classes or investments, you know, if you get this scenario, maybe you sell whatever. And then if you get this environment and you sell whatever, right? So that you can still pay your mortgage, you can still go out to eat, you can still go on a cruise, or whatever it is, as you go forward, you wanna make sure that you’ve got some variety to account for different scenarios.

Kathryn: We talked a little bit about tariffs, but will tariffs push to a long-term rebalancing of globalization? For example, world trade will trade with each other, not with the US.

Brian Perry: I mean, I’ll give my opinion maybe, and then let Brian F give his, you know, I think there’s a couple of assumptions we would need to make.

First is, for one thing tariffs have sort of settled in at levels well below the, the worst case scenarios that we were looking at nine months ago. So they’re meaningful, but they’re not draconian. Two is. You know, do those continue and for how long? Right? Because we have we’ll have a new political regime in a couple years, potentially.

Right. And, will those policies stay in place? Will they go further in the tariff direction, or will they reverse? But I do think we’re seeing a period of de-globalization and I do think this, that will continue. That, that’s just my view. And, it’s not just because of tariffs. I think a lot of it has to do with geopolitics and great power competition.

And also frankly, just what we saw with COVID where all of a sudden for an exogenous event that had nothing to do with politics, the, the world couldn’t trade with each other. Right. And so you were already seeing companies nearshore bring some of the production a little bit closer to home. I think companies are, have become cautious about being overly reliant on having a single country as a point of failure for a product or something that they need.

And so of countries, right? No country at this point wants to be reliant on a potentially unfriendly country to be their sole source of something that they need. Think of Eastern Europe with energy that they were getting from Russia or something like that. And so I do think you’re gonna see more disaggregation of trade and you’re gonna see more localized trading blocks and friends, trading with friends.

And frenemies, maybe not trading as much. So I don’t think globalization or trade is going away. It’s still an interconnected world. But I think it is somewhat in remission. And this is not unusual. We saw this in the early 19 hundreds where we hit kind of peak globalization, and then it reversed, and then we saw it grow again after World War II.

Brian Fahey: And now it seems to be reversing. So, this tends to happen in waves, and I think even with the tariff. The effective rate in the US right now is around 10%, which. To Brian’s point, is high, but it’s not draconian. Clearly, businesses can figure out a way to work around that. Also, the trade deficit, so how much we’re importing versus how much we’re exporting, is largely unchanged even with tariffs.

But I think Brian’s absolutely right, and this started before Trump was, companies have made the decision post-COVID that maybe they want more than one supplier for this little widget that is critical to their supply chain. Maybe they want two, and maybe they want one of those, you know, in California, or they want in Mexico.

They want it somewhere a lot closer so that their entire business doesn’t shut down because they’re missing one widget. Is that deglobalization? Kind of, I guess technically, but is it fundamentally changing the, the kind of world order? No, it’s just. Adjusting things. China’s not exporting as much to us today as they were a year ago, but they’re exporting more to Europe now.

Like Germany’s actually importing more from China now than they export, which is a big change. So I think the nature of globalization and how goods flow across borders is probably changing, but the aggregate amount of it doesn’t seem to be changing. It’ll probably stay roughly the same or accelerate on an economic size basis or relative to GDP.

So, it’s not going away, it’s just kind of changing shape, changing form.

Kathryn: Any final thoughts that you wanna just kind of finish up with? We just have a few more minutes, Brian.

Brian Fahey: You know, I think one of the things that I’m attuned to is the idea that everybody thinks the market’s just gonna be fine with 11% or so earnings and that we were gonna have this Goldilocks kind of scenario, which I think, you know, there will obviously be some bumps in the road, but.

With AI spending as much as it is, and the spillover effects of that on the economy, and remember Uncle Sam’s still running roughly a 6% budget deficit. I still think that any chance of a recession is really remote. So even if we see a little bit of labor market weakness, like what we’ve gone through or we think we’ve gone through, ’cause we don’t have the actual data in hand, next year should be just fine.

Maybe we don’t get 18%, but high single digits would be. Pretty consistent. And if we get good earnings, then the market, actually, on a PE basis or how much you’re paying for earnings, it becomes less expensive. So you just kind of grow into where everybody thinks we should be. I think with, you know, a couple of IPOs, like I talked about earlier, that maybe that lowers anxiety of investors for growth companies and.

We should be just fine. I would imagine foreign equities do somewhere along the lines of similar experience to what the US does, and you know, high single digits. Bonds probably give you mid single digits. Should be an okay year. Obviously, we’ll get a few bumps, but we should make it out, no problem.

Brian Perry: I don’t have too much to add. I do think we’ll see volatility just ’cause most of the time you see volatility, I think, for some of the reasons we’ve mentioned. So, you need to be prepared for that. It’s, it’s part of the deal. If you want growth, there’s no such thing as a free launch. You know, and, and again, I, I think that volatility can be an opportunity, right?

If you’re positioned correctly, whether from a tax perspective or rebalancing perspective, et cetera. I think buckle up. Things are always uncertain. It’s gonna be a crazy year. And, you know, the, I think the most important slide we probably put up was the one on emotions, right? 66% of investors regretting what they did.

And you know, that certainly if we had this conversation nine months ago in the spring people were, many people were freaking out about the world and what was going on. And it turned out to be a phenomenal year for the investment markets. And so, things are never as bad as they seem in the moment, and things are usually not as good as they seem in the moment.

And having a little bit of equilibrium is really one of the keys to successful investing. And hopefully, you get that from your Pure Financial Advisor or from your financial professional.

Kathryn: Well, we appreciate both Brian’s, thank you so much for all of your insight and expertise, and thank you for being a part of our webinar here, and we look forward to seeing you next month.

Subscribe to our YouTube channel.

IMPORTANT DISCLOSURES:

Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed You are encouraged to seek tax or legal advice from an independent professional.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Risk Considerations: The economic forecasts set forth in this presentation may not develop as predicted, and there can be no guarantee that strategies promoted will be successful. Stock investing involves risk, including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise, and bonds are subject to availability and change in price. International and emerging market investing involves special risks such as currency fluctuation and political instability, and may not be suitable for all investors.

Information throughout this document, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we and our suppliers believe to be reliable, however we do not warrant or guarantee the timeliness or accuracy of this information.

CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience, and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.

CFA® – The Chartered Financial Analyst® designation was first introduced in 1963. The CFA Program contains three levels of curriculum, each with its own 6-hour exam. Candidates must meet enrollment requirements, self-attest to professional conduct, complete the approx. 900 hours of self-study, and successfully pass all three levels to use the designation. The program curriculum increases in complexity as you move through the three levels: Level I: Focuses on a basic knowledge of the ten topic areas and simple analysis using investment tools Level II: Emphasizes the application of investment tools and concepts with a focus on the valuation of all types of assets Level III: Focuses on synthesizing all of the concepts and analytical methods in a variety of applications for effective portfolio management and wealth planning CFA Institute does not endorse, promote, or warrant the accuracy or quality of Pure Financial Advisors. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

AIF® – The Accredited Investment Fiduciary designation, administered by the Center for Fiduciary Studies fi360, certifies that the recipient has specialized knowledge of fiduciary standards of care and their application to the investment management process. To receive the AIF Designation, the individual must meet prerequisite criteria based on a combination of education, relevant industry experience, and/or ongoing professional development, complete a training program, successfully pass a comprehensive, closed-book final examination under the supervision of a proctor and agree to abide by the Code of Ethics and Conduct Standards. Six hours of continuing education is required annually to maintain the designation.