Larry Swedroe

Larry Swedroe is principal and director of research for Buckingham Asset Management, LLC, a Registered Investment Advisor firm in St. Louis, Mo. He is also principal of BAM Advisor Services, LLC, a service provider to investment advisors across the country, most of whom are affiliated with CPA firms. Swedroe's mission is to educate people on [...]


Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Brian Perry

In addition to overseeing Pure’s investment offering and platform, Brian works closely with Pure’s financial advisors, helping provide them with the tools and resources necessary to serve their clients and continue the firm’s mission of providing the highest quality financial education and planning to as many people as possible. He has been actively involved in [...]

Published On
October 16, 2018
Larry SwedroeLarry Swedroe

Brian Perry and Larry Swedroe on market volatility, whether, as President Donald Trump said, the Fed is crazy, and what 3 things you should do next to be like the greatest investor of all time, Warren Buffett. Plus, answers to your questions: can you roll a 401(k) into a home purchase? What’s a good allocation of stocks vs. bonds? And find out why Joe says to contribute to your 401(k) plan regardless of the investment options and fees, and why he thinks Suze Orman is crazy and out of her mind! 

Click here to listen to the podcast on YouTube

Show Notes

  • (00:43) Brian Perry, CFP®, CFA®: What’s Going On in the Market and a Q3 2018 Market Recap
  • (17:10) Larry Swedroe on Market Volatility and How to Invest Like Warren Buffett
  • (32:36) Can I Roll My 401(k) Into a Home Purchase at Age 59 1/2? (video)
  • (36:09) What Are Some Alternatives to My Company 401(k)? (video)
  • (41:33) How Much of My Portfolio Should Be In Stocks Vs. Bonds? (video)
  • (50:30) Joe Says Suze Orman is Crazy Out of Her Mind (She Hates the FIRE Movement)


00:43 – Brian Perry, CFP®, CFA®: What’s Going On in the Market and a Q3 2018 Market Recap

JA: Got Brian Perry with me right now. He’s our Director of Research at Pure Financial Advisors. Chartered Financial Analyst, Certified Financial Planner. Brian, there’s a reason that you’re on the show. And it’s not because I just like talking to you.

BP: It’s not because I’m a CFA and a CFP?

JA: It could be that. But we’ve had a little volatility in the overall markets.

BP: We have?

JA: A little bit. It’s back.

BP: Oh really?! I hadn’t noticed.

JA: So let’s talk about that. Two things I want to do, I want to talk about current volatility in the overall markets. Why the heck now is this going on? And then let’s recap a little bit of Q3, because I want to get into the numbers a little bit more. I think what the media likes to put out and what individuals hear are certain indices – the Dow Jones, the S&P 500, the Nasdaq – which are very important indices, but they are also just half the story. If a globally diversified portfolio is the S&P 500 then I’m confused. Most people, I think, should have money across the globe. And have bonds and have stocks, have real estate, have precious metals. So when someone looks at their overall portfolio, if they’re diversified. they might not be as happy to hear the news of their portfolio versus let’s say the S&P. And on the flip side, they might be really happy when the S&P tanks. So we’re kind of running into this weird dichotomy in the sense of, how can I be happy as an investor, first of all? I need to figure out what my expectations are.

BP: Yeah, I think expectations are key, and I agree with you that globally diversified portfolios make a heck of a lot of sense. I’d push back a little on precious metals as being an investment, not a big fan there for reasons that we can go into later. Yeah, I think it’s all about expectations, and in my experience, people want relative performance on the upside. On the upside, they want to outperform whatever index or whatever their neighbor is getting. And then on the downside, they don’t care about relative performance anymore, they want absolute performance. And so I always try to move it away from performance to some arbitrary benchmark, which is what the S&P 500 is, and back to performance to plan.

JA: But if I look at the S&P 500, that gives me a good, decent indication of what the hell’s going on in the markets, right?

BP: Well it depends on what market you’re talking about. We’re talking about…

JA: I meant to say “heck” there, by the way. (laughs)

BP: When we’re talking about the S&P 500, we’re talking about big U.S. companies, and in fact, most of that index is about 50 or 100 really large global companies – your Amazons your Apples, your Googles – those kinds of things. There are times when they dominate the market, and there are times when they do really well, and there are times when other sectors are in favor. And so if you’re invested in smaller U.S. companies, there are thousands of companies that aren’t Netflix and Amazon and Google. If you’re invested overseas in a Nestle, a Toyota, Unilever, if you’re invested in emerging markets, if you’re invested in bonds, which, a lot of people in the last couple of days, all of a sudden the bonds that they hated last quarter when stocks were doing great, in the last couple of days, they love their bonds. If you’re invested in all those things, the S&P 500 tells you nothing about how your portfolio should be doing.

JA: When you look at the S&P this year, what percentage – and I don’t mean to put you on the spot and you probably don’t have the exact answer for this – but what percentage do you believe… the 10% let’s say growth, or whatever the S&P is right now, is based on the FAANG stocks? How much? It’s got to be around 30-40% of that overall return is based on, what, four companies, four or 5 companies?

BP: Yeah that’s what I was going to say – it’s somewhere in that 30 to 50% range is a handful or 10 companies. That’s actually not that unusual. When you look at historical performance, in general, most years, a handful of stocks drive market performance. To me, there are two takeaways that people have from that, and mine is maybe different than a lot of people’s. A lot of people say, “oh, well the FAANG stocks are driving market performance. I want more of the FAANGs. that’s all I want to own. I take it as, if in any given year, in general, a small subset of stocks are driving market performance, I want to own a heck of a lot of stocks, because next year it may be a different handful of stocks that are driving market performance.

JA: So Thursday or Wednesday, saw almost a 1,000 point drop in the Dow. 3.5%, roughly. That’s one of the biggest drops we’ve seen in quite some time. It’s not necessarily abnormal. You hear the thousand point or 800, 900 point drop and people tend to freak out, but then you put it in percentages, it’s like a couple of percent. Yeah, it’s bad, but it’s not – you know, a thousand points ten years ago would have been devastating.

BP: Well yeah. You need to keep the numbers in perspective I’ve done the math and this is going back a couple of years. But if the Dow grew at 7% between now and the year 2100? So when people’s grandkids are a little bit older, you’d have a 6 million level on the Dow. And we’d be talking about, “oh yeah, the Dow is up 150,000 points yesterday” or something like that. It sounds absurd, and so I think putting it back in percentages makes a lot more sense. Yeah, we were down 3.5%. Nasdaq was down more, it was down about 4, 4.25%. Think of October 1987. Stocks were down almost 25%. That’s a major correction right there.

JA: So what was the reason behind it? It’s very difficult to predict, but I think we can be… Monday quarterback. What the hell? Armchair?  Monday afternoon?

AL: Armchair quarterback. Monday morning quarterback?

JA: What the hell? And I’m a sports fan! This is ridiculous. Anyway…

BP: Let’s talk about sports!

JA: We can look at the past and reflect and say, “OK well this is why this happened.” I wish we could say, “this is going to happen,” but it’s very difficult to do that. So why did it happen? And what can we anticipate, what can we guess in the future?

BP: Well here’s the thing, if, let’s say a year from now we’re looking back and stocks had – this is not a prediction, but stocks had gone into a nasty bear market and we had a recession. And you look back, and people would say it was obvious that we had a bear market or recession because we’re in an environment of tighter monetary policy, slowing economic growth, higher interest rates, slowing global trade, tariff wars, oil prices doubled, and all of that happened in the midst of a really long bull market with full valuations. So obviously, we were going to have a bear market. I think that some of the reasons why stocks fell. That being said, that doesn’t guarantee, just because it seems obvious that we need to have a bear market, that doesn’t guarantee that we will, because the flipside of the argument is, you have a relatively strong U.S. economy. You have corporate profits that have been fantastic. You have tax cuts that are still stimulating the economy. You have policy that, although on the monetary front is tighter than it was, it’s still relatively neutral. It’s not particularly tight. And so I think that speaks to the binary nature of outcomes in that things are always obvious in retrospect.

JA: Unemployment’s still really low.

BP: Yeah exactly. And so it’s like yeah, in 2008 in retrospect, it’s obvious that the market was going to crash. But at the time it wasn’t so obvious to everybody. So that rearview mirror always seems fantastic and makes things look really clear. But if you’re looking on a go forward basis, who knows what’s going to happen. And again, I think I can make a compelling argument for why stocks will continue to fall sharply, but I think I could also make a compelling argument for why this is a time to be invested. And again move past the U.S. too – that’s just in the U.S. If we’re looking globally, valuations in a lot of other markets are attractive relative to U.S. stocks.

JA: Let me quote our president. “The Fed Is Crazy.” You’re a bond guy. You understand a little bit about interest rates. Are they crazy? (laughs)

BP: You know, when you throw something out there like “the president” and “crazy” in the same sentence, I could get in so much trouble by going in various different directions. (laughs) But I’ll stick to bonds. I think that the Fed is probably doing what they need to do. In my opinion, if there was any craziness it was that they were probably too low for too long and that they took a little longer than maybe they should have to normalize interest rates.

JA: So all the good things that you just said about the economy. So now the Fed is raising interest rates quite substantially if you just take a look at the past 6-8 months. What’s the 10 year right now, almost 3.5%, 3.25%? So that’s the highest it’s been in…

BP: Yeah, it’s the highest it’s been since 2011, but it’s still pretty low historically, and I think if you look at, kind of relative to inflation and stuff, we’re probably, in my opinion, about where we should be on the 10 year Treasury. I have difficulty seeing it going, let’s say, above 4%. And I don’t think it should be at 1.5%. I think somewhere in that 2.5 to 3.5% range is probably reasonable if you’ll look at the fundamentals. What worries me with the president calling the Fed crazy is I’ve had a longstanding fear of the Fed coming under more political pressure now that it’s so transparent and there’s so much social media coverage. 30 years ago, nobody knew what the Fed was or who the Fed chairman was, and now you get unions picketing outside of Fed meetings. And historically, if you look around the world when politicians get involved in monetary policy, you wind up with higher inflation. And so longer term I think that’s a concern.

JA: Let’s do a little bit more of a recap of Q3. What happened, what was good, what was bad, and then we can talk a little bit about maybe what are some ideas that people can do to position themselves maybe a little bit more defensively. I think we’ve gotten complacent. I think recency bias is alive and well of what’s doing well in the past will continue to do. But now we see some volatility, maybe that will spark people to actually take action on their portfolios.

BP: Yeah, I would agree, the time to position your portfolio is always before a particularly large correction, right? And although people get nervous because we haven’t seen it recently and they think that Wednesday’s 800 point Dow move 3.5% was a large decline, in reality, we’re down about 4 or 5% from the highs and we’re still up on the year, and so this has not been a particularly volatile market if you look over any kind of reasonable time frame.

JA: I mean that’s almost been dead quiet.

BP: It really has. Now, 2018 hasn’t been as quiet as 2017. 2017 was just a straight move higher with record low volatility. 2018, we have had a variety of corrections, and what I find interesting about 2018 is that it’s really showed the schizophrenic nature of market participants, in the sense that late January into February the Dow fell almost 10% based on fears that the economy was overheating. Then if you look at March, we fell nearly 10% based on fears that the economy would slow. And now again here, we’re falling on fears that – I don’t know if people are afraid the economy is going to overheat because inflation is a little bit higher, or if they’re afraid that the economy is going to slow down because of trade wars and tariffs. I think it’s a little bit of both. And so markets are all over the place causing a little bit more volatility.

JA: What is inflation right now?

BP: 2.25% or something like that. So still historically low. There’s a number of forecasts calling for it to go a little bit higher, but…

JA: Is that the CPI that you’re referring to? What’s the real inflation? People say it’s like 18.

BP: Yeah. You know, (laughs) I think it depends – I mean, do you want to eat and drive and stuff? Obviously, oil prices have gone up a lot. We get this question all the time. Why does the Federal Reserve or why do economists talk about core CPI or core inflation without food and energy? And the joke is nobody needs to eat or drive, right? The reason they do that is because energy prices are really volatile and food prices are really volatile. A hurricane or a crop report can change those quickly. The Federal Reserve believes that there’s a six month lag in monetary policy, so if they raise interest rates or cut interest rates, it takes six months to trickle through to the real economy. Because of the volatility of those food prices, if they were constantly reacting to, let’s say, the most recent hurricane, they would be doing monetary policy that by the time it took effect, the effects of whatever prompted the spike, let’s say, in energy prices, would have far since dissipated.

JA: So there are fears on inflation. There are fears on China. What’s China gonna do?

BP: Who knows. I think China, sometimes the old Winston Churchill quote about Russia, a riddle inside of an enigma inside of a puzzle, or whatever, to paraphrase that, is similar to China. It’s really hard to know what is going on inside the country, particularly because my belief is, with their economic statistics, a lot of times they pick a number they want and then they figure out how to make the data fit it. But by all accounts and a lot of anecdotal evidence is that these tariff wars are beginning to hurt China and that there is concern inside of China about the effect. Trade is more important to them than it is to the United States, and so my personal belief is nobody wins a trade war. But to the degree that there are relatively larger losers, I think that in the long run, China’s going to suffer a little bit more. The U.S. is actually a pretty closed economy. As a percentage of GDP, we don’t trade that much what the rest of the world, because it’s such a big economy and such a big country, and we produce a lot of what we need. So, in the long run, I think the idea is that we’ll try to “win the trade war,” but everybody suffers when this happens.

JA: So rising interest rates, a rise in inflation, and then China. Anything else that’s caused this, or is that about it?

BP: I think the other thing is we’ve had markets that are relatively fully valued. And you mentioned earlier the S&P 500. The big U.S. stocks and those technology stocks. They’ve done really, really well for a number of years, where some of them were being priced not so much on earnings or fundamentals, but more on hopes and dreams. Reminiscent, not quite as bad, I don’t think, as the 1990s. But you remember the 1990s, people were, “well, we think this company sometime will make money, so let’s value it at 100 times some mythical earnings.” It’s not that bad these days. But still, when you look internationally at some other sub-asset classes, things are not nearly so expensive. So value stocks, for instance, are significantly less expensive relative to historical norms than growth stocks. International stocks in developed countries are less expensive, relative to historical norms. And emerging markets stocks are quite cheap. They’ve been cheap for a while and they’ve had a horrible year, and now they’re very cheap.

JA: But the problem is is that no one wants to buy stocks while they’re cheap. We want to buy everything else cheap. We want to buy more expensive because it’s based on performance. So what cheap means is that it has lagged in performance. So we want to buy yesterday’s winners today. And I heard on Wednesday when the market blew up, is that Vanguard totally crashed. Vanguard is mostly Do-It-Yourself investors. So they’re going in and they’re like, “oh my God, I’ve got to sell, what the hell’s going on here?” I think that’s always going to be the problem is that you have international stocks that are down. But no one wants to buy, and let’s buy American stocks, which are great, but because we’re at all-time highs, but then we see a 3% drop and then one of the largest custodian’s website blows up. And they, of course, are not saying, “because everyone wanted to sell,” it was just like, “oh, there was a China chip in there.”

BP: (laughs) Nobody goes the mall anymore, but when people used to go to the mall, the Wednesday before Thanksgiving it’s empty, and on Friday people are beating each other up to get in the doors – because people love a sale. Financial markets, everybody hates a sale. I can’t tell you how many times somebody said to me, “I’m waiting for stocks to go up so they’re less risky.” I’m baffled by that statement. If you think about it, the value of an investment is a function of the price you pay and what you sell it for. The less you pay, the more certain you are to get a good return, and the more likely you are to get a high return. So when stocks are on sale, you’re going to have a far more likelihood of getting better returns and they’re far safer. I think emotion comes into play so much in this though, that the way to do it is to have some sort of discipline. To have a strategic allocation and then rebalance in some sort of disciplined way, because what that does is that makes you sell what’s done well and then buy what hasn’t done as well.

JA: Always great stuff Brian. One last quick question: private equity. What do you think? It’s a different world, right? I mean, I think a lot of private companies don’t necessarily want to go public. So what do you think?

BP: You know I think private equity probably has a place in the financial markets. If you look 20 years ago, there were 7000 something U.S. public companies. Now there’s about 3500, so there are a lot more companies staying private. The problem is illiquidity and then a large initial investment. So for investors with a higher net worth that are OK locking up a portion of their money and can afford to get in there, it can make sense. The one thing I would say is that that space is very crowded right now, so on a cyclical basis, I think people would want to evaluate whether or not this is the time to pile into private equity. There’s a lot of money chasing a finite amount of deals.

More on the volatility of the market momentarily when Larry Swedroe joins us. In the meantime, get your side-hustle on! Retiring in a Gig Economy is the subject of this week’s Your Money, Your Wealth TV show and you can watch it and subscribe at YourMoneyYourWealth.com. New episodes post every Sunday! And now that we’re counting down to the end of the year, make sure you’re prepared for tax time! Click “Special Offer” at YourMoneyYourWealth.com to download our free 2018 Tax Checklist.

17:10 – Larry Swedroe on Market Volatility and How to Invest Like Warren Buffett

JA: It’s perfect timing, Alan.

AC: This couldn’t be better timing with the crazy market this week.

JA We drew this up about a month ago, and then Larry must’ve called and said, “let’s have some volatility so we have something to talk about.” (laughs)

AC: So we’ve got someone that knows what he’s talking about to ask.

JA: Exactly. We got Larry Swedroe on the line. He’s Principal and Director of Research at Buckingham Strategic Wealth. Larry, it’s always great to have you. How you been?

LS: My pleasure, just came back from a nice two-week tour of New England. So nice and relaxed, and what do I come back to?

JA: Yeah right? I guess volatility is back.

LS: It certainly looks that way, and I think the most important thing for people to have is this perspective: they probably think and I know this is true because as Director of Research for, in effect, 140 firms, I get calls immediately when we get days like this. So it’s because the advisors we work with are getting calls from their clients. They tend to think this is highly unusual, a move of 3% plus in a day. But the evidence is that that is not the case, and a great example is this: I would say most people think that stock returns are kind of normally distributed. That means you get big events like these in the tails very infrequently. It’s like a hurricane like Michael happens once every 100 years. You don’t get one every month or something like that, or every year or even. But it turns out that, if stock returns were normally distributed, we would have had about 58 or so of those days in a hundred year period, and yet we’ve had over a thousand or them – more than 17 times as frequently. And if you raise that hurdle to 4.5%, you would expect just six times in 100 years or so. And yet we’ve had 366 of them in that period or 60 times as great. And to me, the most compelling stat is if you were looking at a move of more than 7%, you would expect that once every 300,000 years, and we’ve had it occur about 50 times. So these are really important numbers to keep in mind, because it tells us that stocks are really risky, big moves like this happen frequently, and your plan better include the certainty that you’re going to have to live with them often, because otherwise you’ll panic and sell because you took too much risk.

JA: Nothing really happened, it seemed like. What the pundits are saying, maybe it’s the fear of more interest rate hikes, and there could be China – but didn’t we already know all of this? And so why now just drop a thousand points and 5 some-odd percent in two days?

LS: The answer is pretty simple. First of all, you’re right, there was absolutely no news whatsoever, unlike sometimes, markets drop sharply because of bad news. 9/11 would be a perfect example. Lehman Brothers collapse, the oil embargo of 1974. Those are big events that obviously have negative impacts and can explain sharp moves. On the other hand, there’s no way we would have had, as I mentioned, over a thousand times events that have occurred. That’s ten times a year, on average in a hundred year period, where you get reasons for markets to move over 3%. And in this case, there was absolutely no news. Everything that the pundits have pointed out – trade war risks with China, rising interest rates – the Fed had been saying they were going to raise rates four times this year, likely 3 next year. Everyone knew that for months. The yield curve had already anticipated that. The problem is that we as human beings have this hunger and desire and need to try and find explanations or find patterns\ when events can be purely random in nature. We see this when an investor looks at some money manager and sees three years of great returns and thinks that means something when it’s highly likely that’s purely a random outcome. The same thing happens here. I used to run a foreign exchange trading room for Citico-op, one of the largest foreign exchange traders in the world, and we used to get calls, of course, from the media when we had big moves in the foreign exchange market. And we would laugh about it because some days we’d come in in the morning and write up a brief, “here are five bullet points for why the dollar went up.” And, “here are five went down,” and whichever way it went, we would read it. Now there was no explanation, often, to explain things, but people have this need. And literally, as you said, there was no news. Markets happened. Who knows why. It’s easy to try to explain things after the fact. But often, there are no good explanations.

AC: Yeah Larry, you did an analysis recently about 5% drops over the last eight years. And it’s interesting, I think our emotions would tell us, “OK, the recovery is coming. Time to get out of the market.” But yet in your research, at least recent research, that’s not been the case – the next six and 12 months have actually been pretty good.

LS: Yeah, I looked back just to provide a reminder to investors who are tempted to panic and sell here, to see well, let’s just look back since the great financial recession ended in March of 2009, the bear market ended there. I look to see how many months we had where losses were at least 5% in the S&P. That’s roughly what the loss was over the two days. So we had six of those episodes, the average loss was a little over 6%, the worst loss was in May of 2010 and was 8%. On average, the next six months returned 16%. That’s not per annum, that’s outright. That’s 50% more, or 60% more than the average compound annual return and the return over the next 12 months was 25%. Obviously two and a half times the 90-year average. And what’s interesting is, two of these episodes occurred back to back. So May 2010 with a loss of 8% was followed by June with the loss of 5. And yet, if you started from June 1, the return over the next six months was still +9.5%. We saw the same thing in August of 2011. That was down 5.4%and September of 2011 it was down 7. Still, if you start six months from August, knowing that September was down another seven, the next six months were still up 13, and the next year was up 18. When you look at evidence like that, it’s no wonder Warren Buffett advises people to never try to time the market. But if you can’t avoid timing it, at least be fearful when others are greedy, and be greedy when others are fearful.

JA: Larry, with this little shakeup, people do get fearful, but I think good things happen here. I think there’s been a lot of complacency with people’s investment strategy over the last several years, where they might not really realize how much risk that they were taking. Maybe they were chasing returns. And then all of a sudden you kind of see this sharp dip. Because memories are short- it wasn’t that long ago where the market imploded. But then we get overconfident and then all these biases come out. And then when you see that sharp dip, maybe it might motivate people to really take a second look at their overall portfolio to make sure it’s really doing what it should be doing for their specific goals.

LS: Yeah, you raise a very good point. Now – now meaning any point in time – is always a good time to review your investment strategy. Taking a look to make sure that you haven’t become overconfident. Make sure you don’t have more risk in your portfolio than you have the ability to take because of job security, or your investment horizon has now gotten shorter, you’re getting closer to retirement, maybe your stomach acid is grumbling. You thought you could deal with drops like we had in the last three days, but now you can’t sleep. Even if you didn’t panic and sell, life’s too short not to enjoy it. And lastly, the last 10 years have been so good that many people have earned returns well above their expected returns. So now, they have much less need to take risks, because they’re much closer to their goals than they expected. And so what we do on a regular basis is run Monte Carlo simulations. And we like to see at least, say, a 90% odds of success. And maybe someone 10 years ago needed to be 70% equities to get that and today they only need 50. Well, we want them to take those chips off the table so they can enjoy their life and not worry about bear markets. This is certainly a good time to do it. l’ll add one other important thing: whenever you get drops like this, it’s really important to take advantage of them, not only by rebalancing the portfolio but also looking for opportunities to tax loss harvest, because, for example, what happened just in 2009. We had massive losses in ’08 and early ’09, we were harvesting losses, having Uncle Sam share the pain, especially short-term losses, which are more valuable. But if you waited till the end of the year, which is what I know many individuals do it on a calendar basis, and advisors do it once a year. We don’t, we check daily, literally, to see if there are opportunities. And you want to harvest those losses, because by the end of the year, they may be gone and you missed that opportunity to save, in some cases, thousands or even tens of thousands of dollars in taxes. So, great opportunity to re-examine your investment policy statement, and also rebalance, and where opportunities exist, harvest losses – especially short-term money.

JA: Hey, in your blog, Has the Bear Awakened From Its Hibernation? you listed several different things just to continue to educate people that stocks are risky. You start out with the CAPE10 is still a little bit high at 31. Not necessarily saying it’s overvalued, but it could be highly valued.

AC: It’s highly valued, anyway. (laughs)

LS: Yeah, the stock valuations are lower and bond yields are now a bit higher than they were a year ago. The bad news for anyone investing today is that stock returns are now much lower on a forward-looking basis than historical. On top of that, bond yields are much lower, and therefore expect their returns are lower.

AC: I think in your blog, Larry, you say that “I’m not selling stocks, and I bet you’re Warren Buffett is not either.”

LS: Yeah exactly. One of the things I always tell people: I give them the academic evidence, so it’s not my opinion about things, and we discussed what the history says about the stock returns after periods of bad returns like a month or so. Often I can’t overcome that, no matter how much evidence you show, somehow this time is different. So what I learned to do is to ask the following question: So Joe, what do you think was the greatest investor of all time?

JA: Larry Swedroe.

LS: (laughs) I won’t take credit for that.

JA: I would say, Warren Buffett.

LS: 99% of investors will say the same thing. So my next question, Joe, is this: since you respect Buffett, you can’t invest like him because you don’t have billions like he does, and you can’t negotiate with Goldman Sachs. But if he offered you advice, do you think you should take it?

JA: Yes sir.

LS: Well, he says never try to time the market. Ignore all gurus forecasting, because they don’t tell you anything about where the market’s going. And if you can’t stop yourself from market timing, as we said earlier, be a buyer when everyone else is selling and not panicking. So if Buffett is selling, what you know that Buffett doesn’t? Or do you just think you’re smarter than him? And I’ve learned that if you ask it that way, people maybe begin to think a little differently – it can help them take the emotions out. And then I go to the point, “well if you are feeling nervous, then really we need to sit down and review your plan, assuming you even have one. It may be that you’re just taking too much risk, and it’s obvious that you’re not sleeping well. Let’s see by running a Monte Carlo analysis. Can we reduce your equity exposure and build a portfolio that can still give you that high chance of achieving your goals without as much equity risk?” And we all know that, even if you’re 65, you probably now need to plan on 30 years, at least, for your horizon. Well, in the last 36 years we’ve had three drops of at least 40% in the global markets. So you need to plan on at least 30 more of them, and we want to make sure your portfolio and your stomach can withstand that.

LS: Great stuff Larry. You can check out Larry’s stuff at ETF.com. Larry, thanks so much, my friend. It’s been a long time, and I really appreciate your insight, your thoughts, and most importantly your time.

LS: My pleasure. Joe, I’ll close with this. Every week I take a tennis clinic, trying to get better, and my pro says, “Larry, you’re the reason I never have to worry about retiring. You keep making the same mistakes over and over again.” Unfortunately, most investors keep repeating the mistakes, so there will always be room for great advice like you and your team provide.

JA: You know, I have a similar story. I have a golf lesson every Saturday morning, and I swear to you, I think he’s just messing up my swing so he has job security, because I just keep coming back and I still shoot the same crappy game.

LS: You’re his job security just like I’m my tennis pro’s job security.

JA: (laughs) That’s Larry Swedroe.

For a transcript and links to everything mentioned in this podcast, check out the show notes at YourMoneyYourWealth.com, which also where you can subscribe and listen to the show for free on demand. Next week, Today Show financial editor and host of the Her Money podcast, Jean Chatzky, joins us to talk about her newest project specifically for women. Now, our email bag is stuffed with money questions! You can send yours to info@purefinancial.com and one of several things may happen: Joe or Al may reply to you directly, they might answer you here on the podcast, I may email you a recording of their response, and now I’m also posting video of some of their answers to your questions in the show notes at YourMoneyYourWealth.com! All you’ve gotta do is email info@purefinancial.com

32:36 – Can I Roll My 401(k) Into a Home Purchase at Age 59 1/2?



JA: Lee from Atlanta, Georgia. Lee says this: “I have a question. Thinking of rolling my 401(k) into the purchase of a home. I am 59 and a half. So my question is, will there be any taxes on that move? Could that money be transferred from the 401(k) office right into the loan? This will be a purchase of a new home if that is helpful.” Lee from Atlanta, appreciate the email. I think he’s confused a little bit. He’s like, there’s a rollover, where you can roll over a 401(k) into an IRA. He’s saying, “hey, I wanna buy a house. Can I just roll my 401(k) into a loan?”

AC: Right. And the answer, Lee, is no. I’ll just tell you that because it’s a different kind of thing. Notice how I looked in the camera just for a little. Anyway. (laughs) So you’re right, Joe. You can you can roll over 401(k) to an IRA and not pay taxes. You can roll, if you will, we call it a 1031 exchange when you have a rental property and roll that gain into another property via 1031 exchange. But this is two different things. You can’t take a 401(k) and roll it into your home and avoid tax. So what happens is that the entire distribution is taxable. And we see people make this mistake, they think maybe because they rolled it to a different investment they don’t have to pay tax.

JA: Right. It’s. “OK, well, I’m buying a house. I have mutual funds, now I want to buy a home. I’m not spending it. I’m not taking it to the casino or the bar or taking the kids to Disneyland. I’m actually buying an asset.”

AC: Yeah. So why should I have to pay tax?

JA: Sure. First, it’s a personal use asset. And sometimes people think, “yeah I’ll pay a little bit of tax, I’m in the 15 – er, now let’s just say I’m in the 12% tax bracket. I’m going to take a $200,000 distribution from my retirement account, and then put a down payment on this house.” Then they’re calculating the tax – “well 12% on $200,000, that’s not too bad.” But it doesn’t work that way.

AC: No, because you get thrown into a higher tax bracket. And so not all of it is taxed at 12%, and then you got state taxes on top of that.

JA: Right. And guess what happens the next year? When they take that money out, they’re not automatically taxed. So Lee, don’t do this. So you’re taking the money out. You’re going to buy your house. And you’re moved in and you’re loving it. You’re like, “Oh honey, we got our primary residence! Isn’t this great?” And then April 15th of next year, you do your taxed.

AC: Yeah, you do Turbo Tax and you’re thinking, “there’s something wrong with this program because it says I owe $80,000 of tax.”

JA: Exactly. And it’s like, “well, how do we owe so much tax?” Well because there was a 1099-R as a full distribution from your retirement account as income. And then that gets plugged in the situation. Now you owe $80,000, $100,000, $200,000, whatever it is. However much money you’re pulling out of your retirement account. And then where are you going to go to pay that tax?

AC: Yeah, because you already used your 401(k).

JA: You’re selling your home! (laughs)

AC: (laughs) Yeah I hope you had a good year!

JA: Right, or you’re in default. I mean, really bad things can happen, because the numbers you see on your 401(k) statement is not all yours. It’s not all your money.

AC: Yeah you’ve got a partner. And part of the confusion here is he’s thinking, “I waited until 59 and a half so there’s no penalty.” Right, there’s no 10% penalty, but you still have to pay taxes on what you pull out.

JA: All right Lee. Don’t do it.

36:09 – What Are Some Alternatives to My Company 401(k)?



JA: Cindy from San Diego, she writes in: “I just started a new job and I’m not pleased with the 401(k) options. I’d like to know if I should participate, or if there’s any alternative that you’d recommend. This 401(k) includes a $90 administration fee and only 1% employer matching if I contribute 10%. I’m already maxing out my Roth IRA. I can afford to invest about $600 a month. At the moment, that’s almost 10% of my salary, but expect that to go down starting next year. What do you recommend?” Well, thanks a lot again Cindy for the e-mail, and Alan, why don’t you start this one?

AC: Okay. Well Cindy, so I guess I don’t really know what the options are. Maybe they’re not quite as bad as you think. I guess there’s still a match – it’s not a great match, but still there is a match, and if you put in 10% then you’re getting a 1% match. So that’s something. So I guess I’d want to look at that a little more deeply. Sometimes people think they don’t have good investment choices because they only have 20 choices. But some of them may be great. But let me go down another path, which is maybe the investment choices are terrible. And so she’s already maxed out a Roth IRA. So then you would look at other investments outside of ar retirement account. You don’t get a tax deduction, but then you can – it’s called a non-qualified account or non-retirement account, brokerage account, whatever you want to call it. And then you invest, generally for growth, if you’re working, going to be working for a while, and when you invest for growth, that generally kicks off capital gains when you actually sell those positions, or maybe you get some qualified dividends. It’s relatively tax efficient. And that, assuming that you’re really right and these are terrible options, I would just invest outside of retirement.

JA: Cindy, I don’t care how bad the investment options are. I don’t care if they are 2% in fees. I don’t care if you don’t get a match. Put the $600 in the 401(k). It’s out of sight, out of mind, you check a box, it’s so easy. And you’re going to end up with a lot more money, guaranteed. Well, I… quasi-guarantee.

AC: Yeah you can’t guarantee anything because of compliance.

JA: But I mean we argued about this before. If I have a 401(k) plan and you don’t, or you’re going to go open your brokerage account, you’re going to put $600 in your brokerage account. I’m going to open up my 401(k) plan and I’m going to send 10% of my income, boom, just let it go. And then I get my paycheck, and then I’m going to spend it. You, on the other hand, have to write a check every single month of that $600 to that brokerage account. Guess what happens next month?

AC: Yeah, I don’t write it, because you know what, the car broke down. And, even worse is, the car really broke down and I got to use all those assets to pay off the car, pay the repair. And so now I’ve got nothing.

JA: Well, no you’re on Amazon. You’re buying new shoes.

AC: Oh, it looks like I got $600 in this account.

JA: Right, and you’re like, hey, you know what, should I save, should I not? But if you pay yourself first, out of sight, out of mind, because humans are not great at money. If I could just get that money out of my hands and put it into a retirement account and let that thing go, and select the very best options within the plan, $90 administration fee, and I don’t care what the fees are internally. To be honest with you, this is just my opinion, this is not advice – if I were Cindy, that’s what I would do.

AC: Yeah. Well, I would do the same, and I’ve got to believe that they’re not quite as bad as what she thinks. But you do get a match, out of sight out of mind – that’s a really good point because when it’s in your brokerage account, you can grab that money anytime you want. And life does happen, and people grab that money all the time. Sometimes they grab their 401(k) money and they shouldn’t, but at least it’s in a 401(k) and you’re less likely to do that.

JA: Another thing Cindy, what I would recommend, is talk to your H.R. department if it’s that bad, or if it’s a small company, talk to the president or the CEO or whoever and just say, “hey, I’m taking a look at these options and I’ve done some research and it’s not that great.”

AC: I want Vanguard or I want some low-cost investments.

JA: Is there something that we can do here maybe? The company has a fiduciary responsibility if they have a 401(k) plan. On the flip side though, this is what drives me nuts, is that there’s so much cost and administration for small businesses to establish a 401(k) plan. There’s, what, only maybe 40% of all companies that have a plan? Just because of the rhetoric, the red tape and the legalese that go around it. “I’m going to offer 401(k) plan, but I don’t want to, as an employer that only has maybe a handful of employees, I don’t want to spend $10,000, $20,000 administrating this thing, get a TPA, file 5500’s and do all this stuff.” So what they do is they find, let’s say a mutual fund company and they’ll say, Hey Mr. or Mrs. employer, we’ll set up this 401(k) plan for you. It’s not going to cost you any out of pocket, but you know what, how we’re going to get paid is that it’s just going to be a little bit higher administration fees in there. But you have a plan, and all your employees can participate in the plan – for a little $90 administration fee for me? I will pay that all day long. But it’s like people want their cake and eat it too. So anyway, Cindy, that was not reflected towards you. I think you’re a wonderful person. I would go with the 401(k) plan.

41:33 – How Much of My Portfolio Should Be In Stocks Vs. Bonds?



JA: Dwayne, Denver Colorado. The high city.

AC: Mile high? He starts it with “hi.” (laughs)

JA: “Hi!” Hello Dwayne. “I’m 53 years old, looking to retire at age 60. Married, wife 50. We currently have $1.5 million in retirement accounts. I envision needing $100,000 a year. My question is, given those broad parameters, what would be a current, or appropriate amount of bonds and stock allocation both now and the next five years? Also, we have only remaining home debt of about $135,000, which will be paid in full in seven years. Thanks.” All right. So Dwayne’s 53. Looking to retire at age 60, he’s got $1.5 million. He wants $100,000 from that account. What should be his stock-bond allocation?

AC: That’s a great question. So I’m just of sort of gonna paraphrase. It looks like, Dwayne, you’re planning on having your mortgage paid off, I guess by the time you retire, which is fantastic. And I don’t know…

JA: Pretty good at the math. (laughs)

AC: Yeah I’m really right with it today. (laughs) He says, “I envision needing $100,000.” I’ll assume that’s over and above, that’s not including the mortgage, because the mortgage will be paid off. I’m gonna make that assumption right now. What I don’t know Dwayne is how much you’re saving currently. So you got a million and a half, and so the million and a half…

JA: Let me see your calculator real quick.

AC: Yeah, you calculate while I’m talking. But a million and a half, and let’s just say you’re maxing a 401(k), $24,500, and maybe Joe, put in6% or 7%, something like that. What does that come out to be?

JA: So if he’s got $1.5 million and he’s got 7 years, let’s say he gets 6% on the money and he’s saving $24,500?

AC: Yeah, let’s go with that.

JA: That’s $2.4 million.

AC: $2.4 million. Okay…

JA: Look at that Dwayne, we just got you $2.4 million. All you gotta do is max out your 401(k) and get 6% over the next seven years. If you take 4% on that, that’s $98,000.

AC: Yeah. We’ll call it a hundred. We’ll round it.

JA: Boom.

AC: Yeah and then there you go.

JA: What stock-bond allocation does he need? Well, I think he can play it conservative now, because let’s say if he if he targets a 6% rate of return, then he’s home free. Now, if he has pensions and Social Security, that’s going to be gravy on top of that. But he’s 60 years old when he retires, so he’s got to bridge that gap. So he’s got to look from 60 to 67, potentially, to get Social Security, or if he’s going to push it out to 70.

AC: Right. So based upon our assumptions, I personally would probably do 60/40 – 60% stocks, 40% bonds.

JA: Yeah,I think that’s right in line. I think anywhere between 40% stocks and 60% stocks.

AC: I agree. You probably don’t need more than that, in terms of stocks, and if you want to play it safer, go 50/50. And I’m not even opposed to 40% stocks, 60% bonds. But I agree, somewhere in that range, based upon what we know about your situation.

JA: Right. Because he doesn’t have to shoot for the moon here. He’s already done a really good job, he’s 53 years old, wife’s 50, they got a million and a half saved?

AC: And that’s not even including Social Security or pensions. So, a lot of this, as you say, Joe, might be gravy.

JA: Right. So I think Dwayne, congratulations. I would not say “all right, 100% stock portfolio, or 100% bond portfolio.” I think you still need risk in the portfolio to get a target rate of return. You need 6%.

AC: Yeah. And something else you might think about is, if you want to go 60% stocks now, as you get right to retirement, you might dial it back a little bit, maybe 50/50, maybe 40% stocks 60% bonds. But you still need stocks, because chances are you’re going to live – one of you is going to live into your 90s, so that’s 30 years. And that’s where people make mistakes, Joe, is they think, “OK, I’m retired so I can’t take risk anymore, because I can’t make the money back.” Well yeah, you definitely want to make sure you have a portfolio that you can draw upon in bad markets. But the fact of the matter is, you may live for another three decades or more, and that’s your time horizon – it’s not like one year, it’s 30 years or more.

JA: Right. And with the amount of information that we have, I think that’s the best way to go. Our advice could completely change if, Dwayne, you have a pension at age 60 that’s paying you $80,000 a year and you want $100,000. So now you only need $20,000 from the overall portfolio. Then it gets into a little bit different type of discussion.

AC: Well it does, and so now I think we’d have a lot more latitude. So you don’t need to take a lot of risk, so if you want to be conservative, 10%, 20% equities, then fine. On the other hand, because you don’t necessarily need this money, what’s it for? Is it for the kids, is it for charity? Maybe take a little bit more risk, because you can afford to.

JA: Right or maybe you look at it and say, you know what, I don’t know. Maybe $100,000, that’s the baseline. Some years it’s going to be $150,000 because we want to go on a cruise, or we want to do this. I dunno, listen to Suze Orman, you probably need 30 million, because you’re going to have a catastrophic event that of course is going to happen to you…

AC: So I guess the point is, there’s a lot of variables and we don’t really know your situation fully, but just based upon what we know, probably 40 to 60% equities would probably be a good place to be.

JA: Now Dwayne, now let’s take this to the next level here, Alan.

AC: Wow, OK we’re going deep.

JA: Yeah because he still has 7 years – he’s 53 years old, he’s got $1.5 million in retirement accounts. He never specified what type of retirement accounts are these? Is it all IRAs, is it all 401(k)s, is there any Roth in here? Or does he have a brokerage account that he’s labeling for retirement, or is everything in a retirement account? So if he continues to save the $24,500 in the retirement accounts and gets 6% over the next seven years, we just did the calculation, approximately, roughly, it’s no guarantees, blah blah blah, of about $2.4 million. Well if that’s all in a retirement account, that’s all going to be taxable income. If you want to spend $100,000 a year, well then now, hey, you’re going to be in a little bit higher tax bracket versus if you wanted to spend let’s say $60,000 a year. And then you’re going to have Social Security on top of that, and if you have any other pensions, all of that kind of layers on top of each other, where that could pop up into even a higher tax bracket than he is now. So that’s where diversification of taxes come in. You have 7 years, so if $24,500 is that savings number, how much of that is he going to be putting into retirement accounts? How much should he be putting in a Roth? Does a Roth conversion make sense? Can he broaden that $1.5 million out get a little bit more diversification tax-wise, because if that’s the case, well then he doesn’t necessarily have to accumulate that much, because a lot of it is going to him, not to taxes.

AC: Yeah, and that’s a really good point because right now the 24% tax bracket goes up to $315,000 dollars taxable income for a married couple. If you had that kind of income last year, 2017, you’re probably subject to alternative minimum tax, and you probably were in a 35% effective rate. So this is 11% lower tax for many. And then you think about, well you know what, this tax law, at least at the moment, it’s going to sunset. So 2026 we go back to the old rates, where you might be in the 25 or 28% bracket or worse. So it’s like, I totally agree with that. It’s like, make sure you get tax diversification in addition to the savings plan.

JA: Right. So he needs a savings plan, how much is it going to save? Where’s it going to save it from a tax perspective? And then from there, what does that allocation look like? I think he’s skipping a beat here by saying, “Well show me the allocation first.” Well no, let’s look at, what’s your fixed income sources, what’s your income going to look like in seven years? Where’s that money held right now? And then break it out a little bit more from a tax perspective, and then from there, that’s when you can start really dialing in your overall allocation. So Big D from Denver.

AC: It’s a great question.

JA: Dwayne from Denver. Colorado.

AC: Mile high. You been there?

JA: No, I have not.

AC: I have been there many many times. It’s a great place.

JA: I know you have. You’re a big fan. Buffs.

AC: Yeah Buffs, Rockies, whatever.

Video of Joe and Big Al answering some of these email questions is now available in the podcast show notes at YourMoneyYourWealth.com, so send yours to info@purefinancial.com and the fellas may reply to you directly, they might answer you here in the podcast, I may email you a recording of their response, or your questions might be turned into educational videos. No matter how you do it, you’re helping thousands of people who have the same question as you, just by emailing info@purefinancial.com, so thank you for that, and keep the questions coming! Now, what was that Joe mentioned about Suze Orman saying you need millions of dollars to retire??

50:30 – Joe Says Suze Orman Is Crazy Out of Her Mind (She Hates the FIRE Movement)

JA: Hey you know your favorite financial guru is Suze Orman, right?

AC: Oh yeah, I’ve always said that. (laughs) When did that come about? I remember seeing her so many years ago thinking, “boy, that’s one thing I’ll never be is a financial planner.” (laughs) I love the way someone asks a question, “REJECTED! You can’t do that.”

JA: She’s back in the limelight lately.

AC: I missed it.

JA: You’re not missing much.

AC: How did you notice that?

JA: Well, because I listen to other podcasts. So she’s been a guest on a few of the podcasts that I listen to.

AC: Okay, she’s trying to get back in.

JA: Well she updated her new book. And she asked to come on our show, I said forget about it. No, I’m kidding.

AC: She never heard of us. (laughs) That was like the one thousandth show that she might want to come on.

JA: But they’re talking about the FIRE movement. We have a lot of FIRE listeners. Yeah. You know FIRE, financial independence early. She’s like, “No. Sucks. Don’t even think about it, because you need like $50 million to retire.”

AC: (laughs) $50 million?

JA: She’s crazy, she’s out of her mind. And they were like, “Well, don’t you think maybe a couple of million dollar portfolio at a decent withdrawal rate?” Paula Pant – she was on her show, and she’s our good friend Joe Saul-Sehy, Stacking Benjamins show. But I believe she has her own podcast. I’ve never listened to it, I should though. Afford Anything, I believe – I’m giving her a plug.

AL: Paula Pant is Afford Anything. Paula Pant asked her, “what do you think of the FIRE movement?” She said, “I hate it. I hate it. I hate it.

AC: Really. OK. (laughs)

JA: Yeah, that was a pretty good impression there, just gave me chills. I was gonna get the hell out of the studio. (laughs)

AC: Well I’ll tell you, I like it. I think it’s a great movement. And I’ll tell you what. Here’s my opinion. It has nothing to do with $50 million or $5 million. It has to do with the relationship between your spending and what you have saved. That’s all it comes down to. Simple mathematics. You know what, if you can get by on pennies, then maybe you could get by on $100,000, whatever.

JA: Yeah, the people that are doing the FIRE moment, they get along with pennies because they’re saving like 85% of their income.

AC: That’s how you can retire at 35. They’re spending almost nothing.

JA: And they live in a little house.

AC: Yeah they do. Very, very tiny house, tiny car.

JA: They drink Schlitz.  (laughs)

AC: I think they drink water.

JA: Man, I could not be a FIIRE guy. I’m already past – I’m 44 years old.

AC: Yeah, you missed it. You’re still working. What an inspiration you are. (laughs)

AL: One of the things I learned at FinCon is that there’s a documentary about the FIRE movement coming out, it’s called Playing With FIRE, and of course, we are going to have the guys that are making that documentary on the show.

AC: I can’t wait for that.

JA: I can see why they passed me up. I was  40 under 40. (laughs)

AC: (laughs) Yeah well, that was old news, brother. I didn’t even make 60 over 60. (laughs) I don’t think there is such a thing. There’s not that many people over 60 still doing what we do. (laughs)

JA: They already retired. (laughs)

AC: (laughs) They figured this out a long time ago. But I want to get into the FIRE movement. I’ll be the oldest FIRE guy. “I retired at 85 because I lived on pennies.” (laughs) I’ll be a new inspiration. I’ll be talking to the generation after the millennials the next one, whatever that one is.

JA: Y or Z. You’ll get on the roadshow.

AC: The AA generation. Yeah, the roadshow.

JA: It’ll be a speaking tour. Big Al’s FIRE movement. (laughs)

AC: I’ll need it for my retirement.

JA: (laughs) Yes. Oh my god, that’s funny. That’s what happened to Mark Twain.

AC: Yeah I did hear about that – he went broke. He was a pretty aggressive investor.

JA: Yeah, he was not a very good investor.

AC: As it turned out. Because he went for it. And when you go for it all in, it doesn’t always work out.

JA: Right. And I think that’s the problem some individuals are experiencing now with this volatility. You get a little scared, you get out. But Mark Twain just rode that thing all the way down to zero. He wasn’t in a globally diversified portfolio.

AC: No, he would find some startup. “Oh, this is the one.” He put all his money in and it didn’t happen, so then he had to write some more books.

JA: Then he went on the roadshow and then he did it a comedy tour across the globe because he was broke! (laughs)

AC: (laughs) So he didn’t know about the FIRE movement. It wasn’t invented then.

JA: He did not.

That’s it for us today, thanks for listening. For Big Al Clopine, I’m Joe Anderson. The show is called Your Money, Your Wealth®.


Mark Twain’s and Warren Buffett’s investing foibles were discussed at length in our interview with Michael Batnick back in July – if you missed it, the link is in today’s show notes at YourMoneyYourWealth.com. Special thanks to our guests, our own Brian Perry and Larry Swedroe. Larry’s three tips for being like Warren Buffett: look at history, rebalance, and tax loss harvest. You’ll also find links to Larry’s latest articles in today’s show notes.

Subscribe to the podcast at YourMoneyYourWealth.com – or you can find us on Google Podcasts, Apple Podcasts, Spotify, Stitcher, Overcast, Player.FM, iHeartRadio, TuneIn, or wherever you listen to podcasts, and now you can listen to the Your Money, Your Wealth® podcast on YouTube as well! Email your money questions to info@purefinancial.com, or call (888) 994-6257! Listen next time for more Your Money, Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.