- What people really want to know is,
what do we do now?
How do we invest in times like this?
So can you talk a little bit
about what people have invested
in the past during a
recession and whether or not
that's an option right now.
- Hey there, welcome back to my Channel.
Today, we are going to,
again, talk to Ellis Miller
and if you didn't catch it the last time,
apple, tree, yes.
Father-daughter here working
together at Pleasant Wealth.
And we're continuing the
conversation about recessions.
And on this video,
what we want to talk
about is a little bit of
what we've seen actions
people have taken in the past
to try to accommodate a recession in their
own investment portfolio
that really just don't work.
And so, kind of talking
about the do's and don'ts
of a recession.
So, before we get into that,
don't forget to subscribe to this channel
for a regular Pleasant
Financial conversation.
- One of the big messages from the past
was this idea of using a
mix of stocks and bonds.
And that has worked
for many, many decades,
and it might work in the future,
but it's pretty clear that
it's not going to work quite as
well in the future, as it has in the past.
The reason for that is,
there's a lot of fear out there
and people have moved to safety.
Supply and demand has never been repealed.
And the result is that bonds
are now at the highest price
they've been almost ever.
That's why interest rates are
low and bonds are even more,
by some measures, even more
high priced than stocks are.
- In retirement planning of the past,
the idea was that, with the
money that you were planning
to risk, in the market you would go with
maybe some stocks.
And if you were looking for security,
you would either go to bonds
or CDs or some other form of
safe place for them.
However, it sounds like,
bonds really aren't
a great place to get any
type of return nor are CDs
because interest rates
are low. Is that right?
Is that what you're saying?
- It puts us in a bind.
- Yeah. - It puts millions
of people into a bind.
- Yeah.
So, a phrase that we've talked about
here at the office is Tina.
- Tina, eat.
Eat the food.
- There is no alternative.
- What does that mean?
- The acronym, Tina T I N A stands for,
There Is No Alternative as Liz indicated.
And that is... We're
seeing that more and more
that there is no real
alternative to stocks.
Now, maybe some people like real estate,
are thinking there's
no alternative to that.
However, with the pandemic,
the use of real estate
is now being reassessed.
So, this whole idea of
no alternative to stocks
seems to be present,
whether we like it or not.
- So with that, that's
hard sometimes to hear
for folks who are more
on the conservative side
of investing because,
they want some growth,
but are not willing to risk
all of their money towards growth.
So what happens to those people
where there is no alternative for stocks?
What should they be...
What are the options?
- Well, if they're concerned
about running out of money,
they may have to take more risk.
And it's almost as if all the
policies are coalescing into
trying to force people to
take a little more risk.
That is to be in... To
own chunks of companies.
I mean, that's really what stocks are.
That is a big leap for many, many people.
- Yeah. Yeah.
People are not accustomed to having to
take that type of risk.
- Correct.
So maybe one way to
reduce that visceral fear
would be to own better companies.
Companies whose balance sheet
doesn't have as much debt on it.
You want to stay very far away from
what they call zombie companies.
Companies that are so strapped for cash,
that they can hardly make
their interest payments.
See you've got to stay away from those.
Whether they're popular or not,
you need to stay away from those
and invest in companies
that are really strong,
that will be around.
- And then for people who
are nearing retirement,
what should they be shifting
their investments to do?
Or where is a good hiding
place for some of their money?
- Well, they almost have
to have some sort of
a buffer system where
there's a pool of dollars,
maybe several years worth
of income in some sort of a,
non-variable, very safe environment,
a bank account or something like that.
It's very different from
relying on a 6% dividend
from a bond, which could
have been done 10 years ago,
but not now, those days are gone for now.
- Well, it definitely puts this pandemic
and the way that the
economy is at this moment.
It really puts our
retirees in a bind because,
it feels like there's no real way to turn.
And so, if you're investing on your own
or really don't have a confidant,
an investment advisor that you
feel is comfortably leading
you and helping you walk through
the choices that you have,
it can feel really unsettled.
And so that's why here at Pleasant Wealth,
we like to... Our main focus
is to work with retirees
or soon to be retirees.
To help them map out what
their retirement income can be,
what their options are for investing,
if depending on your type of risk
and help you understand
what the pros and cons
of each decision are.
Because, you can't take a
full step towards retirement,
without really knowing what it is
and what to expect with
your investment portfolio,
with your retirement income and
what life would look like in that case.
- I have one more thing.
The other solution that is sometimes used
could be some sort of
an insurance solution.
Where you can not run out of money.
And it takes many different forms
and would be a conversation of its own.
Often, an insurance solution is perhaps
oversold, overbought.
- Yeah. - But that doesn't
mean there isn't room for it.
There are times and places where
you can design a pension so
that you don't run out of
money, but don't overdo it.
- Yeah, actually, that's
a really good point.
A couple of years ago,
I made a video talking about annuities
because it's such a buzzword.
And if you've heard the word,
you've probably heard
someone screaming at you,
"That's the worst investment ever."
And somebody else saying,
"No, this is the greatest thing for you."
So it's hard to know what it is.
So check out that video,
I'll put it in the link up here.
And it's annuities. Good or bad.
So, help you kind of understand
the pros and the cons of an annuity.
At our firm, we're not married to the idea
of using an annuity,
but for some people,
it really makes sense.
For some people, it doesn't.
And so, just knowing that that
is an option on the table,
is good information.
All right?
I think that's all that we have for today.
Thank you so much for tuning
in friends. We appreciate it.
And as you are navigating this recession,
if you are feeling unsettled
and would like to speak to one
of our advisors, you're
welcome to go to our website,
www.pleasantwealth.com
to request a meeting.
And we would love to have
a conversation with you
over zoom or in person if you're local.
To kind of help you figure
out where you're at today,
where you hope to be in the
future and what those hurdles
are in between that's keeping you
from getting to where you need to go.
So until next time friends, you take care.
