Episode 209

In this episode, Mark talks about Google, Apple, Microsoft, Amazon, and J&J - at least two of those are always in the top three holdings of most portfolios. As these stocks go, so will the S & P 500 or the Nasdaq and DOW. Mark answers a common question; how many stocks should I own based upon my age? It depends on income needs and retirement - most investors feel like they are diversified, but that is only a part of it. Asset allocation is just as important, if not more important. He says he likes to correlate volatility with risk, so if your portfolio is adequately asset allocated, volatility is a tool. Volatility is mandatory for successful investing. Investors can also own bonds for beta mitigation - it's a function of reducing volatility in your portfolio and give you access to capital for your income needs during a corrective phase. The process, flexibility and transparency are important. As inflation goes up your purchasing power goes down and most investors focus on the rate of return of their portfolio. The most important part of investing is purchasing power.

July 31, 2017

Episode 208

In this episode, Mark talks about SMAs, which have the greatest control and knowledge with what is happening in your portfolio. He also talks about the “inflated market” - on a valuation basis it is NOT inflated, and VIX, the Volatility Index, which gages the markets volatility. Many will use it as a hedging tool against the stock market. Mark also discusses businesses that Nepsis is invested in and about how BAIDU performed over the lat 10 years. In "Headline vs the Bottom Line", he discusses: Are bonds safer than stocks? People focus more on the stock market than they do on the bond market and the investor thinks about risk in the sense of volatility. Investing is about risk adjusted return. But what about interest rate risk? Or inflation risk? Are bonds safer than stocks? On what terms and at what price am I buying this investment? People do not know what they are paying for in the underlying investment. Interest income is taxed at ordinary income. The bottom line is, inflation risk and purchase power risk and there's volatility with risk. No one stock should make or break your portfolio; every position working together is what makes a portfolio strong.

July 27, 2017

Episode 207

In this episode, Mark talks about how over half of Americans have zero money in stocks. People love to hate bull markets. The mentality of the investor is investing in the market. The power of investing for success can help you become a better investor. If I want to enhance my ability to be successful it would be fair to say I would want to take advantage of everything I can. People creating businesses and making profit in that business - the greatest path to wealth creation. We make money, work hard, and we save. We go give our money to an advisor or institution to help us make good financial decisions. Wouldn’t it make sense the we would want every advantage possible? The ability to be successful: include flexibility and transparency and strategic cost averaging - when you buy things on sale you reduce your costs basis.

July 25, 2017

Episode 206

In this episode, Mark talks about how FANG stocks are helping the performance of the stock market. The bigger the market cap on the stock, the more it effects the stock market. Money made in the markets has been done by having more of a concentrated portfolio. Of the $36 trillion that has been created in the markets, half of it has come from a very small number of businesses in the portfolio. Since 1926, 1,000 stocks account for the $36 trillion in gains. The rest of the stocks did nothing. How do you hedge? Strategic cost averaging, which is strategically adding unequal dollar amounts to the portfolio in areas. Volatility is so important! Markets as a whole are not over valued and there are some stocks that are overvalued. In the absence of value price becomes the main point. The media is teaching people to blinding trust systems without proof of what it can do. When you’re buying an index, where are you putting your money? It is not appropriate asset allocating.

July 24, 2017

Episode 205

In this episode, Mark talks about how expensive the investments you own are. It doesn’t matter if the market is expensive, it matters if what you own is. Nepsis doesn’t sell a product, it sells a process. He discusses an article: “this bubble is about to burst!!!” So many economic indicators are performing poorly but the market is high. Forbes: “why is wall street winning right now and everyone else is losing?!”. The Fed is not allowing corrections to happen. Fixed annuity being used to “protect your assets from a correction”. But to protect you from what? Investors invest in businesses, but they invest in too many businesses. They need to bringing the investments and planning together. In his segment "Headline versus the bottom line, Mark talks about how most headlines are negative in nature. Another article: another night another high for the Dow that says “the Fed has the markets back”. The stock market can’t be a gamble if you don’t invest in it, but instead focus on businesses.

July 17, 2017

Episode 204

In this episode, Mark talks about the stock market closing the first half of the year at an uncommonly smooth ride. But a “historic market drop” will come. What are markets going to do? The stock market is the vehicle that allows you to invest in the investments you own! Investing in businesses is a process over time and technicals are a framework of information. Investors look at a specific point in time, is that your ending? Most likely not. You don’t lose money unless you sell. Most companies take advantage of you, to charge you with fees and make it confusing. People are focused on the wrong things - the price over short term is irrelevant, except for providing opportunities. Do not do target date funds and pick the best funds out there. Every company has someone who picks funds for their 401k. Target date: portfolios that are automatically allocated for you.

July 13, 2017

Episode 203

In this episode, Mark talks about anxiety index from Investopedia. There are two forms of investors:

1. People who say when you invest money you invest it into the stock market and you do so buying indexes. Don't invest in businesses invest in the market, just own the stock market.

2. The stock picker, the manager who invests in businesses

The bull market is a market where the stocks are going higher over time. Bullish sentiment is that stock prices will rise. This is the 24th time out of the last 25 weeks that optimism is below historical average of 38.5. The valuations of a market or a business is relative, not absolute. Mark also talks about the CRSP database and monthly returns for every stock. The issue isn’t where you go for the best returns, it's which stocks you choose. It's about diversification, not over diversification and investing in good businesses over time.

July 11, 2017

Episode 202

In this episode, Mark talks about algorithmic investing and ETFs. People are underinvested in equities, they say “equities are risky”. ETFs are Change Traded Funds and are a fund that is traded on an exchange. They have marketable security and trades like a common stock on a stock exchange. You can buy and sell at anytime when the market is open. Investors do not understand what they are buying and what they are invested in. ETFs encourage a trading mentality not an investing mentality. The more complicated you make investing the easier it is to get people to move their money. Do not look at cost - look at the solution to the problem. He discusses an article: “blame the automated trading program and algorithms”. Don’t get caught up in the buzz!

July 10, 2017

Episode 201

In this episode, Mark talks about 401(k) and three reasons investors should care about DOL rule:

1. Your advisor will now have to act in your best interest 

  • Most of you think that they did work in your best interest. but did they?
  • Suitability standard: a little more opaque
  • Might have something suitable for you, but it may not be what is BEST for you

2. Bring transparency to fees

  • Conflicted advice usually leads to higher fees and confusion
  • Most don’t know what any of the fees are
  • There are additional fees you are unaware of 
  • Limit advisors to “reasonable” compensation
  • Misleading statements and conflict of interest decrease

3. It is no substitute for vigilance

  • Rules final fate is still uncertain
  • Provides a layer of consumer protection

June 20, 2017

Episode 200

In this episode, Mark talks about how investing is a process over time. Is your portfolio complicated? Is it too complicated? Investing dos not need to be complicated! You should never be complacent about your investments. The theory is that Amazon is going to shrink profit margins in regards to Whole Foods. Millennials want fresh organic food. Trading is going to be unpredictable, flash crashes. Many investors rely on a financial advisor to give them advice on their portfolio. Sometimes investors hire an advisor just to have someone there to talk them off the ledge. Managing the emotions of an investor is part of the process. Are you a value investor or a growth investor? It's based on valuations of companies and is relative. Many advisors use analytics that are conducive to your goals.

June 19, 2017

Episode 199

In this episode, Mark talks about how in a rising interest rate environment bonds will be worse to own than stocks. mutual funds own great business but they are opaque and access to information is not available until later. He also talks about closed end mutual fund; open ended mutual fund. Mark also discusses an article that says, “adding new mutual funds is way easier than reorganizing your portfolio”. How many mutual funds should you have? If you have more than 8 mutual funds chances are you need to do some serious portfolio cleaning. A mutual fund is a diversified portfolio of investments. Spread risk out in an asset class. Under asset allocating is not having an allocation strategy that goes along with your goals. "In order for your portfolio to be successful you should be invested in domestic and foreign stock funds, fixed income funds”. Blend of the concept of asset allocation and diversification. If you are retired you need to asset allocate so you have greater withdrawal for when you need money. Your asset allocation determines how volatile your investment portfolio is. Risk is a function of how much you own of each asset. Investors are short term thinkers. Stock movements are coming from computer movement.

June 14, 2017

Episode 198

In this episode, Mark asks, what is your biggest financial risk? Most people do not know. Is your portfolio doing the best it can? This is a very legitimate question. Going through statistics, people are worried about “political uncertainty” yet markets are up. Markets rise on worry and markets do best when people are worried and nervous. People are not focused on the value of businesses. They say, “the stock market is confusing”. Every investor has different goals, objectives and needs; it can not be cookie cutter. You need to put a process into place that you can execute. It's just as important as it is to buy, it is equally if not more important to sell. When you rebalance your portfolio it forces you to buy low and sell high.

June 7, 2017

Episode 197

In this episode, Mark asks, are your investments going the best they can? Are you on track to reach your retirement goals? 48% of Americans are “pretty sure” have no idea whats going on with their money. There's an emotional cat and mouse game with yourself while guessing which way a stock is going to go. Are you on track to reach the things you want most? Investing is not just a factor of crunching numbers. 

June 5, 2017

Episode 196

In this episode, Mark talks about “Millionaires are more afraid than ever. Nearly 40% are not investing” (CNBC). Stop relying on the market and rely on the fundamentals of the businesses you own. He talks about pessimism, optimism, and euphoria. If you don’t have time to mess with your investments, then don’t worry when they go down! Investment decisions should be based on policies that spur economic growth and expansion. Corrections are needed to investments to get to all time highs over time. Investor of today does not profit from yesterdays growth.

June 1, 2017

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Episode 195

In this episode, Mark asks, why be scared of a correction if you aren’t going to take your money out anyway? It's important to stick to the knitting. If it has proven successful for you over time you most likely stuck to a process. Should you buy life insurance? Life insurance is an investment, used for multiple reasons. Do you need life insurance or would it be beneficial is something you should discuss with an advisor?

May 24, 2017

Episode 194

In this episode, Mark talks about black swan events, investors fear these events the most. Corrections are not driven by these events, but by short term sentiment. The smaller the correction the larger statistical probability that you will be wrong. Stock splits are utilized and used for specific things! He also talks about the DOL. Last fall, new rules came out about commission in regards to broker dealers.

May 23, 2017

Episode 193

In this episode, Mark talks about valuation issues of the market, investor behavior, compound interest and rate of return. What is the yield and the return? Many investors do not understand how bonds actually work. When you get a bond you don’t get that money back until the bond hits maturity. The interest rates fluctuates, so the value of your bond does as well. How long until the bond matures, what is the interest rate you are receiving? When interest rates go up the value of bonds is going to go down depending on the maturity - you should not focus on yield and short term rate of return. Focus on total return: the combo of both. Many investors aren’t willing to be invested long enough in order to take advantage of compound interest. They focus on the movement of a stock, not the reasons why they own it. The ability for the investor to understand their emotional predisposition to making decisions based on emotions is important. 

May 22, 2017

Episode 192

In this episode, Mark talks about how you need to know the fundamentals of company and do not become myopic in the process of investing. In this earning season, stocks have moved in extreme direction. He talks about the “stock pickers market”: the market is overvalued, stocks are expensive, just sit in cash and wait for correction. Transparency and flexibility create the opportunity to invest in businesses at appropriate times. You should rebalance: look at your portfolio and you move your portfolio to the target percentages that you want to own in your portfolio. Not one position can make or break your portfolio - there are no guarantees!

May 10, 2017

Episode 191

In this episode, Mark talks about how investing is a combo of empirical and behavioral data point. People change advisors when portfolios don’t perform up to their expectations. Their expectations are different than what a process can offer them. The best performing managers do best over longer periods of time. You should create a list of expenses you will have when it comes to budgeting for your retirement. Investors force themselves into a position where they expect their spending to drive their investments. People think the stock market is irrational, but it's the investors who are irrational. A plan is only as good as your ability to stick to it and risk and volatility should not be in the same category - volatility may be a risk for some but not for all. Investors just do not know, they listen to the news and they overreact. If your portfolio is going down, you don’t lose anything until you sell. Investment success is not about returns, it's about a plan and a process.

May 8, 2017

Episode 190

In this episode, Marks answers the question: why should I pay a financial advisor? They're there not just to provide you with details and information, but an advisor is there to help you not make mistakes. Your advisor must lead, guide and direct you! Investors are not aware of the risk taken for the returns they have. Money is in a cookie cutter process and investors don't understand the intangibles associated with that. Investors often ask, what am i paying you for? There is intangible value for paying a professional to help. If you’re a long term why would you care about an investment? Mark also talks about the PE ratio, weighted index, market capitalization of the companies, and other topics.

May 3, 2017