Episode 47: Slaying the Stock Market Boogey-Man
Segment 1 (Show Open):
Good day, everyone! Welcome in. Welcome to Coasting in Retirement! That’s. Right. Thanks for joining us today, we’re excited to have you! Josh Null here, joined by the one and only Michelle Lee Melton, the Bugs Bunny to my Daffy Duck, the David Bowie to my Mick Jagger …Michelle, how are you doing? Did you notice that I said “good day” instead of “good afternoon” when opening this show? Do you want to know why? Well, you’ll just have to stay tuned to some very existing news for our little radio show. We are back in Coastal College’s recording studio, beautiful downtown Fairhope, ready to put together another great show for those of you tuning in!
Listeners: Michelle and I are here today to discuss financial topics relevant to those of you in or near retirement, living your best life along our part of the gulf coast. Here’s what we’ve got in store for you today: First segment – deep dive on our topic of the day. 2nd segment - at about 25 minutes past the hour - “Michelle with the Headlines of the Week”. Then at roughly 45 minutes past the hour, stick around for our 3rd segment, we call it” Josh’s Crystal Ball and Big Mouth”. So buckle up, we’ve got a lot to get to!
Quick background on me for those new to the show. Again, my name is Josh Null, I am a fee-based financial advisor, I hold my FINRA Series 65 securities license, and I am the owner of Gulf Coast Financial Advisors, we are an independent investment management and financial planning firm with offices in Fairhope, Orange Beach, and Mobile! You can find more information on me and team at Gulf Coast Financial Advisors by visiting our website gulfcoastfa.com, or feel free to give us a call at 251-327-2124. If you missed that contact info, get a pen and pad ready because we will repeat our contact info several times throughout the show!
Michelle, you know that I love nothing more than big announcements. Grand pronouncements. So let’s me just say that I have some “Yuge” news for the Coasting in Retirement radio show. First, a little background for those of you that haven’t tuned in regularly. This radio show began way back in December of 2022, more than 2 years ago, and for that entire time we’ve been a proud member of FM Talk 106.5’s slate of weekly shows, and we plan on continuing that relationship for as long as they will have us. But guess what Michelle? We’re adding a 2nd radio station to our family! That’s right. In addition to our regular Sunday time slot of FM Talk 106.5, starting this Monday, Coasting in Retirement is ALSO going to be broadcast on WHEP, The Talk of Baldwin! WHEP is coastal Alabama’s longest running station, and our show will be aired every Monday from 10 to 11 AM on their sister dial locations, 92.5 FM and 1310 AM. WHEP broadcasts out of Foley and should be a great opportunity for us to expand our presence in South Baldwin and continue to grow our Orange Beach office. For those of you WHEP listeners tuning into our show, we welcome you, and Michelle, I thought you would be excited to know that WHEP is the Auburn Network’s longest running affiliate, 66+ years! Very exciting stuff.
Alright, let’s get to our main topic today. We titled this episode, “Slaying the Stock Market Boogey Man”. Let me start with a question: Michelle, would you agree that fear sells? Or, at the very least, that it’s one of the techniques used by marketers to sell a product or a service? Unfortunately, fear selling is used in my line of work as well. And more often than not, it’s fear-based selling intended to invoke a certain apprehension about the stock market in order to sell an insurance product. Listeners, you may be asking, how would selling the fear of the stock market help someone sell an insurance product? Ohhh, hohoho, are we going to answer that question for you today. And in the process hopefully help you overcome your fear of stock market investing so that you aren’t leaving thousands of dollars of potential gains on the table and being steered into products that often benefit the insurance company and the selling agent more than you.
We’ve got 2 major things to accomplish today. First, walk you listeners through a brief history of the stock market, using some of the major indexes as our guideposts, tying in how those index milestones impact the gains and losses in your investment accounts. Second, take this historical data and show how some advisors, agents and representatives in my industry unnecessarily stoke the fears of investors, especially those of you in or near retirement, in order to sell an insurance product, and more often than not, generate a large commission. We’re even going to give you the products these salespeople most often use and the typical sales pitch things they say so you can be prepared with information the next time you attend an annuity time share sales dinner, uh, er, I mean, an “no-obligation, educational event”.
Now, Michelle and I were both born in the 70’s, but really, we’re children of the 80’s, so for the sake of time, we’re going to start our stock market history lesson with that decade. Also brevity, let’s narrow our scope down to 3 primary measurements of overall market performance, called indexes: The Dow Jones Industrial Average, the S&P 500 and an overall composite index of NASDAQ. And for those of you confused by what a stock market index even is, let me boil it down for your b/c it’s a fairly simple premise: A stock market index measures the performance of a certain selection of stocks. Some indexes, like the Dow Jones, only have 30 stocks. The S&P 500 has 500. The Nasdaq composite tracks all the stocks trading on its platform. No matter the index, the goal is to calculate the value of those selected stocks and present it as a single number. Ready Michelle?
The 1980s: A Bull Market Emerges
The 1980s were characterized by significant economic growth and the emergence of a bull market. Key events during this decade included the implementation of deregulation policies, tax cuts under the Reagan administration, and advancements in technology. The stock market responded positively, with major indexes experiencing substantial gains.
Here’s a funny little side note – the Nasdaq started in 1971 as the world’s first electronic stock market exchange. The Nasdaq tends to have a higher percentage of tech stocks compared to the NY Stock Exchange. So that 164 number is a reflection of the Nasdaq still being a toddler. To give you an idea of where our discussion is headed today, even with Nvidia taking a dump this week and bringing down the overall Nasdaq index significantly, the average still hovers around 20k.
The 1990s: The Dot-Com Boom
The 1990s were marked by the rapid expansion of the internet and technology sectors, leading to the dot-com boom. The stock market indexes soared as investors poured money into tech companies, anticipating substantial returns. The decade ended with unprecedented highs, but the bubble burst shortly after.
The 2000s: The Dot-Com Bust and Financial Crisis
Oh, the good times are over. The early 2000s witnessed the aftermath of the dot-com bust, leading to a significant market downturn. The decade was further challenged by the 2008 financial crisis, which caused severe disruptions in financial markets globally. This is one of the only decades where you will see some of the major indexes lose ground over 10 years, but despite these challenges, the market showed resilience towards the end of the decade.
THIS will be the decade you will see illustrated on the PowerPoint during your annuity time share sales dinner. How do I know this? Cause I tried doing one of these seminars a few years back. You all would not believe what I was told to do in order to make it a success. Annuity salespeople use the 2000’s because it’s often called the lost decade, and for investors that were particularly invested in tech, it was a rough decade. But what if you had just given up on stock market investing at the end of this decade? Let’s take a look at what you would have missed.
The 2010s: A Decade of Recovery and Growth
The 2010s were marked by recovery from the financial crisis and a subsequent period of economic growth. Central bank policies, technological advancements, and globalization contributed to the positive performance of stock market indexes during this decade.
The 2020s: Pandemic and Economic Uncertainty
The 2020s began with the unprecedented global impact of the COVID-19 pandemic, leading to significant market volatility. Governments and central banks implemented various measures to stabilize the economy, resulting in a rapid recovery for stock markets. However, ongoing concerns about inflation, supply chain disruptions, and geopolitical tensions have continued to influence market performance.
And listeners – note – these figures are only to the end of 2023. At the beginning of 2025, The Dow Jones has hovered around 44 to 45k, the S&P 500 has closed above 6000 a few times, and as we mentioned, the Nasdaq composite has been bouncing around 20k on many trading days. Does this mean that the stock market is always going to go up or that there isn’t risk in investing? Of course not, all investing involves risk. But as you have seen, there has only been one decade where a double whammy of the dot.com bust coupled with the housing market crash led to our 3 indexes being down for the year. But the other 3 decades – my goodness – how much gains did you miss out on?
Josh – talk about how FIAs are sold as market participation with no downside (not 100% true), or market like returns (maybe in the short run, but not true in the long run, the gap gets too wide), or with a bonus that is “free” money (again, not true, it’s usually tied with a longer elimination period, etc). Or how having part of your portfolio in a “protected” status allows you to be more aggressive with the rest of your accounts – give me a break. How about just build-in protections across your entire investments in the most efficient manner? Yes, volatility can suck. But you can also use volatility to your advantage.
Last note as we close this segment. If a financial advisor says that he or she is confused about understanding the positions listed on a investment account statement, you should be very concerned about what direction the conversation is headed. Despite my Economics degree from the Harvard of the Midwest, Missouri State University, I may still not have the level of sophistication that say, maybe a Wall Street trader does, but I can look at pretty much any statement and decipher your investments with a few minutes. And if I can’t, that probably means that your advisor put you in some weird crap.
Listeners, if you would like to have a free, no-obligation on the investment choices in your retirement accounts, if you would like to have an honest and open, no BS, no sales-pitch conversation about your goals and dreams, and how to tie those into a comprehensive financial retirement plan, then give us a call. You can reach us at 251-327-2124, or through our website gulfcoastfa.com. One our site, you can choose to send us a direct message, or you can click on the blue button in the upper right-hand corner to set up a 15-minute introductory phone call on my calendar.
Alright folks, coming up next - There’s always a lot going on in the world! Particularly the world of finance, investments and money. Every week we scour the internet for financial articles related to our topic of the day, especially articles that pertain to those in or near retirement. Join us after the break to hear Michelle and I discuss this week’s relevant headlines in our “Michelle with the News of the Week” segment. Stay tuned!
Segment 2 - News of the Week:
Josh: “Welcome back to Coasting in Retirement, your host Josh Null here! As we discussed before the break, every week we scour what Michelle calls the Interwebs for financial articles related to our topic of the day, especially articles that pertain to those of you in or near retirement. Our job is to help you all understand how these headlines impact you, especially when it comes to your money! Note – if you want to read our referenced articles yourself, we also include the links in our show transcript, which you can find on our website gulfcoastfa.com under the podcast tab. Now without further adieu, here’s Michelle with the Headlines of the Week!
1. Michelle: Alright Josh, our first article is from Wealthmanagement.com, titled “Don’t Fear the Froth. Stay Invested Even if Stocks are Overvalued”. In our opening segment, we only went back about 45 years into stock market history, but according to this article, a study showed that from 1928 to 2022, the S&P 500 was in bull market territory 78% of the time, which I believe means that 78% of the time, the S&P 500 was rising in value, correct? So given that math, then 22% of the time would have been a down market, referred to as a bear market, correct? Whatever the animal, this article states that history shows the stock market grinds higher far more often than it backtracks, and most investors should take a long-term outlook when it comes to investing. What do you say to clients that are very concerned about being prepared for the 22% of the time that the market is down, especially if there is a sharp crash?
https://www.wealthmanagement.com/equities/don-t-fear-froth-stay-invested-even-if-stocks-are-overvalued
2. Michelle: Next up, let’s visit with our old friends at Kiplinger’s. They have a recent article titled “Why Annuities Sometimes Sound Too Good to Be True”. I think the title would have been more accurate by stating Fixed Index Annuities. This article discusses the differences between income account values and cash account values, which apparently are NOT the same thing, even though some salespeople will point to the 7 to 8 percent number used to calculate the income account value and say that this is the guaranteed rate of return for the annuity. I re-read this paragraph several times and I’m still confused, and to be honest, I’m not even sure if saying something like this is legal. This article also cautions investors about the lure of big upfront deposit bonuses or high initial interest rate offerings. So Josh, with all of these potential trap doors, how do investors navigate the fixed index annuity sales process?
Josh: With your eyes wide open. FIAs have a purpose – capital preservation, some potential upside, possibly a little above a fixed rate of return, downside protection, and various riders such as income riders. The problem is that they are sold as the perfect investment, as the golden ticket, and the numbers are often fudged.
3. Michelle: Very well Josh, our next article is from our friends at Aptus Capital Advisors and can be found on the blog section of their website. It’s simply titled “How Do You Define Safe” and is written by Aptus Founder JD Gardner, who has appeared as a guest host of this radio show a couple of times. JD discusses inflation and the practical effect on consumer’s purchasing power but also dives into how monetary supply and deficit spending should be the true benchmarks for investor’s real return goals. He makes a pretty compelling case for owning growth assets, of which stocks would be the most well-known option for investors. I know you and JD have discussed these investing principles at length, so I’ll turn it over to you to make the case that what investors often view as safe money is in fact the opposite.
https://aptuscapitaladvisors.com/how-do-you-define-safe-2/
4. Michelle: Last article of the day Josh, found on Barron’s. It’s titled “Nvidia Stock is Dropping, Why It Is Sitting Out the Chip Rebound.” So here’s what I learned this week along with every other retail investor: apparently a company in China called SeatGeek or Daisy Jones & the Six or something (Josh: DeepSeek) and they successfully developed an AI language model for a price tag of $5.6 million while it has taken American companies billions and billions of dollars to develop their own models. This news caused Nvidia’s stock to drop a whopping 17% on Monday, spooking many investors about the future of AI and causing a significant drop in the Nasdaq. So here’s my question to you Josh – why is everyone freaking out over this?
Josh: Because this means that investors have been fooled by one side or the other. Either our large tech firms are wasting billions of dollars on something that can be done cheaper, or China is pulling the ultimate troll job.
https://www.barrons.com/articles/nvidia-stock-price-deepseek-ai-chip-makers-a3e00652
Josh: Listeners, I hope you learned something from our discussion around these recent financial headlines, all of this matters to your money! Speaking of money, if you would like to start the conversation with us about your investments and retirement planning, then why don’t you give us a call at 251-327-2124, I know when radio show leads call in so I’ll often answer, or you can always reach out to us via our contact page on our website, gulfcoastfa.com. Don’t forget to click the blue button in the upper right corner to put a 15-minute introductory phone call on my calendar!
Alright folks, coming up next: Josh’s Crystal Ball and Big Mouth. What have been some of my predictions? Have I been right? Was I ever wrong? How wrong? What do I think is going to affect investors in the near future, or maybe the distant future? We talk about all of these things and poke a little fun at my big mouth. Stay tuned!
Segment 3 – Josh’s Crystal Ball and Big Mouth:
Welcome back! Your host Josh Null here, alongside co-host Michelle Lee Melton. So, I am opinionated, I have strong opinions at times, I would say a radio show host that isn’t probably wouldn’t be very interesting to listen to. And I am paid in my profession to offer professional guidance and opinions to my clients, otherwise what use am I? Just replace me with AI. I like making predictions, and while I usually proved right, there are times I swing and I miss. Want to hear me eat a little crow? Then let’s get at with Josh’s Crystal Ball and Big Mouth.
Michelle: Well Josh, since it’s still early in the year, and we’ve already picked on your big mouth and mis-fires from last year, maybe it’s time to re-load the cannon and blow out some new predictions for 2025? And let’s tie it into our topic of the day. First, we discussed 3 major stock market indexes: the Dow Jones, the S&P 500 and the Nasdaq composite. I’m going to round off on where those indexes currently sit – about 45,000 for the Down, about 6000 for the S&P and about 20,000 for Nasdaq. Where will those 3 be at the end of the year, hmmm Josh? We’ve also discussed on previous episodes about sales totals for fixed index annuities, and how every year they break a new record, including a whopping $125 BILLION last year, a 31% increase from 2023. So what your prediction for total FIA sales?
So the table has been set on predictions, we will check back later this year to see how accurate I was. In the mean time, listeners, one last time, if you would like to have a free, no-obligation conversation on the investment choices in your retirement accounts, if you would like to have an honest and open, no BS, no sales-pitch conversation about your goals and dreams, and how to tie those into a comprehensive financial retirement plan, then give us a call. You can reach us at 251-327-2124, or through our website gulfcoastfa.com. One our site, you can choose to send us a direct message, or you can click on the blue button in the upper right-hand corner to set up a 15-minute introductory phone call on my calendar.
Folks, that is it for this week! I want to give a huge thank you to my lovely co-host, Michelle Lee Melton, thank you to our show sponsor, Providence Partners, thank you to our long-time awesome radio station FM Talk 106.5 out of Mobile, and a huge welcome to those of you just tuning in on WHEP 92.5 FM & 1310 AM, many thanks to the provider of our show music, local band Sloth Racer, huge thank to the show producer, my son Payton Null, and as always my sincere appreciation for all of your out there that have been listening and joining us on this journey. We would love to be a part of your journey as well! Until we talk again next Sunday, have a wonderful and productive week. This has been Coasting in Retirement with Josh Null!
GCFA Disclosure:
Gulf Coast Financial Advisors, LLC ("GCFA”) is a registered investment adviser offering advisory services in the State of Alabama and in such other jurisdictions where it is registered, filed the required notices, or is otherwise excluded or exempted from such registration and/or notice filing requirements. Registration does not indicate or imply that GCFA has attained a particular level of skill or ability, nor does it constitute an endorsement of the firm by the Securities and Exchange Commission (SEC) or any state securities regulator.
The Coasting in Retirement radio program serves mainly to disseminate general information including those pertaining to GCFA’s advisory services, together with access to additional investment-related information, publications, materials and links. The publication of this radio show should not be construed by any client and/or prospective client as GCFA’s solicitation to effect, or attempt to effect transactions in securities, nor should it be interpreted as GCFA providing personalized investment advice, or any type of professional advice, for compensation, wherever this program is broadcast. Any subsequent, direct communication by GCFA with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.
Certain information, news stories, headlines, data, charts, graphs, figures or statistics presented on this radio program may have been obtained from third-party sources that are believed to be generally reliable but which GCFA may not have independently verified. GCFA does not and cannot guarantee the timeliness, accuracy, or reliability of any such third-party information and undertakes no obligation to update or correct any information that may become obsolete, unreliable, or inaccurate. The radio program also contains the opinions, views, and perspectives expressed by Josh Null and any other GCFA representatives which are solely their own, and do not necessarily reflect the opinions, views, or perspectives of GCFA as a firm. Such personal views and opinions should not be construed as endorsements or professional advice from GCFA. GCFA makes no representation or warranty regarding the accuracy, completeness, or reliability of any information on this radio program, and disclaims any liability for any direct or indirect loss or damage incurred from using or relying on such information.
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