Episode 54: Just Stop It
Segment 1 (Show Open):
HELLO Lower Alabama! Hello Gulf Coast! Welcome in. Welcome to Coasting in Retirement! That’s. Right. Man, what a great show we have for you today. Thanks for joining us, we’re excited to have you! Josh Null here, joined by the one and only Michelle Lee Melton, the hot sauce to my breakfast burrito, the jalapenos to my cheese nachos…Michelle, how are you doing? 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!
Michelle and I are here 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, that’s a 100% locally owned, 100% independent investment management and financial planning firm with offices in Fairhope, Orange Beach, and Mobile! You can find more information on me and the 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!
Alright Michelle, for today’s episode I invented a little game for us to play. Regular listeners know that I tend to be skeptical of a lot of things related to my own industry, financial services, including a lot financial advertisements and glossy marketing content masquerading as responsible financial advice, as Michelle knows firsthand, I get very, very irritated when I hear someone in my line of work espouse a bunch of info that is nothing more than sales BS. And in times of market turbulence, this type of misinformation gets shouted from the roof tops. So with that in mind, we’re going to play a little game of “Just Stop It”, kind of like true or false, except, everything Michelle is going to say is false, and I’m going to try to smack some sense into those of you listening that are considering these financial tactics. Ready Michelle?
Alright Josh, first up: Investors should hold 5-10% of their portfolio in cryptocurrency. Josh: Just Stop It. This is a number that’s just made up because it sounds reasonable, but if you hold 10% in an asset that can go to zero literally overnight, that means you have to make a 20% return to recoup from your mistake. It’s one thing to hold a diversified portfolio of well-established assets that just happens to down 10% because of a market dip. It’s another thing to have an asset lose most or all of its value with no proven path of ever regaining that value. Go on to explain the 4 broad types of cryptocurrencies (NFT’s, stablecoins, Bitcoin and Ether, memecoins) and how they are nothing more than a speculative asset.
You should convert your traditional IRA to a Gold IRA. Josh: Just Stop It. Now, owning some gold as a hedge against inflation, fine. What Michelle is referring to are the advertisements that encourage you to put some or all of your assets into precious metals, like gold. Go into the history of returns on gold using Smart Asset article, lack of revenue, liquidity. Also, the go entirely into gold sometimes runs along the lines of doomsday preppers, and while there’s nothing wrong with being prepared for the worst, and I guess if the world does have an Armageddon event, some physical gold would be handy, but I would rather be part of the solution, be part of helping my neighbors, than hiding in a bunker with spam and gold bars. But that’s just me.
I have no worries about retirement because my advisor, er, salesperson, set me up with an annuity that guarantees 7% return with no downside risk. Josh: Just Stop It. This annuity has a 7 percent floor or a minimum 7 percent **guaranteed growth – like my Grandpa Eldon would say, that’s a dad gum lie! This is the biggest misconception among annuity consumers/researchers that have been “pitched” an annuity. Unfortunately, the seven percent growth guarantee is not on your cash value – surprise? The seven percent guarantee is on the formulaic account value used to calculate your future income. Does it have value – Yes. Does it guarantee a future income amount – Yes. Can you walk away with a lump sum of money that experienced seven percent guaranteed growth over the life of the contract – NO WAY. Return of your money vs return on your money.
I can totally trust my advisor that I met through a dinner seminar because it looks like he or she makes a lot of money.
Just Stop It. First, listeners need to understand a couple of the little dirty secrets about my business. First, your advisor that drives an insanely expensive car probably has an insanely expensive lease on it, as a rule, financial advisors are not great about following their own advice, and second, most advisors with minimums on clients’ accounts often wouldn’t have enough investible assets to meet the minimum required to be their own client. As far as dinner seminars go – as a rule, they are very expensive, and for most fee-based and fee-only financial advisors, the numbers just don’t make sense because it takes a long time for a client to become profitable in the fee-for-service world.
In order for the dinner seminars to make sense financially for the advisor, they often have a product to sell that pays a large upfront commission. Enter Fixed Index Annuities and Annuity Shops. Explain how dinner seminars are typically funded through the sale of fixed index annuities, usually backed by an Independent Marketing Organization, how IMO’s work, how these types of “advisors” are always on the hunt, often ignoring you after the transaction is placed and giving you to a junior advisor. Been directed to go through a middleman to reach your advisor after all the paperwork is complete? Congratulations. You’re at an annuity shop.
The recent government cuts conducted by Doge are going to have a significant impact on the federal deficit. Josh: Just Stop It. First, explain how much spending is tied to entitlements. We as a nation, are getting older, and quickly. In my opinion, and it’s my show so I’m entitled to it, if we want to get serious about deficits then we need to get serious about treating our young folks as adults at an early age and getting them into productive work quicker, and, couple that with incentives for people to continue working later in life. Make our wider productive labor lifespan greater, and have strong incentives for people to delay claiming their entitlements. For example, your social security will keep increasing in benefit the longer you wait to claim it, up to age 70, then it levels off. What if you made social security benefits for those willing to wait to claim until ages 71-75 extremely lucrative?
Investing in the stock market is just like gambling. Josh: Just Stop It. No, gambling is just like gambling. Crypto is just like gambling, or at least, the greater fool theory of investing anyway. Explain how market valuations work, what a stock actually is, revenue, etc., that it can be risky but here’s how to handle it.
My investments inside my indexed universal life will grow just like the stock market, but with no downside risk, and I can access that cash value easily, at any time. Josh: Just Stop It. Index Universal Life insurance policies, or IUL’s for short, are complex and should be reserved for sophisticated investors with a specific need. First, there is the cost of insurance that is often overlooked. Then it can be problematic to take an actual withdrawal of your cash balance, more often than not you’re encouraged to take a loan. For those of you listeners being pitched an IUL, especially if you are seriously considering buying it – write these 2 things down. 1st, only look at the guaranteed portion of the illustration you’re being shown. Anything you get above and beyond that is gravy. The hypothetical illustrations, while at least giving you a potential performance outcome, are often not worth the paper they are printed on. 2nd, ask your producer for what’s called the ”target” premium. Write that number down next to your total premium number, then give us a call. If you’re dead set on buying an IUL, we can undoubtedly get you something with a lower target premium, which means more of your hard-earned dollars go to your benefit vs increasing the profitability of the insurance company and the commission of the salesperson.
All you financial advisors are just the same, just trying to sell me something. Josh: errr, maybe accurate on the 2nd part but Just Stop It on the first part. Briefly explain the different types of advisors, but do be honest that any advisor in growth mode is probably trying to sell you something, including me. What’s important is what is being sold and that the investor understands what they are getting into.
That was fun, huh? If you’ve liked what you’ve heard so far and want to start the conversation about your own personal investing and retirement goals and dreams, we encourage you to reach out to us. You can reach us by phone 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. Plus for those of you that like to do business in person, like I do, you can always schedule a no-obligation first meeting at any of our 3 convenient locations: downtown Fairhope in the Portico building, or Orange Beach off Canal Road, just down the road from the Wharf, or in Mobile, near the intersection of Dauphin St and I-65. We would love to meet you!
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 Headline of the Week” segment. Stay tuned!
Segment 2 - News of the Week:
“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, or at least we tell ourselves it is, 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. Alright Josh, let’s just dive into the investing elephant in the room, shall we? I’m talking tariffs. A whole lot of tariffs. From Fox Business, our first headline reads “Stocks rocked after Fed’s Powell talks tariff impact”. Most major indexes experienced yet another sell off after Fed Chairman Jerome Powell stated this week that the Fed is going to “stand down” on any upcoming rate cuts because the tariffs were, in his view, larger than expected. How much should the average investor be concerned about all of this tariff and interest rate talk?
So the first thing investors need to understand is that Jerome Powell don’t give a…poop. I’ve never seen a Fed Chair so seemingly unconcerned with anything other than his primary goal of breaking inflation. He is the opposite of Alan Greenspan, who served for almost 20 years. I’m confident he is going to come under a lot of fire the next few weeks, interested in seeing how that plays out. In regards to tariffs, I’m putting on my virtual economics hat supplied to me by the Harvard of the Midwest, Missouri State University. Is it OK to still say Harvard…? I took countless economics courses in college. Not one of them ever said that tariffs would reduce the prices of goods, or even keep prices level. Tariffs will undoubtedly raise prices on certain things, it’s a mathematical certainty. And usually prices go up, which is called inflation, the Fed typically raises rates, not reduces them. Higher prices and higher interest rates is called Stagflation, those of you that we adults when Carter was president will recognize the term, and that is something the stock market does not want to see. And what made last week so alarming is that when investors flee the stock market, they typically go into “safe” investments, one of those being long term treasuries. That was not happening. What does that mean in plain English? That investors broadly had lost a certain amount of confidence in United States Federal Government, and the dollar. That is not good.
That said, what we don’t know is if this will have the intended effect of increasing production of high level goods in American factories. There is a lot of pontificating going on, both by professional analysts and by your FB friend that barely made it through high school algebra but is now somehow well versed in international trade, so here is my advice to investors out there. Trust me when I say this: no one knows what is going to happen. My Dad has a saying, “anticipation of the event is always worse than the actual event”. So while this is unprecedented and you shouldn’t necessarily ignore it, chances are the impact of all of this will land somewhere in the middle and both sides will claim some sort of victory. What you, the investor, can control is to partner with a financial team that has a plan for times like these. If you want to hear more on how GCFA handles market uncertainty, give us a call at 251-327-2124
https://www.foxbusiness.com/markets/stocks-rocked-after-feds-powell-talks-tariff-impact
2. Next up Josh, U.S. News & World Report. Their recent article is titled “Recession 2025: What to Watch and How to Prepare”. This article details how several economics models are putting the chances of a recession in the next 12 months in the 30-50% range, and dives into the macroeconomic reasons why, including the unknown impact of the ongoing tariff battle. Now this article makes an argument for selling volatile stocks, looking for defensive stocks such as Wal-Mart, investing in a CD or simply going into cash and sitting it out. What say you?
When anyone asks me if we are going to go into a recession, I always answer “yes”. Is that because I am a pessimistic person? No. It’s because our capitalism-based economy was built to experience recessions. In fact, it wouldn’t function without the occasionally “cleaning-out of excess capital” and re-appropriating of that capital to other future growth opportunities once the current horse has run out of power. As someone that deeply, deeply felt the effects of the Great Recession of 2008-2009, I was a developer and home builder then, I can tell you that recessions can result in real pain to everyday people. That said, I implore the listeners to not be terrified of the potential of a recession. One, on the investment management side, your portfolio should have a plan when the market is struggling or experiencing high volatility, like we do at GCFA.
Two, investors with longer-term financial goals have another alternative as well – simply ignore a recession and stay the course. Chris Brigati, chief investment officer at SWBC, says recession risks also create opportunities for long-term investors. "Markets correct and adjust over time as exogenous shocks occur," Brigati says. Since 1946, the S&P 500 has dropped an average of 32% from its highs during bear markets but has taken an average of just 23 months to fully recover those losses. "Ultimately, this situation, while painful for invested assets, offers some opportunities to invest at lower valuations, and eventually the market will recover and investors will be rewarded," Brigati says.
https://money.usnews.com/investing/articles/recession-2025-what-to-watch-how-to-prepare
3. Speaking of good financial advice, let’s pivot to an area we probably all agree typically gives terrible financial advice yet has the ears of millions of investors: social media. Your buddy ol’ Chuck Schwab has an article on his site titled “Social Media and Your Money: Follow with Caution”. This article has common sense advice, but I thought it was important to bring up because often during turbulent times, people get more desperate for answers around financial questions. Josh, tell us a little bit more about the dangers of listening to social media “Fin-fluencers” or those claiming to have the golden ticket to riches:
I talked about this on the last episode with Jay Stubbs - my own ridiculous experience with following terrible advice from a charismatic figure with the Rich Dad Poor Dad book by Robert Kiyoski. Also – as we discussed in the opening – be very careful with cryptocurrency, ask your listeners that follow crypto to think hard and see if they can send you one name of a FEMALE crypto influencer, the answer is probably no b/c crypto attracts aggressive young men, the same men typically attracted to gambling. If you were in a casino and a casino employee was giving you gambling advice, would you take it? Because that’s what you’re doing when you listen to these guys.
https://www.schwab.com/learn/story/social-media-and-your-money-follow-with-caution
4. Alright Josh, you’ve discussed “hedged equities” a lot on this show, particularly on the episodes where JD Gardner of Aptus Capital Advisors has joined you. I know from these discussions that the goal of hedging a portfolio is to attempt to take advantage of stock market volatility, so I would imagine this concept is being put to the test this week, correct? Josh – Yes. So for our last article I turned to trusted site Investopedia, with their article titled “Hedge Definition and How It Works in Investing”. How does Gulf Coast Financial Advisors use hedges in its clients’ portfolios, and why do you think this is the best strategy?
One needs to look no further than these past few weeks to realize that just buy and hold has it’s disadvantages, as does sitting in cash for the long run.
https://www.investopedia.com/terms/h/hedge.asp
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, I encourage you to give us a call! You can reach us at 251-327-2124, or go to our website gulfcoastfa.com and click on the blue button in the upper right hand corner to set a 15 minute conversation, or, better yet, reach out to us to schedule an in-person conversation at any of our 3 offices in downtown Fairhope, Orange Beach or Mobile.
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.
Alright Josh a little over 2 months ago, we hosted a Coasting in Retirement episode titled “Slaying the Stock Market Boogeyman”. At the time of that episode, the Dow Jones Industrial Average was about 45,000, the S&P 500 was about 6000 and the Nasdaq Composite Index was pushing 20,000. Well, with this week’s stock sell-off, the Dow is down over 6000 points, the Nasdaq is off nearly 4000 points and the S&P is down over 700 points, or in other words, all the indexes are well within what is considered correction territory.
Our discussion during that episode centered around how the various stock market indexes had consistently gone up and to right during the past 50 plus years, so investors should not give into fear selling of certain financial products or services. So Josh do you still stand by your prediction that the S&P would close the end of 2025 at 6500 and what do you have to say about your recent stance that investors should not fear the stock market? Seems pretty scary to me right now.
Well, listeners, I hope you enjoyed a little peek into how we form our opinions and make predictions. We invite you one last time, if you would like to have a no-pressure, no-obligation conversation about your investing goals and retirement dreams, then give us a call at 251-327-2124 or visit our website gulfcoastfa.com. One our site 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. Plus you can always schedule an good old-fashioned in-person meeting at any of our 3 offices in downtown Fairhope, Orange Beach and Mobile!
Folks, that’s a wrap 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 and Jay Stubbs, thank you to our two awesome radio stations, FM Talk 106.5 out of Mobile and WHEP 92.5 FM & 1310 AM out of Foley, 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, 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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