Podcast Episode - Suze School: Everything You Need To Know at the Close of Q1

Today’s Suze School is a special podcast only exclusive.  Suze turned down several TV appearances this past week and is only sharing her quarter-end perspective on what’s happening in the Stock Market, Bitcoin, real estate and more, just for you.

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Podcast Transcript:

March 24th, 2024. Well, that's kind of cool. 24-24. Anyway, March 24th 2024. Welcome everybody to the women and Money podcast as well as everybody smart enough to listen, Suze O here. And I can tell you, I really, really feel like I'm finally, since we went to Abu Dhabi back in my body. It takes a while when you go so far in such a short period of time and you go bam, bam, your body feels like it's been shot out of a cannon and I've landed again. But I have to tell you,

I can't remember when our phone has rung off the hook as many times as it has this week. Seriously, three or four times a day with major television stations wanting me to come on and explain to everybody what's happening in the economy, what's happening with the new real estate commissions? What's happening? What's this? What's that? KT and I were just looking at each other. And we were like, what is going on? Truthfully at the height of my career, we did not have as many requests as we had this week. We must have had seriously at least 15 or 23 or four a day. And when we said no, we couldn't do it that day. The very next day they all called back again. Can you do it tonight? We'll send a truck there and we're like, no, you don't understand.

We're on a private little island. You can't send a satellite truck here. There's no way to get it here, but it's really was something. So I thought, well, and by the way, I said no to everybody because it just, the weather's been horrible here. It wouldn't have been a good live broadcast. But I thought to myself, well, even though I said no to everybody, I can always say yes to the people on this podcast. And that maybe this is the time since we're about to end the first quarter of 2024 we should kind of recap what is happening out there that affects us. What's going on with the stock market? What's going on with Bitcoin? Where should we be investing or whatever? So, here's what I want to tell you.

Let's go back for a second to the end of December last year. By the way, you might want to get out your Suze notebooks. Why not?

Yeah. Are you doing that. Ok. All right. Let's go back to the end of December last year and it was in December when the Feds came on television at their meetings and they announced to everybody that there were going to be three rate cuts, interest rate cuts in 2024.

And everybody loved that. They were like, yes, finally, interest rates are gonna come down and if interest rates are coming down, that means inflation obviously is coming down. So things aren't going to cost us as much as they're costing us right now. The interest rates to buy a home and on our credit cards and everything will be coming down. And it made everybody so happy, especially when you compare that to the years, 2022 and 2023 when the Feds raised rates higher and faster than ever in the economy's history.

So there was a rocket of interest rates going up in 2022. And now we were hoping because the Feds told us so that that rocket of high interest rates was going to start falling back down to earth and that there would be three rate cuts in 2024.

And if you look at the stock market ever since then, everybody got excited and the stock market really started to go up and up. Now, why is it when the feds lower the interest rates or they say they're going to lower the interest rates. Does that make the stock market go up?

And the reason is very simple right now, there are trillions of dollars that are sitting in money market accounts, bank accounts and accounts at credit unions making a great interest rate 5% in the high 4%. So money doesn't have to be invested in the stock market right now. People feel very comfortable investing in certificates of deposits, all kinds of things that are giving them a safe guaranteed 5 - 5.4% interest rate, 5.3 whatever it may be. And people feel safe there

When interest rates start to come down or they're projected to come down and all of a sudden interest rates in a money market account or a CD when they renew might go from 5.4% down to 5% down to 3%. They go down.

Now they're not going down very quickly yet. I don't know if they'll ever go down quickly to tell you the truth at this point. However, people feel when interest rates start to go down, that safe money getting 5% in money markets and savings accounts and so forth will come out of those safe investments and go into the stock market into stocks that are paying higher dividend yields than you can get in a money market account or whatever it may be.

So, when the Feds said that interest rates were going to come down at least three times they were going to lower in 2024 the stock market started to go up and up. However, since December,

it seems inflation hasn't been that easy to truly tame.

Yes, the consumer inflation rate is around 3% but the feds want it to go down even more. But overall, it hasn't been moving as fast as they thought it would be moving in the first quarter of this year. And have you noticed just a little bit ago that the market that has been skyrocketing doing great started to stall out.

It kind of stopped and it stopped because everybody was waiting to see what was Jay Powell, the chairman of the Feds, what was he going to say last Wednesday in terms of interest rates?

Because people started to get afraid that they were not going to lower interest rates this year. In fact, maybe it was possible that they might even raise it one more time. So everybody started to get afraid and they were waiting to invest until Jay Powell gave the word on Wednesday.

And what happened was that he did give the word on Wednesday and he said, yes, we are still projecting that we will have three rate decreases in 2024.

And when he said that it gave hope again to the people of, oh, we're still going to have them. And what happened that day? The market skyrocketed skyrocketed to the highest really, it's ever been, it just totally took off. Now, I just want you to think about this for a second.

Think about how high it went just on the fact that Jay Powell said that there would be three rate cuts this year.

I can't imagine what might happen when they actually do start to lower interest rates because when that usually happens then the market has another blast off. Well, at this time or not. I don't know, but that's usually what happens. So all of you who are afraid, you think? Oh, we're in a bubble. Everything is too high. It can't go any higher. Oh, yes, it can.

And it probably will. We're at a time right now where the economy seems like it's strong. People aren't afraid anymore that there is going to be a recession. Who knows? But it seems like they got through it somehow

the unemployment rate is still low. Everything seems at least in the economy seems to be doing great. Now, whether you're doing great financially speaking is a whole nother thing because the economy is one thing. But your personal finances are a whole other thing.

And that's why I've always said to you, you cannot count on the economy, you cannot count on the government to solve all these problems. They can't even seem to solve their own problems financially speaking. So therefore it's all on you, but don't be afraid to continue to dollar cost average into these markets and continue to invest to not stop at this point in time. Now, a lot of you have been saying to me, but Suze, this market is being driven by the magnificent seven, although that's not what's driving it right now by the way, but by the magnificent seven and these artificial intelligence stocks, these AI stocks and it's going to be exactly like it was in the late nineties with the internet bubble and where everything crashed.

If people are saying that to you and you're getting afraid thinking that AI I s going too high. And it's just like in the late nineties when the internet bubble did crash, it is not like the internet bubble at all.

The internet bubble was all about the internet. All of the stocks having to do with the internet.

Artificial intelligence is invested across the board. It's not just artificial intelligence, it's how are healthcare stocks using artificial intelligence, engineering stocks, oil stocks, all the stocks out there are now getting involved with artificial intelligence. So it is not just the internet, it's almost every single industry out there. Automotive, you name it, they are getting involved with artificial intelligence. So the stocks that are actually going up and really driving a lot of the increase are the stocks that are making the little widgets, the little discs, the little data, whatever it is that they make for all of these different companies.

So we are not in my opinion in artificial intelligence bubble, on any level, artificial intelligence, everybody is here to stay.

So don't be afraid of it. If anything, it will make all the companies in all the sectors probably become more productive and more profitable. And that is the entire stock market on many different levels. So again, do not feel like this is a bubble. I kind of think on some level, it's just gotten started, believe it or not.

Let's talk for a second about Bitcoin because so many of you are writing me, Bitcoin has had a dramatic change. It's had a dramatic change because years ago, the only way to buy it were from these companies where you had a wallet and you kept it in there and it was so complicated and then came some companies that actually bought it for you and they went belly up and Bitcoin kind of plummeted and it was like, is Bitcoin over again because Bitcoin has had as, you know, its ups and its downs a few years ago, it went as high as I think 67,000 a Bitcoin. Then it went all the way down to 17,000 a Bitcoin.

So Bitcoin really out of all the coins out there is the one that's currently the most stable. And why is that at this point in time? And that is because finally they have figured out how to have exchange traded funds that own the actual Bitcoin. And that you can buy in to those exchange traded funds. And as soon as that happened, then it seemed like Bitcoin was starting to be more and more legitimized as an actual investment, believe it or not. And then we saw Bitcoin go all the way from $17,000 a Bitcoin up to the 70,000 area of Bitcoin. Now down to the 60 some odd thousand area of Bitcoin, but Bitcoin is more solid than it has been in a long, long time.

Also, what you're going to be having in the month of April is an event called Halving, Halving where the miners that mine Bitcoins, they discover it, what they get paid out there to discover it is Bitcoins, but they'll only be awarded half the number of Bitcoins than they used to be awarded.

Remember, there are only 21 million Bitcoins out there. They are not like our currency, our paper currency that we can print as much as we want with Bitcoin. There is a limited amount, there are about 18 million out there right now. So there's only about 3 million left and that makes it very interesting.

So the halving event that is coming up in April, which is something that usually gets Bitcoin to skyrocket in value plus all the exchange traded funds that are out there, legitimizing Bitcoin and the big name, corporations and banks liking Bitcoin. That's why you see Bitcoin doing what it is doing and it's actually projected to very easily, somehow go up to about 80,000 at Bitcoin, if not higher. Will it do that? I have absolutely no idea.

Now, in the past, I have always said to you do not invest in Bitcoin unless you know that it's money that you can afford to lose.

I'm coming off of that just a little bit because now you can invest in an ETF, I think personally one of the most solid ETFs if you're going to invest in Bitcoin is the one that was brought out by Blackrock, symbol is IB- like in Bitcoin. So, IBIT, I BIT That ETF to me is a legitimate one, a solid one and one of the most largest ones out there, they own a whole lot of Bitcoins just so, you know, if you want to get your feet wet and you want to see what happens there. All right, I don't have a problem with you buying some IBIT ETF however, still know that anything can happen at any time. So don't go crazy with it.

If you decide to do it, there is still a lot of controversy about Bitcoin and all of those things, but at least they've given you now a more legitimate way to actually buy it as you know, a few months ago. In fact, I think it was last year around December 21st to be exact.

I was giving you different ways that you could buy Bitcoin because if you remember in the past, the way that I purchased Bitcoin wasn't buying the Bitcoin itself. It was buying the stocks that are buying Bitcoins and the one stock that I bought a lot of way back when was micro strategy.

And that is one of the stocks that if you were to buy follows Bitcoin up and down. I am no longer in it. I made my money in it and then I got out and then I also gave you the name of another miner, a company that mines Bitcoins and that was MARA was the symbol and that went up nicely since last year. It has stalled out here now, just so, you know, maybe it will continue up. But I am also totally out of it. I don't really like to recommend stocks that I have something to gain if I tell you about them.

However, I still think that there's a good possibility that might work, but it's just stalled out a little bit. So I would be careful if I were you.

That's my little thing on Bitcoin. There are obviously some other companies that are fabulous that you might want to look into, but I'm a little hesitant to name one of them because I own a big position in it. So again, I'm so sorry, I just feel like I can't. But what this is saying to you is that I have a little bit of confidence that Bitcoin is going to go up even from here, but don't go crazy if you do it and again, do it with money that you really can afford to lose if something goes wrong.

A lot of you have asked me about what should you be doing with PXD, Pioneer Natural Resources. It was a stock that is being bought out by Exxon for $253 a share. It's right around there at this point in time and sometimes shortly here probably in the next quarter, Exxon will buy it out back in December of last year.

If you hadn't sold it when I told you to sell it, which was around 235 - 240. What I wanted you to do with the money was I wanted you to go into another oil stock by the name of Diamondback or symbol was FANG.

FANG is absolutely one of my favorite energy stocks. So if you have a long term gain already in PXD, you don't love Exxon and now you just want to do something you might want to sell PXD. And I still like FANG - FANG here. The dividend is about the same as PXD. It's in the 4% area.

All right, that's what I want to tell you about that last but not least a lot of you are asking me, Suze, is it time to start investing overseas in international stocks? What do you think about that? You mention it a little bit in the ultimate retirement guide, your book that you wrote a few years ago. What do you think about that?

I do think it's time the FTSE 100 which is kind of like our Standard and Poor's 500 index. But in the United Kingdom, I think that's going to start to go just so, you know, I also think India is going to start to go - symbol for the ETF for India, by the way, is INDA.

So those are two things that you might want to think about there in the United States. However, here, have you not heard me say recently that I like small cap stocks? I think the small cap stocks are absolutely going to start to go. And the symbol for the one of the ETFs the Russell 2000 is IWM.

So if you want to add that somewhere in your portfolio a little bit of that fine. Now, remember these are all things that you should be doing on a dollar cost averaging basis where you decide how much you want to put in that area and then you divide it up over time and maybe you buy some. Now if it pulls back, you buy a little bit more, if it goes back up. Ok, maybe it'll pull back again. I don't think you're gonna see everything go straight up. So everything seems to be having a pullback, use the pullbacks to invest more if you have a certain amount of money that you want in these things.

This is kind of what's happening in the markets and the economy. As far as real estate goes, I still think that you're going to see real estate do relatively ok. Is it going to be skyrocketing like it was? No, I think it will come back to possibly a normal appreciation rate of about 5%. We'll see what happens with the real estate commissions if they vote that in or not.

But I personally think that real estate commission should absolutely come down because of how high prices have gone on real estate. So it's, you're paying more, the real estate agent is getting more. I think it won't kill the real estate agents to have lesser commissions. Let me just briefly talk about here treasuries

As you know, I wanted all of you because I thought interest rates were going to start to come down faster than they had. I wanted all of you to start looking into 20 - 30 year treasuries not to hold for 20 or 30 years, but to hold them for when interest rates do start to come down, the value of long term bonds go up higher than shorter term bonds.

I think that the 10 year bond is relatively where it's going to be. I don't think it's going to go a lot higher from here, the 20 - 30 year bonds even though they have not come down in interest rates. I still think they eventually will. I don't know exactly when that will be anymore by any means. But, so what, you're still making 4, 4.5 or even more, depending when you bought it, you, you're making a good interest rate there and when interest rates do start to come down, that's when you'll be able to see those bonds appreciate. So, just hold them and don't freak out about it.

So how is that for a wrap up of what all the TV stations have been wanting me to talk about?

But I chose to talk to all of you about it. I hope that puts everything in perspective for you. So now I know I said that KT and Colo would be on today and we would do a can I afford a quizzy, but I'm gonna save that for Thursday because really, I thought what I had to say in this Suze School was what all of you needed to hear. So until next Thursday, there's only one thing that I want you to remember when it comes to your money and it is this people first, then money, then things now you stay safe and you stay unstoppable.