June 17, 2022
Listen to Podcast Episode:
Right now, nothing is normal in the economy. Suze explains what’s happening with oil and energy stocks, real estate and Bitcoin, so you can keep your money safe and secure.
Suze: June 19th, 2022 June 19th Oh, today is a great day
Suze: because today is Father's day. So to all the fathers out there,
Suze: Suze, O here wishing all of you, one of the greatest days of your life.
Suze: Today is the day that we also honor Juneteenth
Suze: and what went on today years and years ago.
Suze: And so we honor that as well. And we honor one of KT's best friends, Annabelle, who lives in Puerto rico now,
Suze: It is her 75th birthday to day.
Suze: So it seems like today
Suze: is a really, really great day.
Suze: Welcome everybody to the Women and Money podcast
Suze: and all of you smart enough to listen.
Suze: I'm almost speechless
Suze: and I'm speechless because last week in the market in the investment world
Suze: a week that I don't think anybody
Suze: expected on any level.
Suze: What's so interesting right now about investing and trying to come up with the right answers and the right solutions and everything is nothing,
Suze: absolutely nothing is normal.
Suze: You can have a company
Suze: that makes a lot of money
Suze: and yet their stock still goes down.
Suze: You can have oil
Suze: itself going up.
Suze: But oil stocks going down,
Suze: You have a .75% raise
Suze: by the feds on Wednesday of last week,
Suze: Something they haven't done forever like in 40 years.
Suze: And even though everybody feels like that's normal,
Suze: it's not normal
Suze: and everything that is happening has a really serious ramification.
Suze: So we're in a situation where we have incredibly high inflation, 8.6%.
Suze: And what that means to all of you
Suze: is that you're paying more for essentially everything. Your dollar doesn't go as far. So your dollar
Suze: is actually shrinking in what it will buy for you
Suze: now that
Suze: no level is good for the economy.
Suze: The other person that it's not good for is the President of the United States.
Suze: Because the only thing that president Biden right now is being judged on is the economy.
Suze: And everybody, whether it's rightfully or wrongfully are blaming him for the fact that we have such high inflation for the fact that gas prices, oil prices are so high.
Suze: Now, I can go on and talk about how everything else is high, but everything is contingent on oil.
Suze: And right now it seems as if oil has a target on its back.
Suze: And the reason that is, is that this administration again, rightfully or wrongfully, that's not the point here
Suze: wants the price of gasoline to calm down.
Suze: If the price of oil, henceforth gasoline, what you are paying at the pump comes down, inflation starts to come down
Suze: because if oil comes down,
Suze: it's not as expensive to ship if you're shipping food and things like that in trucks, it's not as expensive to make certain types of things, Maybe plastic, things like that. And so eventually the price of food will come down somewhat as well.
Suze: There are other problems with food and food shortages, but that's not what they're thinking about right now right now, they are concentrated on oil.
Suze: oil companies so much so that they're inviting all of the energy companies to come and see them?
Suze: They need to talk to them
Suze: because they need oil to come down.
Suze: so now what do all of you do
Suze: if you're invested in oil companies, energy companies, natural gas companies, what do you do? Because now you are seeing some significant losses
Suze: from the top of where many of these E. T. S. And stocks happened to be
Suze: X. L. E down considerably. Chevron down considerably.
Suze: Pioneer down considerably.
Suze: Devin down considerably. Diamondback down considerably and on and on.
Suze: So what should you do?
Suze: This is where it becomes very difficult for somebody like me
Suze: because I like oil still
Suze: I get that it has a target on its back
Suze: but I'm still trying to be
Suze: common sense here
Suze: and going, we still have a supply shortage, we still have more demand China still is essentially locked up. What happens when they come out and they start to travel again and drive again there just isn't enough oil.
Suze: So is oil going down right now because everybody wants it to go down?
Suze: Is it possible oil is also going down because it is the only thing
Suze: That went up at all. I mean even though some of these companies are down right now considerably, they're still up like 30, on the year.
Suze: They're also paying an incredibly high dividend and the lower they go, if you happen to buy again, the higher that dividend really is to you because you didn't pay as much to buy it.
Suze: But is it possible
Suze: that many people who have significant gains in oil here, the energy stocks, are they also just saying I am out of anything and everything?
Suze: I've had it, I still made money, I'm still up, I'm selling.
Suze: So is it possible that oil and oil companies were so affected
Suze: Because of those two things?
Suze: Maybe? Yes, maybe, no, I'm not exactly sure and I don't know, but I have an inkling that that's what happened with them. So again, what do you do?
Suze: And I was saying that's why it makes it so hard for somebody like me because I don't know where did you buy in? How much of a profit do you have?
Suze: You know, what is your situation, have you held it for at least a year
Suze: because if you only bought it a little while ago and you don't have a year as to where you have held it if you sell it now it is gain, you're going to pay ordinary income tax on it.
Suze: So are you better off holding it
Suze: anyway then
Suze: or have you held it for a year or longer and now you would only pay capital gains tax?
Suze: Maybe it makes sense in your particular situation to sell, Maybe you need money, maybe this is in your retirement account, maybe, I don't know all of your individual situations.
Suze: So all I can do is tell you what I think,
Suze: that does not mean that it's right
Suze: and that does not mean that it is meant for you
Suze: in your situation.
Suze: But the way that I have looked
Suze: at all the things that I have recommended to you
Suze: is I have said to you over and over again,
Suze: the way that you invest
Suze: is by dollar cost averaging. You do not
Suze: just buy something and that's it.
Suze: That is not how you do it. Even if all you have to invest is $50 period, you're not going to have more than $50 to invest.
Suze: Then can you just take $5 every month and then buy slices
Suze: And buy what you want to buy over a period of time, but don't put that $50 in all at one lump sum. Did I not tell you that? I most certainly have.
Suze: So therefore,
Suze: if you're in a situation
Suze: where you have been dollar cost averaging
Suze: and you started to dollar cost average maybe
Suze: a month or two ago
Suze: and now a lot of these oil companies that you have bought
Suze: are down considerably, okay
Suze: here you are, maybe a month later. Now on days like this or whatever it may be
Suze: by an equal amount.
Suze: Again, you dollar cost average and hopefully you're dollar cost averaging down
Suze: where things are getting cheaper
Suze: rather than dollar cost averaging up where you bought in and now the markets are going up and every time you buy it gets more expensive
Suze: in markets like that, you probably want to do lump sums but that is not the type of market we are in.
Suze: So this is
Suze: just something I want to say to all of you
Suze: because I know you're confused what to do.
Suze: X. L. E.
Suze: Is an E. T. F. That is like a basket of energy companies
Suze: and we started to talk or I started to talk about X. L. E. Over two years ago and many of you got in, most of you got in when it was about $35 a share
Suze: and now
Suze: You know it's in the mid 70's
Suze: So you have a tremendous gain because after we started to buy it at 35 it went down and down into the twenties and it turned around so
Suze: you're doing fabulous, you're going to have to decide
Suze: what do you want to do
Suze: Once it broke 77, it broke a major support level for itself
Suze: and all of you know if you listen to the podcast,
Suze: what a support level is,
Suze: it's the support of a stock and when a stock normally hits that level, it usually bounces off of it and goes higher if it goes through it.
Suze: So XLE went through its $77 support level
Suze: that means it's breaking down,
Suze: is it possible that will go back up again. Is it probable. Uh huh
Suze: But you may just want to say you know what I am happy with what I have, I'm not quite understanding what's happening in these markets and why it's doing what it's doing and maybe you sell, maybe you sell half
Suze: or maybe you say to yourself,
Suze: you know what Suze, I don't actually care whether it goes up or down or whatever. I love the dividends it's paying me, I believe in it. I think oil is going to go back up, maybe I'm gonna keep it.
Suze: So that's what you may be thinking if you happen to buy it
Suze: When it was in the high 80s or high or low 90s just a little bit ago
Suze: or you bought anything else when it was a whole lot higher now, maybe 10 15% even higher than where it is right now,
Suze: you would be dollar cost averaging
Suze: and if you have time on your side, you have years or whatever,
Suze: I have to say, I would watch it here and see what happens and I would continue to dollar cost average into it.
Suze: I am waiting once again
Suze: to buy more of certain energy companies because I do think they possibly could go lower here
Suze: because there is a target on their back
Suze: but I still love the dividends and the variable dividends that they are paying.
Suze: I mean if you know some of these companies continue down Pioneer and whatever and you buy them
Suze: Pretty soon their dividend and everything will be almost 20% to you possibly.
Suze: So it just depends how you want to view, how you're going to make money. Do you make it on growth or do you make it on dividends? Do you do things like that?
Suze: So that's how I feel about oil right now Again, I still think
Suze: that we don't have enough supply to meet the demand,
Suze: but let's just see what strings somebody is pulling
Suze: and that will dictate a lot
Suze: in terms of real estate,
Suze: real estate kind of has a target on its back to
Suze: because you heard
Suze: If you listen to it, Jerome Powell after he raised interest rates .7, for the Feds.
Suze: Now I'm summarizing what I heard him say, we need to get control over mortgage interest rate in terms of making it so that houses go down again.
Suze: So that millennials have a chance to enter the market.
Suze: So you could tell that he is very, very serious
Suze: right now about cutting down inflation
Suze: about bringing up the unemployment rate
Suze: making it really, really so that all of us stop spending money.
Suze: So inflation comes down.
Suze: So what does that do for real estate?
Suze: Well on one level, it's shot
Suze: The 30 year mortgage at one point up to over 6%,,
Suze: which I did not think we were going to see, I thought for sure it was going to remain around 5 - 5.5%
Suze: but obviously
Suze: they don't think that's quite high enough,
Suze: they think that all of you are going to continue to buy homes or real estate no matter what.
Suze: it can go up to 6 - 6.5%
Suze: which benefits who? It benefits the financial institutions because they are the ones, the banks, the mortgage companies, they're the ones who are making the difference in what it cost them to borrow money
Suze: versus what they lend it to you at. They're going to be making a whole lot of money.
Suze: But then that becomes very confusing as well because why aren't the bank stocks going up?
Suze: So do you understand what I'm trying to say, nothing is normal. Everything kind of feels like it's being manipulated on some level to get the results of inflation coming down.
Suze: what's going to happen with real estate?
Suze: I think you're seeing a lot of the real estate companies that are out there are the builders, their stocks are at the lowest, they've been in a while,
Suze: you're seeing
Suze: orders slow down
Suze: and you're seeing applications slow down.
Suze: However, I still don't think you're going to see a tremendous decrease at all. This is not like
Suze: it was years ago where you bought a home for 700,000 and it went down to 170 I think if you bought a home for 700,000 in the past month, or so.
Suze: It's going to stay at 700,000 for the next year or so, maybe it'll go up 5%.
Suze: But as I've said in past podcast, I do not think it's going to continue to go up, 35%
Suze: for those of you that are selling your homes. Real estate agents will tell you
Suze: they don't have multiple buyers anymore in many areas. There are places where real estate agents have put the house on the market and one month later
Suze: they still don't have any offers. And they have said if we had put the house on the market in April of this year, we would have had multiple over asking price offers.
Suze: So sellers keep that in mind now
Suze: buyers, it's starting to turn just a little bit where you do not have to go and say I have to do something to buy a house if I just don't give in and do anything and everything that's needed, I'll never be able to buy a home
Suze: if you can afford it, you have a little bit more. I think negotiating power at this time
Suze: I get that interest rates are at 5.5, 6% to buy a home.
Suze: You know, I remember when I bought my first house
Suze: In the mid 70s, somewhere in the 70s, I don't even remember the year anymore,
Suze: but it was in California
Suze: and I had gone out to California in 1973 in a Ford Econoline van that my brother lent me $1500 to buy. And my girlfriend and I and two other friends in 1973 headed out
Suze: to find our fortunes and ended up in Berkeley California
Suze: and I started to get interested in real estate
Suze: At that age, believe it or not, 22 or 23 simply because my girlfriend's brother
Suze: had just bought a home
Suze: And his mortgage payment was $150 and our rent payment was $220 and I went, what is wrong with this?
Suze: So somehow I ended up somewhere in the 70s there,
Suze: learning how to buy a home with no money down, taking the Lowry Nickerson's seminars,
Suze: But at that time interest rates were like at 15 and 16% for that mortgage,
Suze: but because real estate was so inexpensive still at that time,
Suze: You know the house was only $48,000,
Suze: It was like, and when I say only that's up from $17,000 a few years earlier because real estate started to go back then
Suze: in Berkeley California.
Suze: I was still able to afford it big time because it was still less than our rent payment and we took in other people that lived with us and it was fabulous
Suze: And I ended up selling that home I believe for 4, 600,000, something like that.
Suze: the point of why I'm telling you all this
Suze: is that don't let higher interest rates scare you.
Suze: If what you want to do is buy a piece of real estate right now
Suze: And you know, you can afford it. You know, your job is stable, you'll have 20% to put down besides a one-year emergency fund, you're fully funding your retirement accounts, you're out of debt.
Suze: Okay. Go for it,
Suze: go for it
Suze: because interest rates most likely will calm down again
Suze: and you can refinance
Suze: or even if you don't, it's okay,
Suze: We have to stop thinking, Oh my God, 456%, that is so high.
Suze: When years ago 6% was kind of the norm and it was like that's a great interest rate or a home.
Suze: Remember it's also tax deductible.
Suze: real estate I think you're essentially still okay in in terms of the value
Suze: for those of you who bought it a long time ago,
Suze: You're doing pretty great over these past year two or 3.
Suze: It's what do you do now?
Suze: So now if you're a buyer, think about what I just said a few seconds ago
Suze: and if you can get yourself a deal and you feel good about it, why not?
Suze: And if you're a seller, maybe you shouldn't be quite as picky
Suze: I've said many times as well that if Bitcoin broke its support of 27,200, you would see it at 23,000 or 22,000 totally possible that it could actually trade down to eighteen and a half thousand.
Suze: If it breaks this $20,000 support level again we'll see where it will go.
Suze: Bitcoin once again
Suze: dollar cost average into it. I said with only money you can afford to lose.
Suze: What's scaring me right now about Bitcoin
Suze: is that I have many people who have told me that their friends are taking out large sums of money even from places that were supposed to be secured to do other things with to do what buy bit coin.
Suze: Be very, very careful here. Who knows? Will it go up? Will it go down? I'm still holding on, I still like Ethereum, I'm still doing it for the long run. I am not putting any more money into it. I put a seriously small money into it for somebody like me
Suze: and we'll just see what happens.
Suze: So again be careful with that
Suze: because Bitcoin
Suze: proved not to be an inflation hedge which everybody thought it was going to be.
Suze: That was one of the reasons by the way in my opinion that gold really wasn't able to do anything
Suze: because everybody went who cares about gold, we can do Bitcoin, we can make a whole lot more money. And Bitcoin
Suze: is an inflation hedge. Well that didn't prove out to be true which is why I think it's possible that gold here could go again but you have to be careful because it's very possible even probable that at this point it could go down a little bit more
Suze: before maybe it turns around and goes back up.
Suze: this is called being diversified.
Suze: You have a little bit of this, a little bit of that. You have the majority of your money growing. Hopefully tax free and retirement accounts deferred accounts, whatever it may be. You have your emergency funds in something like Alliant credit union and there you go. Speaking about Alliant credit union,
Suze: they are the sponsor of this podcast
Suze: and I couldn't be more proud if I tried for them to be the sponsor of this podcast.
Suze: Currently they are paying you 1% on the ultimate opportunity savings account every one of you. If you have not yet opened one up,
Suze: you should go to my alliant dot com
Suze: and look for me,
Suze: there's a reason why I'm telling you, I want all of you to be doing this right now.
Suze: Can you just do it, put in $100 a month and you do that every single month for 12 consecutive months. They're going to give you $100 plus you made at least 1% on your money because if anything they're going to be raising that 1%.
Suze: So listen to the end of this podcast for the full disclosure of how the ultimate opportunity savings account works.
Suze: Yes. Yes. Yes. And speaking of Alliant
Suze: June 30th mark your calendars at two p.m. East Coast time or adjust that for wherever you are and I'm going to be doing a webinar with Alliant.
Suze: So tune on in and the way you do that is simply you can register for free at my alliant dot com slash webinar.
Suze: So come on and don't forget to be with me then.
Suze: See now I got off track there. I was talking to you about putting safe money here whatever. I don't remember what I was talking about.
Suze: See how it is when you get
Suze: into things
Suze: whatever. Alright. But regardless of what I was saying there
Suze: is that
Suze: it's just diversified. You want to be diversified.
Suze: I want to talk for a second about financial advisors
Suze: because a lot of you are writing me really upset with your financial advisor.
Suze: How could they have lost you so much money?
Suze: No Financial advisor lost you money.
Suze: You and you alone
Suze: decided to keep your money in the investments they were in, you did not instruct your advisor to sell or the money would be out
Suze: of the markets
Suze: you have nobody to blame really but yourself and I never want any of you to think that you are victim to your circumstances
Suze: because there's always something we can do.
Suze: So advisers,
Suze: as I mentioned a little bit ago as well in a podcast a day or two ago or actually on Thursday is that nothing is normal. This is where I started today in terms of what's happening
Suze: in the economy. Nothing is making sense.
Suze: So you can't blame your advisers
Suze: because hopefully they are doing the best they can do. But there is no place to run. There is no place to hide. There is no place
Suze: to have been able to say. Yeah, let's get out, let's pay taxes. Yeah, it's going to go down this far. Nobody knew that
Suze: so it couldn't go down further. Oh you bet
Suze: You bet it can absolutely go down another 10 or 20% easily.
Suze: You're the ones who are going to have to decide though what to do.
Suze: So again,
Suze: here's what I want to say about advisers. If you're unhappy with your advisor,
Suze: what I want you to do is look at a normal standard and Poor's 500 index fund or the total Vanguard stock Market index fund and they're down about 20 or 22% from their high and that's pretty diversified.
Suze: Those are investments that are diversified.
Suze: If you're down more
Suze: than 20 or 22% in your portfolio
Suze: when you told your advisors that you needed growth, you needed to be conservative, whatever it may be. So you did not instruct them to go for it, risk the money, you didn't care.
Suze: But if you just told them what you needed
Suze: and you wanted to be safe and sound
Suze: And you have lost more than 22% in your portfolios
Suze: then you don't have an advisor that
Suze: really maybe heard what you wanted to do or is taking too much risk with you or
Suze: doesn't have you diversified enough.
Suze: So that may be an indication of an advisor that you should be upset with.
Suze: None of you should be down 40 or 50% across the board in your portfolios. None of you.
Suze: Mostly you should be down 15%,,
Suze: maybe 20%
Suze: But 15, 17%. Okay.
Suze: Right now, believe it or not, that's kind of normal
Suze: and that can be made up.
Suze: But if you're in a portfolio
Suze: Where you are down 50, 60, 80%, you're not diversified.
Suze: And if you have a financial advisor that allowed you to do that,
Suze: I would think twice about that Advisor.
Suze: So that's just something I wanted to say to you. Also one more thing before I go is that unless thursday's podcast, I made a comment
Suze: about a woman who had money in a 5 29 plan. KT obviously fell in love with this woman via the email and was like, Suze, you're so harsh, blah, blah blah. I feel bad for her because essentially what I was saying, you need to take your money out of a 5 29 plan within a year or two
Suze: before your kid goes to school.
Suze: I did not mean to infer that you take it out of the 529 plan into your own hands.
Suze: I needed to be clearer where I said you absolutely take it out of the stock market within the 529 plan.
Suze: And you put it somewhere that's safe within the 529 plan. And then you withdraw it in the year that your kid is going to school and it goes directly to qualified expenses from the 529 plan.
Suze: I hope that clears that up.
Suze: I don't know did today's podcast help you?
Suze: I just kind of rambled that off.
Suze: It actually wasn't what I was planning to do
Suze: but I did it.
Suze: So I hope it helped on some level. The best thing I could tell all of you is don't panic.
Suze: These things happen.
Suze: If you have time on your side
Suze: you're in good quality exchange traded funds or mutual funds. You are diversified.
Suze: I'm telling you
Suze: another year or so
Suze: you may be thinking why didn't I buy that?
Suze: Why didn't I buy Ford at $11 a share. Why didn't I buy en video? Why didn't I buy certain stocks? You might be thinking that in a few years from now after this market goes down maybe to 3500 on the S. And P. 3200 on the S. And P.
Suze: And if you don't know what that means,
Suze: Look up the standard and poor's 500 index. Look at the number
Suze: because we have to start learning about support and resistance levels when it comes to certain numbers.
Suze: Like what the standard and poor's 500 index is trading at Alright until Thursday.
Suze: What what are you doing here?
KT: Hi everybody. Wait, let me put on my earphones,
KT: wait for me. Okay, I'm ready, Suze. Today's Father's Day.
Suze: Yes, I know, I told everybody that.
KT: We have to wish Coolo a very special father's day like our son, but he also is a daddy. He has three great kids, Christopher, Denisa and Darlie Junior.
KT: We have to wish,
KT: come on, Suze.
Suze: But oh wait, but Robert just popped in as well, see him on the screen here.
Robert: Hello, Suze and KT.
Suze: What are you doing Robert?
KT: We wish your dad Happy Father's Day as well.
Robert: Katie texted me and said that at this very early hour we're going to wish Colo a Happy Father's Day. And since I sort of feel like he's like a brother to me,
KT: that's so sweet robert, I love that
Suze: So in case all of you don't know who Colo is or somebody doesn't know. Colo is part of our family.
KT: He lives here on the island with us and we love him. But here's the great thing, Suze. It's Dather's Day and and it's his day off, it's sunday, so we have to secretly wish him
KT: happy Papa's Day.
Suze: So Robert, KT and me, what do we want to say?
Suze: (Suze, KT and Robert say): Happy
KT: Father's Day Colo ,
Suze: there you go. Alright everybody.
KT: So we wish all the fathers out there. A great, great Father's Day today, enjoy it. Have everyone wait on you sir.
Suze: Alright, sign off already. Alright sweetheart. So until Thursday, there's really only one thing that we really want for all of you
Suze: Robert. Do you know what that is?
Robert: We want you to be safe.
KT: Strong and secure.
Suze: See you soon. Bye bye
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