Transcript

Hello, and welcome to our market alert video for today, which is June 3, 2022. And we’re titling this video: “You gotta brace yourself.” And of course, we’re quoting Jamie Dimon, the CEO of J.P. Morgan. And we agree with him.

You know, we’ve been talking for several weeks now, and I’m glad that Mr. Dimon has finally come around to our way of thinking. That we are facing an economic hurricane, and that it is most likely a good idea to think about protecting yourself from what’s going on here. And so, you know, we also saw that Elon Musk said that he wants to reduce his labor force by 10%, which is 10,000 people. And the reason why he wants to do this is because he has a super bad feeling about the economy. We also had the CEO of Goldman Sachs come out this week and say that he has never seen such a confluence of bad events all happening at the same time, in his entire career.

And so, it’s looking more and more like we have a financial hurricane coming if we’re not already in it. Now, in our view, as we’ve been saying, for several weeks, we think we are in it. And we also think that it’s going to get worse. We’re already seeing $8 gas, $8 gas, wow, even we did not see that coming. We thought $6 gas was about where we would peak.

And what’s happening right now also is that the consumer is getting squeezed from a variety of different areas. One is the Federal Reserve is raising interest rates, which is making the cost of borrowing and buying stuff on credit more expensive. The other thing that’s happened is that properties’ values have skyrocketed. Well, that may seem like a good thing. But what it has done also is it has made the property values, which means property taxes higher, too. So, the consumer is now facing higher property taxes, which takes money out of their pocket that they could be spending.

We also have the situation, as I said, with regard to energy prices, food prices have skyrocketed, so, we also have the consumers that have been spending money and living with the stimulus dollars that they’ve gotten. Those stimulus dollars are starting to run out. But that lifestyle that they’ve enjoyed, they want to continue. And so, consumer debt is rising at an amazing rate, the highest rate we’ve seen in many, many years. So, all of those don’t bode well for the future, because our consumers are 70% of our economy, and if they can’t spend or they are getting rid of all non-discretionary spending, then that could build badly for the economy, corporate profits, and therefore, the stock market. So, we still think there’s a very high probability that we could get, and we could see the Dow at 25,000 from here.

My question to you is, are you still in this market? Are you going to just grin and bear it? And if it does go down that far, you know, can you recover from that? How long will it take? What would that do to your investments, your plans to retire? You know, our invest and protect strategy said to sell in November of 2007. And you know, for those who followed our advice, we avoided all the equity losses that happened in 2008 because we weren’t in the stock markets. And our strategy also said to sell on March 10, which was the day before the pandemic was officially announced. And you know, what happened after that? So, our strategy is not perfect. It tells us bear markets are coming that don’t, 2015 and 2018 are examples of that. But our view of it is it’s better safe than sorry.

So, if you’re over 50 right now, if you’re retired or retiring soon, I would strongly recommend that you visit with one of our retirement planners. Go to our website. It’s rpoa.com. Help us to help you build a retirement plan. Take only as much risk as is necessary to accomplish your financial goals. And as we always say growth is important, but protection of principle is even more important. So, thanks for watching this video and we’ll talk soon.