The recession hasn't happened. And the fear that I have is that we could still have a recession around the corner. We had an inverted yield curve for a couple of years. It's uninverted. And when you look at the history of recessions, I don't want the numbers in front of me. But many of the recessions happened after the yield curve, uninverted. And my fear is that a lot of people think that the stock market is a safe haven. And a lot of people might think that we're not going into recession. And that could be a big mistake because we're not recession-proof and it still could be around the corner. You're listening to Carrie Lutz's Financial Survival Network where you get valuable information you just can't find anywhere else. To thrive in today's trying times, you need the Financial Survival Network now more than ever. Go to financialsurvivalnetwork.com and get your free newsletter and gift Financial Survival Network now more than ever. Survival Network, I'm your who's Carrie Lutz. As we get into the last week of October of 2024, what is going on? We all know elections about to take place for better or for worse. There's always one sure loser in every election since I've been alive. And that is the American public. So I don't see anything that's going to make this any different that all the others, the debt keeps piling up, the economic challenges somehow. Anthony Carras with us, Anthony, I see bad things happening to the country. We don't need to get into them. But yet, like these big companies, I think they said 10 large companies are born every decade in America, something like that. Did you see that statistic? So we have Tesla, Nvidia, we have all these large companies that really literally came out of nowhere. So in spite of things being bad, these companies keep, keep cropping up here. What's your take on it? Yeah, like I did see that and I've read other studies. And by the way, Carrie, thank you for having me back. Happy Halloween to all of you listening, all the weeds right around the corner. You know, the thing that is interesting about this is Apple is a great example of a company that a lot of times people will hang their hat on. We recently had a client that we took on that invested $10,000 of Apple. I want to say it was like 92 or something like that. And he wound up cashing out at $1.8 million when we took them on. This was a couple years ago. And that's the way that the math work. And so what I find happening is I find that a lot of people will hang their hat on a particular company. And instead of writing a diversified portfolio of stock to success, they'll hang it on one company. Now, we have to remember that for every apple that's out there, there were probably 10,000 wannabe apples that you'll fail at the same time that Apple succeeded. And what scares me and I see this is starting to be a trend is that a lot of people will pick a company Apple back in the day and video now for their chips and the AI craze that's going on. And almost looking for that one company to really ride them all the way to success. And I think that's a very dangerous approach. If you take a look at companies in general, they all cycle. Companies that are on the perch today may not have existed 25 and 30 years ago think Google and Amazon. And companies that are out of business today were the top companies 75 years ago think Woolworths, think Sears, and so on. And if you look at the Dow 30, for example, the 30 biggest companies in the world, the reality is if you go back 80 years and you take a look at the companies that were in the Dow 30 30 biggest companies 80 years ago and you compare that to today, most of your listeners probably would be surprised to find out that there are exactly zero companies in there today that were in there 80 years ago. The last holdout was GE and GE got booted from the Dow, what three or four years ago. And so, you know, sometimes people will say, well, I'll just invest in those companies and I'll just ride that for the rest of my life. No, if you've done that 80 years ago, you would be out of luck today. And so none of the 30 top companies that 80 years ago are in the top 30 today, but it gets worse. And that is that other than GE, the other 29 companies that were the top companies in the world 80 years ago are all out of business. They weren't able to change and adapt. And we are in such a changing and adapting that top companies today are not going to be top companies in the future. And you need to have a diversified portfolio of a lot of good companies, not one, but I do see a trend of people taking a lot of money and putting it into one stock that they hope is going to win. Tesla, Netflix and video. And that's a dangerous trend to do. Yes, you should have some in your portfolio, but don't base your entire future on one stock. And I see a lot of people wanting to do that. Interesting, interesting analysis there. And yeah, like the companies have their 20, 30 year run at things, right? And then maybe some of them go 40, 50, like GM forward. And then they, then they fall, right? Exactly. Right. You know, the time the faster times change, the more companies are going to fall. Think blockbuster, right? That Netflix came along and realized that why do we have to go to a store? Why do we have to rent a tape? Why do we only have seven days? And when you look at blockbuster and you've studied the history of blockbuster, what you realize is that a part of their business plan and a part of their revenue, a part of what made them good and profitable was the fact that they charge late fees on the people that didn't bring back these videos in time. Now call me crazy, but, but setting up a business and running a business to where your profitability is going to depend on penalizing the customers for not doing that. That's a recipe for failure. And then when Netflix came out and said, no, we're going to produce these things that we're going to deliver it to you right in your home. And you don't have to go to blockbuster. Blockbuster could have been Netflix if they had pivoted, but they didn't. Same thing with Kodak. Kodak could have been in the digital space when it comes to film, but they, they didn't. So at the faster things change, the companies are going to drop off. And with AI and with the things that are going on today, you're 100% right. You have to really be careful. Companies that are on top today may not be anywhere to be seen in a decade. You know, interesting. You mentioned blockbuster because that was founded by Wayne Yuzenga. And he was the only person to ever found a three S&P 500 companies, Waste Management, Auto Nation. So Blockbuster's gone. He was long out of it. He saw the handwriting on the wall. And then we had Auto Nation that's still going pretty good in waste management. The last I heard people were still producing garbage at record rates, right? I heard the judge and still recycling. You know, it's, it's kind of crazy when you think about it. So let's talk about Federal Reserve. Regardless who wins, we still got to deal with the Fed here, right? Yeah, 100%. You know, Federal Reserve has two mandates, low inflation and low unemployment. They've had low unemployment for a few years now. Unemployment saved up to a 4.3% until a few months ago was under 4%. So it's right where it needs to be. As far as inflation is concerned, their target is 2%. They're in that level now with the mid twos, depending on whether you look at the CPI, the core CPI or the PCE, you know, it's all in the mid twos. And they have to make changes before they get to their target level, because they don't want to be behind the eight ball like they were when inflation started going through the roof. So they lowered the 50 basis points their last cut. It's widely predicted that in the next Fed meeting or the Fed meeting, after that they're going to go another 25 or 50 bibs. And then in 2025, maybe another 1% or so, something like that. So it's been predicted that they'll do 200 bibs over the course of the next years. You missed one thing though. The Fed actually has three functions. Keep prices stable, keep employment level stable, and keep the stock market from going down. Yeah. Yeah. That's what they say, right? That's what the president said. That's a third function, but it's an unwritten function that really is not a part of anything that they're supposed to be considering. And they'll tell you that they're not. But when it comes to the election cycles, there is this debate about, you know, they don't want the market to fall because of the market falls that all of a sudden recency bias comes into play. Recency bias is the simple fact that we tend to act on what happened recently. And if the market fell recently by before bad timing, a good effect the election. So, you know, so they do have that in mind. They're not supposed to have that in mind. You can't keep it out. It's all intertwined and lowering by 50 bibs is certainly going to help the stock market. That's why the markets hit some record highs other than the, you know, few bumpy days that we've had. But you're right. It's really not a mandate up there, but it's kind of implied in the what they do. But it has been predicted and it is forecasted. They're going to lower by 200. Yeah. That's over the course of the next couple of years. That could be good for the stock market. Is it going to keep us out of a recession? That's a big question that consumers are asking, you know, the reality is, is, you know, we don't know, they've been talking about soft landing. They've been talking about hard landing. They've been talking about no landing. It's just the longest time period that I remember where we've been talking about a recession and the recession hasn't happened. And the fear that I have is that we could still have a recession around the corner. You know, we had an inverted yield curve for a couple of years. It's uninverted. And when you look at the history of sessions, I don't want the numbers in front of me, but many of the recessions happened after the yield curve uninverted. And my fear is that a lot of people think that the stock market is a safe haven. And a lot of people might think that we're not going into recession. And that could be a big mistake because we're not recession-proof. And it still could be around the corner. You need to invest. So whether we have a recession or not, you're going to be just fine. And I find that a lot of people are investing in a way to work the stock market does bad. It goes against them. It's going to wreck their retirements, going to wreck their future. Don't do that. Invest in a way that's right for you for your phase of life. So you have the ability to win no matter what. If you're invested right, that's what should happen. It shouldn't matter who wins the president. And it shouldn't matter whether we have a recession as to whether you'd be able to accomplish your goals or not. It shouldn't. But if you're later in life and you take a big hit, that's going to make a big difference in your life, isn't it? 100%, which is why you shouldn't be in a position to take a big hit. And this is something that I talk about on my radio show, my podcast. I talk about it on my book. You have to be invested properly for the phase of life that you're in. If you're invested in such a way to where you can take a big hit, and if your retirement is going to be invested, if your retirement is going to be affected, if you take a big hit, then you are invested wrong. You need to be invested in such a way to where you're going to be able to retire when you want, or you're going to be able to stay retired. If you're already retired, I don't want you invested in such a way to where if the market does well, you can travel. If the market does well, you don't have to get a part-time job. If the market does well, you can do the things you want. I want you to be able to travel and not have to get a second job and not have to keep working and retire on schedule regardless of what the market does. Even if that means you have to get your portfolio more conservative. So you have to be invested properly for your phase of life. And you should not be in a position to where your retirement is going to get racked if the market doesn't do what it's supposed to do. But over time, and now we've got hundreds, well, in the U.S., we've got it goes back to the 1880s, the advent of the Dow Jones index. But in Europe, it goes even further. But since since the advent of the Dow Jones, a dollar invested would reap huge returns. We still have never found a machine that creates wealth like the financial markets, especially the stock market, have we? Well, no. When you look at the history of investments and what investment has done the best over time, the stock market is certainly in that category. And you look at the past 100 years, the Dow Jones, talked back to late 1800s. I know it's going to average somewhere between 8% and 10% a year. But the fact is that there are long periods of time where the market included the Dow Jones is flat. And then there's long periods of time where the market does 15% plus like we've had for the last dozen years. And it depends on what generation or what decade is going to be next. But the history of the market tells us that there's bad decades followed by good decades followed by bad decades. Even if you go back to the last 25 years we're coming up on 2025, let's go back to the turn of the century and kind of see what's happened there. From 2000 to 2013, we had the crash of 01 and a recovery. We had the crash of 08 and a recovery for 13 years. If you draw it out, it's a big W. There's no growth in the market for 13 years. And if you wanted to retire in 2000 and you were planning on following the rule of 4% and selling, you know, spending down your portfolio for the next 13 years, you would be really close to running out of money because there was no growth in the market over that 13 year time period. Compare that to the last 13 years. The market's up 15, 16% a year on average. So when you average the two together, the reality is is that is that you wind up with yo, seven, eight percent a year, you're throwing some dividends, you're going to be nine, 10% a year. But averages can be very misleading. In the way of the stock market, the first decade and a half was horrible, no growth. The last decade and a half was great, but it's misleading, even though we can say it averages eight or nine percent a year. I can tell you carry truthfully a good example of how misleading averages can be in real life. In my example, my wife and I run about, we average about 10 miles a week. The true. But the reality is that's not the whole story. The way I get there is that she actually loves the ride as she runs about 20 miles a week. And I, I don't run. So the reality though is don't we average 10 miles? You have a good average now. We have a great average. But the reality is when you know the rest of the story, it paints a different picture and it's the same thing with the market. If the market does in the next 15 years, what it's done in the last 15 years, I don't care what you do. If you're spending down your portfolio, if you're following the rule of four percent, you're going to be fine. But if the market does in the next 10 or 15 years, what it did in the first 13 years of the century and you're spending down your portfolio, you could be out of money and you could be in trouble. And that's what I don't want to happen to you. So yes, if you're trying to accumulate, you have 20 or 30 years ahead of you be on the market, be in mutual funds, rate strategy. Over time, 20, 30 years, you'll average 89%. There's never been a 30-year time period in the market that it hasn't done that. But if you're in retirement, you can't afford that the next decade or decade and a half, the market's going to be choppy and no growth and be selling assets at the same time. You have to be focused on living off the interest and dividends of your portfolio so that you can protect your principal. And if that means less return, so be it, it's accomplishing your goal. Well, it reminds me, I think John Maynard Keynes said in the long run, we're all dead, right? That's exactly right. But some people are dead with more stress than others. Yeah, running out of money, if you're invested wrong and you're selling shares, you're following the rule of 4% and the market takes and now you get to sell more shares. And you know you're in a race against time because you're cannibalizing your principal, that thought knowing that you have to die before you run out of money, that thought can actually kill you or make you wish you were dead anyway. Well, Anthony, just tell us, where do we find you? How do you connect with people? How can we connect with you? Yeah, I think the safest way to go is you can go to anthonysecarl.com. My businesses are there on the website, ProvidenceFinancialEat.com, or if you just search Providence Financial, Woodland Hills, which California, which is where we are, we come up all over the place. And if you have any questions or have any questions about anything we say, more than happy to answer those questions as well too. All right, well, the link to your site is in the show notes in this interview on financialsurvivalnetwork.com. So just go there and click it while you're there. Please sign up for your free newsletter. Got a question for Anthony myself, kl@carreluts.com is the place to send the email. Always appreciate you coming on Anthony. We'll talk to you again real soon. Thank you for having me, Terry. I appreciate being here. Thanks for listening to Carrie Lutz's Financial Survival Network, your solution to today's trying times. 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