Coronavirus And Your Finances: We Answer Your Questions!
Wow what a difference a week makes I mean just to let you guys know. You know the money guys show. We Wanna be your source for good financial information. We also went entertained. You sometimes money you can get lost in the weeds with it. But I I knew we had an issue though when even creating thumb Nell for this special question to answer show We didn't have anything that reflected because we're kind of fun loving guys and you know we didn't have anything that reflected that so it showed me that man this is when you're looking for thumbnails reflect the time that you're in it shows what unique periods because think about the the week has changed so much schools are now out and we're gonNA be doing remote learning. We've got travel restrictions globally. Who knows if it's going to happen any impact? Domestically weren't even supposed to be here. This week of US must be traveling grocery stores. I mean we we're seeing. Fortunately it looks like you can still get a lot of supplies but toll paper cleaning supplies things like that. I mean every grocery store I've been in has stated policies. Now to keep people from hoarding. And then social distancing has now hit our vocabulary. Yeah it is was thing so we want to be serious about this because this is We know this is one of those times. We'll look back. They'll be talking about this fifty years one hundred years from now. There'll be books written about this. There will be after action reports talking about this so a lot of you guys and it and it does deserve to have the letter level of action. We're taking because people's lives are at stake especially our parents. Our grandparents anybody. Who's in that dangerous zone are has underlying health issues? That is this is serious business. And that's why I would encourage everybody we're going we're going to focus on the financial things you need to consider but I do encourage everybody go to the sources go to the CDC Watch the daily press briefings. Because there's I know I am glued to those type of things because I can. This reminds me a lot of ways. After we had the two thousand eight two thousand nine financial crisis there was started to be daily briefings on what was going on with. You know shotgun marriages and so forth in the banking sector. There's nothing like that because this is not something that was because the financial system is coming apart. This is more like a a natural disaster. A war were all kind of grouped in this. The whole global world is grouped into this same situation. So I think it is worthwhile to make sure you're preparing your family doing the good hygiene also following the guidelines that are being put out by the government but I do WANNA pay respect that but also WanNa make sure we equip you with the right decisions. You should be making for your family to protect your wallet as well as your long term goals because it is very easy to depart from the path. That's going to get you through this so what we wanted today as we're GonNa this is alive. I WanNa give you some opportunity. Ask US questions kind of get our tastes get our insights but before we do that we wanted to kind of lay some foundational thoughts out therefore you about how you should be looking at this from a financial perspective and how you ought to think about this in the grand scheme of financial decision making and ultimately wealth-building so. I I kind of want to jump in and talk about staying the course because we're getting the questions. This is the part where if you have a financial advisor this is where you go quickly find out if your financial adviser is playing in the majors or if they're working their way through the minor leagues right now because there is a lot of questions that are coming in from clients and one of the first ones. Everybody is dealing with this is. Why don't we go to cash? Let things calm down and then get back into the market later. This is always the question that comes up when we start having a water volatility. Yeah in general. He goes something like this. This is how I was here. It's someone who is supposed to say. Hey by the way. I'm not freaking out. I'm not scared I'm not but I think it's going to get worse. So why don't we just go to cash? I'm not freaking out. But why don't we just make a huge decision to change the course that we are on and it makes sense because emotionally in the short term. It feels better to do something to react and realize also human nature is. We are herd animals so it makes sense that when we spot you know some type of danger our first gut reaction is. Let's go seek safer grant. But here's the problem with it is that I I've been through quite a few downturns I've actually I'm old enough. I've been through bear markets. And you never know the day of recovers the day that we hit. The bottom of the market is feels like every other day. It's not like there's a press release or some type of information that goes out and says guess what all clear from here on out you've survived. Congratulations it happens. And then you start noticing. We have put together a few days. It's that whole falling knife. You never know when the market. That's why you have to be careful a lot of you guys. I look we did it to. We've already funded are as we've already funded. Are you know health savings accounts for the year? We tried to be opportunistic. And then we realize. Hey the timing on. That wasn't her was a perfect. So you you you know you're starting to catch on and that does impact you emotionally so what we tell. People is to realize the worst days usually have are followed by some of the best. There is a lot of return that occurs in very short period of time. I know when we we've done a lot of presentations. We show the worst periods for financial markets and I'm always surprised that the brethren the period that shows the best periods in the markets typically follow rightly afterwards. So we thought we'd show a few illustrations on why missing some of the best as in the market is actually so powerful to looking at your long term performance and so it's a really hard thing to do. I mean we all we all almost. Everyone agree that we don't have any sort of ability to time. The market's really well. Well the immediate question you should have is just how costly could it be if I get it wrong? And so this is what we said. We said if we want to look at what happens. We just missed the best days of investing. So we're going to look at the S. and P. Five hundred the five hundred largest companies here in this country. We're go all the way back to nineteen eighty through the end of two thousand eighteen. So we're looking at thirty eight year period here. Well if you're just invested that ten thousand dollars in one thousand hundred and just let it ride all the way through twenty eighteen. Your ten thousand dollars would have turned into almost six hundred and sixty thousand miles stuff. So let's just stop right there and acknowledged the power of compounding interest. The power of letting the market do with the market does because in this time period we saw oil issues. We saw great recession. We saw DOT COM bubble burst. We saw all kinds of huge black swan events. This still allowed a ten thousand dollar investment to turn into six hundred sixty thousand dollars. This is this is a perfect illustration of while wealth creation is so simple. You just put the money. In the market LET COMPOUND INTEREST. Do it but wealth creation might be simple does not necessarily mean. It's easy because remember human nature is going to tell you seek safety protect yourself because there's Bosa there's lots of bad stuff that happened in this thirty eight year period. So let's talk about now. What happens if you did do what everybody's got reaction? Let's go to cash. Wait this out and then get back into this thing thirty days or just when it feels better even had a phone call yesterday with a client said. Let's just wait until the dust settles and then we'll be okay. Let's see why that doesn't work so if all you did was missed? The five best trading days in that thirty eight year period instead of ending up with six hundred sixty thousand dollars you would end up with just under four hundred and thirty thousand dollars so five trading days cost you that much if you missed ten so we're only talking about two weeks two business weeks here. Ten days your ten thousand only turned into three hundred and eighteen hours. Cut It in half if you miss the best thirty trading day so one month worth of trading days. It's only one hundred and twenty-five thousand if you miss the best fifty days in that thirty eight year cycle your ten thousand turned into fifty seven thousand. Now here's what's interesting if you look. At how many trading days there are in a year I want to say it's like two hundred and fifty two something like that. You multiply that thirty. There's something like ninety five hundred trading days from somewhere in that ballpark. I think it's ninety five seventy six or something like that if you just missed fifty of those nine thousand five hundred so much as it's zero point. Five two percent zero point five two percent of all trading days. If you're not in the market could be the difference in a portfolio of six hundred sixty thousand dollars or sixty thousand dollars now the media thing that someone says. Well we'll guys you. Did this all wrong? What happens if you miss the worst trading days yeah the illustration would show something very similar? We're simply making the assessment here that you neither have the ability to miss the bet worst or miss the best but what we know is at odds. Are you're going to miss out on the best? Well you gotTA GET RIGHT TWICE. Even if you nailed this thing on the bottom and went straight to cash that recovery does happen so quickly that how do you know when to get back in? Because like I said March ninth of two thousand nine felt like every other day but that was the beginning of the end so that leads the next question that a lot of people will have is. Okay I hear you guys and I understand. That's great but this is different. This is completely different. We never experienced like this. There's a reason we're calling this a novel. Virus is because the human body. We're all susceptible this is. We don't know how this is going to flow through the population so we're in a new paradigm we're in a new period and I'm telling people look I know this is unique but this is very similar to all the downturns I've experienced in my professional career. I mean if you think about all the things have happened. The DOT COM bubble. I mean we've had a WADA geopolitical stuff. We've had nine eleven that we've had you know the the financial crisis where the wills were literally coming off the financial system that we all count on in the markets in general. You know we're for your banking or you're getting paid. It was all going bad really quick. So we've all experienced really horrible times and then I remember. Hey I've kind of been here. I remember how this is how this is felt so I felt like this is a perfect illustration to show how going through this can actually build value for you so all my younger listeners. This might be I. I just did a New York Times piece. That went out yesterday. We'll we'll make sure that that's in the link. Then people can go find. But it's four millennials. On this is the first downturn they've ever experienced as investors. How should they handle his? I'm telling you guys bottle this up because the gut feeling to her to safety is something that will serve you well for the rest of your wealth building life because this never feels good. It never fails easy to go against what you psychologically and emotionally want to do for yourself. So then you're probably saying what is this guy? No how can he be sure? This is the case. Well fortunately for you guys. I'm old I mean I no serious. I've been through some several downturns I've also before we started calling this content creation. We all know I started a podcast in two thousand six. We know the Youtube channels had success. But what people don't realize there was a term before we call it content creators. This is pre social media. We called ourselves columnist and I had the opportunity that I was writing articles for newspaper back in the early two thousands and I want you to pay attention to something here. We have it up on the screen. I Rode Egg. Young Man wrote this. I mean you. Fortunately the the pitcher is kind of the. It didn't age well when you try to transfer this to a slot but yes. I had me back in October. Third Two thousand two. So what is so important about October? Third of two thousand to that date is approximately what four days and four days from US reaching the dead bottom of the DOT com bubble. And so I wrote an this column titled What You Should Know. An uncertain market. And here's what I won't people realize I put something in this column that we're now going to go back and we have the benefit of we've lived through more. We can put what I said in that column to the test to see. Did I know what I was talking about? And Was it realistic? And is this something we can count about count on now because I do believe we will make it through this. This is something that there is going to be a lot of ben up demand. Yes this is going to have ripple effects yes? This may cause a recession. But we've been here before guys. This country is resilient we will make it through this just like we did in the past. But here's the key points I want you to understand. So this is what you said in the Article Ron. You said on average markets rise by nine point eight percent one month after the bottom of the bear market and then very pithy said if we can only know when the bottom was. Wouldn't we all be rich? Furthermore if you expand the time period to one year from the bottom of bear market the stock market's aesthetically rise. Twenty six point two percent over the subsequent twelve months words of Ryan press so two key points their first month. You have about a ten percent pop in the market. I twelve months. Twenty six point two. This was written in October. Two thousand two so we have two periods we have the DOT com bubble. Because remember I wrote this before we covered and then we have the great recession that occurred in two thousand eight and two thousand nine. Let's kind of go look. You can see those dates up on the calendar so by the end of the bear market occurred. October ninth of two thousand and two. What was the rest of the story? So the rest of the story is over. The next month market made eight point six four percent lower eight nap percent and then you can see the exact same thing in March of two thousand nine over the next month after the market bottom out it made eight and a half percent so if you're someone that just said you know what I'm going to get out on a miss this you would have missed that huge pop right there in the first month following the bottom. I mean if we were playing horseshoes that's getting you more than just one point. I mean that's leaning up against the Post. I do like to say because that's really close. So let's talk about twelve months so if we look at the next year After the DOT COM bubble burst next year the market return twenty two point one six percent over the next twelve month period. But if you look at the Great Recession. We'll talk about this in a second. The rubber band down in the next twelve months following March of two thousand nine. The market made over fifty percent. Fifty one point five one percent in the twelve months after the bottom that nobody knew it was the bottom until after we look back and said. Oh wow it was the bottom. So let's talk about those two numbers on the outside because you probably know s got the biggest variation. I'd predicted back when I wrote the column in Two Thousand and Two a twenty six point two percent recovery. We look at what happened. After the DOT COM bubble. We say well that was actually a little less twenty two point two percent but then in March of two thousand nine. That was a fifty two percent. What can account for. Is there something we can read an apply to what's going on right now and I'm telling you yes and you mentioned sure? There's what we call the rubber band effect remember markets. Recover the reason I could write a column like that. No look like I almost was reading the tea leaves are giving prophecy is that I do know markets recovering. What's called a v-shaped recovery? We don't realize when we're selling a lot of emotional stuff is going on. We just kind of throw out everything. And then there comes a point where people realize. Hey there's some value to these companies it's just you know. Apple is still go. Continue to make our phones. They don't have a leveraged balance sheet. They don't have a lot of debt. There's some value there that we're kind of throwing out on. Its ear that we ought to pay attention to so. That's how I know is very irrational. Go way down and then one day the market realizes there's some opportunities out there so you see those v-shape recovery's and we talk about. How do you know how fast you'll recover? Typically it is the rubber band effect. If you visualize pulling down a rubber band or a slingshot the further you pull it down the more tension the more energy that is developing when you let go of it just like the steepness brought it down. The steepness brings it back up you can. What is the headline that we've seen? We have reached bear market status the fastest in history. Yeah this is blown the roof off of how fast this market has reached bear bear market status that you can only think about the coiling of the energy that is probably being built up and this is one more reason why you have to be so careful with timing the market. We have a visual. That actually does even better on showing this. So let's talk about a history of mark ups and downs. So this is the S. and P. Five hundred total returns from January of Nineteen Twenty six so this even predates the great depression through December twenty seventeen so after the culmination of the great recession and you can see below the x axis in red are the downturn so we have the Great Depression we have the late the late sixties the late seventies we have the DOT com bubble bursting. We have the great recession when you look at these downturns in contrast to these subsequent bull markets that followed and you think is an investor may rather participate in or would I be willing to put up with a little bit of short term pain in order to receive the long term benefit of being an invest bull markets. We think that this picture says everything. It's not about time eating the market. It is about time in the market. If you're someone is trying to get out and time it and play it just right. The odds are you're gonNA miss some of the most exciting investment days at the markets are going to present you with so. Let's let's look at because I think Bo is spot on but I wanNA kinda create some teachable moments. Here we can see from the DOT com bubble that says that it was about a twenty twenty five months yet so that's a period. That's why when you look at the rubber band it was being pulled down but slowly. The energy was coiled. That's why when the recovery did occur is about a twenty two percent is based upon the steepness. The Link Tom. How long did it take to pull that market down to bring it back up? Whereas contrast that with the great recession which was sixteen months but it was much much steeper you can see the energy that was built on that. And that's what led to a twelve month return of about fifty one percent. You can make some some correlations to how that will likely play out in this market too so that is such a powerful thing but it does tie into and I thought it would be crazy because we do want to give you some tips and tricks on what you should be doing with your own personal finances. But how do you not look at the optimistic side of this slot? We see how much better it is to be an investor versus betting against what's going on in the economy. And how could we not do a quote from the Oracle of Omaha talking about predicting things and being accurate? There's a reason. Warren Buffett has the nickname oracle from Omaha. Let's let's kind of look at a few of his quotes. I put two slides together. Here's the first one for two and this is by the way I want to give this some context. This comes from the twenty fifteen letter to shareholders that he does for Berkshire Hathaway and realize twenty. Fifteen was not a great year to be an investor so warren every now and then in his letter to shareholders will give us a pep talk. He'll say guys it's going to be okay. Pay Attention I've been around. I've been on this earth for eighty plus years. I've watched my wealth go to eighty one billion dollars. I've learned a few things. That experience has created wisdom which? I've learned a little bit and he shares it with us. So here's this quotes. Here's the first one for two hundred and forty years. It's been a terrible mistake to bet against America and now is no time to start. America's Golden Goose of Commerce and innovation will continue to lay more and larger eggs. America's social security promises will be honored and perhaps made more generous. And yes. America's kids will live far better than their parents did. I know that seems scary right now. You'll looking at what's going on you. And how is that possible? It is guys. This pizza pie is getting bigger innovation. Opportunities are out there. We just have to weather the volatility. That's come into us. And that leads to the second quote from warm same letter to shareholders moreover investors who diversify wildly widely in simply. Sit Tight our repeat that diversify wildly and simply sit tight with their holdings are certain to prosper and America gains from winning investments have always far more than offset the losses from clunkers. I mean it's it's assistant credible. During the twentieth century the Dow Jones Industrial Average and index fund of sorts soared from sixty six. That's not a Typo to eleven thousand four ninety-seven with its component companies all the while paying ever increasing dividends. There's just something to that. I mean look by the way you can see back at the end of two thousand fifteen or he was writing this probably in January February of Twenty sixteen. The Dow was at eleven thousand four ninety seven. We're sitting in the low twenties right now so even from the time that worn wrote this there was opportunities and look yes. It could come down. There could be worse days before we get to good days. But I'm telling you we are getting to the point that you need to have your plan of action to know how to survive this you know investing is like a is a really interesting thing. It's one of the few activities then. It seems like you're often rewarded more for inaction than four action the action you need to be thinking about as okay. How much am I saving? What am I saving two? Am I following the Foo? Ud focus on controlling the things that you can control and not trying to control the things that you can't control investors just like what Warren says right here get rewarded for being patient through time. So let's let's let's pivot now and talk about what you can do in this perfectly to what you just said. Great Transition Point though is that I think you first. You need to separate. What's actionable versus actionable information? I mean there's so much going on right now getting information on school finding out what you should be doing to protect your family from a health. Perspective is all actionable information. However watching the daily whip saw reactions of the stock markets and the financial markets. I would argue has reached the point of being UN actionable. Yep so you don't need to freak yourself out. This is look 'cause I'm going to get into the next steps of things you should have already done or things you should be thinking about but you are probably at the point. The best thing you can do is cut it off or or quit looking at the daily account statements. I will personally tell you. I have quit logging into my financial apple APP. That has my counts. I'm just not looking at it anymore. It's not serving any purpose. I know that it's rough out there but also I had a plan. That's good before corona virus came. It's good during Corona vars and it will be good after corona virus and that's the important part and how do I know that it's good? So here's the first thing number one double check your bridge. This is the bridge. Do you have enough. Non Risk or unrest no risk assets like bonds like cash. That you know that you have a bridge to get you over these troubled waters for the next twelve eighteen twenty four months because this will recover if you were retiring five years in the future. I I'm willing to say I think that this will probably not have as big of an impact as you think it will. This is one of those times where we've come through such a strong bull market a lot of folks. Why WOULD I hold cash? It's not even paying me. Two percent the investment markets are turning so much better. Why would I keep emerged deserves? Why would I had this right? Here is the reason if you'd have asked any of us a year ago. Hey next year. They're going to be a pandemic. That's going to send the world into a frenzy and cause the stock market decline very rapidly. None of us would have seen that coming with the folks who plan well said okay. I've got my mercy. Reserves and I have an appropriate asset allocation that takes into account my unique risk tolerance and time horizon. If you have those things in place you understand right now that this too shall pass. You shouldn't have to be making adjustments now because the plan should have been good before you started and now it's good even in midst of the craziness why I think it's one of those things where if you are looking for something you should be reviewing or something you should be taking action on. Go look at your automated automated savings and investment plan. So if you're part of a four one K. If you have a monthly savings goal that's going in. That's the part now we. We've passed the point of getting cute trying to figure out when you Tom your entry into this market. I do think you can go review all of your automated savings plans. Make sure that you're doing everything you should there. And if you are long-term say you're fifty five and younger. You know you're working and you're out there. This is a chance to go. Look at your allocation for your monthly savings as well as turning on reinvesting dividends go and be opportunistic that we don't get cute with trying to time the market but be opportunistic to make sure that your automatic investment plan is going to capitalize off of this volatility. I want to pause there for a moment. This is what Brian did say. He said be opportunistic. With how you're thinking about automated savings. This is what he did not say. Take all of your cash. Reserves there for a reason exists for reason and start putting it in the market because this is the opportunity to lifetime absolutely. Not if you're someone who wants to take advantage of the opportunity to livestock lifetime. Look at your monthly daily weekly spending or their discretionary items. You could potentially cut out on take that saved money and invest. That's great. That's fine. Do that don't start taking the emergency fund out of the Emergency Fund and putting it at risk because that's not the purpose that it's supposed to serve. Don't remove the emergency brakes as you know there's a reason we all get an elevators because this is elevators go up and down and it feels like definitely markets right now are going up and down but none of us would ever get in an elevator. We know this just a little cable. Probably no thicker than than what? I'm showing here. That's carrying all the weight. None of us would get in that elevator. We knew it didn't have a backup. Redundancy system like emergency brakes. It's the same thing with your portfolio. Here what Bowe said is that you do need to make sure you have your bridge. You have your emergency reserves. You have enough money to get you through this process. But yes I want you to look at your automated investment plan and make sure it's also reflecting that there are going to be opportunities but I liked the fact when you're doing systematic. It takes the behavior out of it. We're pass the behavioral play. Everybody who thought they were smart including ourselves with funding are our contributions are our HSA contributions for the year and we were shown that no there's more to go and he could get worse before it gets better that's why it's important to create systematic meaning removing the emotions processes that. Keep you on track to reach your goals as well as create opportunities to be that financial mutant that does get you through. This process I know led to. I kind of wanted to do this before we kind of opened up to question is. I know a lot of people right now. We appeal to do it yourself because we give you all the tools we give you all the tricks. Because that is part of the abundant cycle. Where we're go- come love on you. We want you to come absorb as much as information as you can for free. Learn apply grow reach levels success but I think there are probably a number of you out there watching this. You feel right now in this craziness. You feel like a rudderless ship. Yes you are a even big ships. You are some of these cruise liners. You built up north assets. You've had enough success but now you're like what am I doing here? I don't feel like I have a plan. I don't know that I I feel like I'm now playing catch-up arm reacting versus having a plan that's good before during and even after that's the problem. I think I said earlier. This is when you can tell either if you're a do it yourself or or you're working financial advisor who's in their minor leagues. You quickly get to see who's doing what they're supposed to. So I would encourage you if you need a rudder. This is the time to probably go figure out what your plan is. Yeah and so. I had a buddy comedy today Brian. I said Hey I'm just curious. I've heard you talk to me before about and you say like when stuff gets crazy. You shouldn't be doing anything. So are you guys really sitting around? Just doing nothing and I said absolutely not one of the things that we're doing right now for clients is we recognize that. There's an opportunity. The market is presented. Us did if you taxable investments. There's a lot of a lot of losses in there that we can go harvest so for a lot of clients without changing their allocation. We'll go harvest those losses that we know we're going to be able to use in the future offset other capital gains and potentially even ordinary income for this year as well as a number of years into the future for clients who came to us who had large embedded gain positions. Maybe it was in a company stock or something that grandma gave him fifty years ago. We weren't able to allocate away from that because the tax consequence of it now. This is allowed an opportunity where we could potentially allocate away from some of those positions so it is giving us a great opportunity to look at okay is the portfolio structured the way that we wanted to be structured not from a risk on risk off perspective. That should have been right on the front end but from a tax optimization standpoint long-term would also gives you a chance to know your why I mean what do what do we even saving this money for. What are the long term goals? What's the risk profile? What are the needs that you have in the short term if you can have somebody have essentially a beacon or that lighthouse up on the hill since we're definitely in turbulent stormy waters? That's what if you can have that. It does give you purpose. And then here's the biggest thing. Some of us are not equipped to have that worldview where we can go outside the heard and be different. So you some I mean what have we been doing the last two days riding lots of emails talking on the phone to a lot of clients making sure that we're holding their hands to understand you? We got this. We're going to make it through. Volatility is your long term friend. It's only through volatility that we can get out and do the pruning of the bushes to make sure that this tree is going to grow strong and continue to do well. I know that sounds hard. I know that even might sound colder than I wanted to. Because I get I feel your pain. I will tell you any good financial advisor right now. You might be losing sleep. But I can promise you your financial advisers losing sleep too because we all bear. The weight of how much of our clients are counting on to make it through this and went. Never feels even though I've been through this before it never never feels easier. It hurts every time I go through it but I also know this to shell pass. We will make it through these stormy waters we will have moments where we can have five again instead of just doing the the elbow that we're allowed to do right now. Those moments will come in the future but we do have to make it through this and I think we can do it. Just keep your head pay attention and by the way a lot of you guys are probably have questions. I know the government is trying to take action right now. There's legislation that's being developed. Are you know? Can you talk about that stuff? Because I even saw Bo before. The show started mushrooming. Here's my promise to you guys. We're we care so much about you as legislation passes we will do future shows where we tell you what you can do what you can learn from that how you can apply and you know how this impacts you. I am not going to get into because there's a lot of stuff on the nightly news about proposals. I think you have to be very careful because anything that is dealing with politics is going to have some weird they leak stuff here. They say stuff here. It's not actionable. It's actually noise. It can distract you. We're not going to cover stuff that I think right now is working. Its way through the political process but I can assure you as soon as we have. Actionable information we have legislation that the House the Senate has passed and the president is moments from putting his signature on. We're going to be your resource. I WANNA make sure there's so much that you want to be. I WanNa be your resource that you feel like you have a place to come to to get the information to know what to do with your family and that's probably a great lead into. Let's answer some questions. All right so we we gotta tell us just bank. Let me answer the first question somebody on your said. Hey Bo are you okay? It's not you sound kind of Netflix. This is what's going on. I was asked months ago to MC or cross fit competition past weekend and so for like eight hours. I was yelling and cheering everybody on the competition. So that's why my voice sounds that I'm actually feeling great right now. You realize how lucky you are that we're in such a unique Tom. I can't completely just beat on you. For what the state you cross fit competition. Amc There's a lot of really trying fruit there that I would love to to to utilize but I'm Gonna. I'm GonNa pass right now because it's just not the appropriate time so I wanNA give everybody a I wanNA give everybody. We're going to question someone be quick. Some we'll take a little longer. Here's the first from Donnie says. Hey I have. Cash RESERVES READY TO BUY A dip. Should I put it all in right now or dollar cost average over the next month? This is a really interesting Brian. I want to hear your thoughts but I'm going to frame question one. Should I use my mergers invest questioned? One that'll be answered quickly to. How should I think about dollar cost averaging right now and I have some thoughts on that second part? I think it's interesting. Part of me is a financial adviser. I'm always paying attention to what clients are asking where things why law because I'm trying to figure out where we are in the cycle of market emotions. I mean it just guys when I'm not only trying to give you the council. I'm also paying attention to what you say to try to here to see if there's something to glean from that. I was a little nervous over the last two weeks. Because I have had clients who were foregoing and I'm talking about clients. That were even in their seventies foregoing buying cars to To get in the market and things like that that that concerns me only from the action actually think sometimes if it was appropriate. Maybe it is a good time to do that. But does it fit into the long term. Is this more of just like his question shall take cash reserves to put into the market and Tom this thing. That's the part that gives me pause because it means we probably haven't cleanse because here's the truth of the matter is cry go get worse before it gets better because people when we're getting close to the bottom will cuss the stock market. We already getting close. I will tell you I'm getting to the point. I'm getting calls where people are custom any type of risk assets. They like. What the heck were you thinking putting us in this thing? It's too crazy but so I I would. I would caution you from getting into those emergency brake moments remember. I talked about elevators. Have Little Cables Holding lots of weight? The only reason we get into him is because we have emergency brakes. Protect us in case the cable ever breaks the cable is potentially broken. We need to have the bridge assets. The cash reserves the Fixed Income. That will get us the other side now with that said. I know that we do have people that their cash reserves. Because I I will tell you. I learned from the blast financial crisis. I'm always keep a little extra powder money I'm gonNA keep a little extra. That's above and beyond cash reserves. I don't know if I need to buy a building for the business. I don't know if I'm going to need to have this. You know always WanNa keep a little bit of extra money for that purpose. It's not considered cash reserves. I do think you can be opportunistic with that. But there's a good chance you go get it wrong from an emotional state because remember. Nobody wants to buy stocks win. There actually is the best time to buy stocks. So how do you go ahead and line yourself up for success? I would recommend creating a systematic plan. Yes so I'll tell you. For instance let me give you two examples of some things. I'm doing. His eye of everybody knows I'm on an aggressive. Pay Down my mortgage for the next five years I was going to have my house paid off over the last month. I have changed now. I'm paying back to the normal mortgage but I have increased. My dollar cost averaging on my monthly systematic plan to account for that also monthly investments dollar cost averaging. I've increased that and made sure I find tuned it. I think you can do the same thing. Yes dollar cost average over the next few months because more than likely. If you're trying to just go off your gut your gut will be wrong. There's a reason to heard Mrs the recovery's and also misses the opportunities because your gut will likely be wrong. Systematic investing is going to be your friends. I agree with that full full now. I want to talk to other side of the coin because I've actually seen a lot of this right. Someone say hey. I'm sitting on like here's a great question from Coal Lewis. He said if we're sitting some of money earmarked for investing. When should we put it into the market or would you recommend putting it on the principle of the house? Well the quite. That's a pretty easy question. If you're under forty five and you think about what the mortgage rate of your mortgage is versus. What the army dollar bills can do for you. Odds are probably tilts in favor of building your army of dollar bills getting that invested. So then the question becomes okay. How do I approach that? And I'm having folks all the time that are saying to me. Hey I know we're on this dollar. We put together this plan and it was great. Now we're going to cost average into the market but man. The markets getting hammered right now. Should we accelerate that and so the thought is? There's nothing wrong with adjusting your plan. But here's what we don't know. What if this is just the beginning of the downturn and you decide you know what I'm Exceleron? All my dollar cost averaging into today's person to buy everything today or last week or last week's purchase or the week before because all of them looked attractive. Two weeks ago it looked attractive and last week it looked attractive and this week it looked attractive and realistic terms ten years from now. It probably won't make an huge difference which week you've got in but behaviorally will you be able to stand it if you put all of your money in now and this thing drops another fifteen twenty thirty percent. We don't know what's going to happen but the reason that we even do things like dollar cost. Averaging strategies is to remove the emotion from it. Remember to emotions when it comes to investing. There is fear and greed. We try to dollar cost average to remove both of those so that we don't get it wrong so for example. What Brian said and I think this is beautiful. If you want to change your dollar cost averaging strategy don't just pull everything into this current period maybe increase it if I'm thinking about dollar cost averaging ten thousand dollars a month maybe the change on make isn't that I invest fifty thousand dollars today. It's I increase it to like twelve thousand dollars a month or something like that because you most people try to time the market on the get out. Well now. We're seeing people trying to time the market on the get in. Maybe you're right. Maybe you're not the reason that we put plans and strategies in place is to prevent us from being one hundred percent right but to also prevent us from being a hundred percent wrong. I think investing creates inevitable wealth because remember wealth creation of wealth creation is simple not necessarily easy so the systematic plan protects. You from yourself because you will your behavior. Your emotions will be your worst enemy. Volatility is healthy. You just have to make it through it but also balanced. I mean. That's the thing. Is that wearing unique? Tom's here protect your family from a health perspective but also make sure you're not making emotional decisions from a financial perspective. So here's one this has. This is from a meat. He says I'm going to thirty percent tax bracket is this a good time to switch 401k contributions to a Roth 401k? I get company match for both currently maxing out using a traditional 401k. I'm going to reframe his question to see if I can get to the root of it. Hey Brian in light of the volatility in light of what's going on should that affect my decision to put money in pre-tax or roth or is there something bigger that affects that that's not market volatility? Because we stay pretty steadfast on this on this this guidance I understand what his question is. If things essentially have a twenty percent off coupon right now wouldn't it be great to get those assets in tax free Roth and then as we slingshot forward? You'll have all that recovery in tax free growth and and that's great and that might lead you to. Here's what I think is great about the gardens we've given in the past and you can apply to this too. We think if you are in a marginal rate that is less than twenty five percent and you're young especially ball means go. Ross we do give you grey zone coverage of twenty five to thirty percent if you add your federal plus your state income taxes to twenty five to thirty percent. You're kind of in that gray zone. Yeah by all means you choose. Should you be pre-tax? Should YOU BE AFTER-TAX OF TAX? Free like Roth it might be. You could take this into consideration. This is now a new variable. Is that you've got a depressed financial markets. Yeah maybe that now pushes you more towards tax free growth than it does pre tax deduction but I think I still stand by the fact that once you're into the higher tax brackets brackets of the thirties greater than thirty one percent. For sure you might be looking at. Yeah there's still a great tax benefit to getting the deduction So I still think that stands up. I do think that because everything we do for clients as the one thing. That's a little harder doing a podcast and a youtube channel. Is We try to give you guys information that works for everybody but everybody has different ages. Different wise different risk profiles and different goals. So you do have to kind of you got internalize that our work with your adviser to make sure the the gardens were giving because this is is General Information. You have to figure out how that works for you personally. I don't mean to put a disclaimer. Answer a question with a question but I do think this shows the nuances or the facets that go into financial decision making it needs to be paid attention to as well love it. Let's do another question. This was actually nuts and bolts for an accountant. So I think this is this not hard. This is from John Neighbor. He said hey any tips to offer for those of US tax laws harvesting to help avoid wash sales now. I didn't recognize until started telling this friend about what we were doing for our clients right now that the term tax laws harvesting is not just something that everyone knows so let me explain very easily what that is if you have an investment investment acts and it goes down ten percent. One of the things that you can do is you can sell. Investment acts and immediately go by Investment. Why assuming they're materially different and then when investment why goes up. You're in the exact same position theoretically depending on how investment but what you do is by selling that one investment what is down you get to lock in those losses. Which sounds counterintuitive. Until you think about how your tax on capital gains you have capital losses. They can offset capital gains that. You recognize either this year or in future years so loss harvesting does it change the investment strategy. It just changes your tax situation. Well there are some rules around tax laws harvesting and the one that he specifically asking about is the wash sale rule. I cared talk about. What a Washington. Ill is wash so just means that. If you bobby back something you're taking a loss on the government does make you. You have to offset some of the losses you took for the purchase. So I don't think it necessarily. I think you have to be aware of wash sale rules so that you don't you know completely sabotaged the loss harvesting but in relative terms a Lotta Times. The loss harvest is so big the Yes if there is a short term wash sell. I don't think it doesn't blow up the whole strategy you can just measure the materiality of that month's purchase compared to the washer taking but then also just be aware because there's so many opportunities going on right now this is like. I said this is not a United States problem. This is a global problem. So you can be strategic with how you what you're buying into on a systematic basis to. I mean what additional would you add to it? I thought that was great. The thing you can't do as you can't have apple stock and it's down and you want to sell it. You can't go buy apple stock again but if you had apple stock and it was down you wanted to go buy some competitors some different stock. That was different than you can do that. Well if you're an index or an ETF investor. You might think okay. Well can I go by the S. and P. Five hundred and sell it and go buy it again? That's probably going to be a wash. Obviously you want to seek the guidance and professional tax payer account so you just have to make sure that the thing that you're buying is materially different enough that it doesn't trigger those wash total market index you sold the S. and P. Five hundred and then bought a total market index. You you're you're allowing yourself to harvest the loss but also diversifying enough that you stay out of the the wash sale rules okay. Here's a great when this is from actually a friend of the show this from Darryl Crowe Darryl said hey beyond staying the course do you differentiate between those who are net buyers of investments for the foreseeable future and those who are in retirement and living off of their investment bombings? That's a great question. Here's a here's the reality of it and we've noticed this with our clients are younger clients. Look there mark. Volatility does reflect the market that we're in because if you're somebody who's in their thirties forties even early fifties. Your portfolio is more reflective on the fact that you're not going to need assets. Your Bridge is really a bridge over a puddle. Because you have no you can just step over the puddle. There's no reason to create a ton of conservative stuff in there so we are seeing clients that if you're younger you're aggressive just like the markets but a lot of you guys already financial mutant so you're trying to figure out how this is going to benefit you in the long-term since it's probably will create some value opportunities but darryl is exactly right that our older clients who are actually approaching retirement. The next five years or have already hit retirement. Now we replenish their cash flow and essentially create a retirement direct deposit for them. We already had this built into the plant. I mean 'cause that's why you need to do your planning on the front end so you don't have to be reactionary. The first thing I do when I get a concern call from a client is remind them if we add up their cash their fixed income and then any other conservative because we have a few other conservative type holdings we own Adam all up and then I divided by what their burn rate is for the last three the average of the last three years because every over three years you might have car purchases you have monthly expenses and usually I think it shocks clients like I had a phone call yesterday. I said you will be okay for the next sixteen years. I mean because she was concerned. We have your bridges so long that you're protected for sixteen years so let's not panic on the risk on asset because we need to give them time to recover. That's why you did create a bridge so yes jail you're right. We do for older clients or people in this is for you guys out there watching to if you're counting on these assets that's why we talk about. You have to have the bridge over the troubled waters when you're younger. That bridge looks more like you stepping over a puddle. You don't need much of a bridge all but when you know you're going to be in needing to live off these assets over the next eighteen months two years you need to have that money in some type of form you can get to because remember investing. This is something that I have to remind. People constantly don't put anything in the financial markets that you can't leave there for five to seven years. I think when markets make money year over year and we had one of the longest bull markets in history because it went from two thousand nine. Let it rest in. Peace and twenty twenty. That is a huge. That's over a decade that this bull market ran and sometimes when you get into long extended bull markets people. Just think this thing is like setting o'clock and you set the time or you forget and it's just gonNa grow like a cake in the oven. That's not the way financial markets work. They go up and down. So you need to respect the volatility and respect that the holding period on long term assets needs to be five to seven years. If you have something that you need money twelve months eighteen months a wedding like a down payment on a house. Don't get crazy. Don't get cute. That's where you get yourself in trouble. The next question asks now. This isn't a specific question. But I'm seeing it thematically throughout our chat so I'm just GonNa go ahead and kind of address it it's generalists idea about around like rebalancing how should I rebalance should I be thinking about rebalancing and the answer is yes this volatility does give us an opportunity to look at rebalancing what that means is making changes that we would have made otherwise but we could not because of tax circumstances cashflow circumstances whatever that may be. Here's what rebalancing does not look like if you're if you're in a thirty seventy portfolio before this thing started you do not need to rebalance to a seven thirty portfolio now. That's not the way. That rebalancing works your allocation should be fairly consistent over time what rebalancing does is it tweaks the slices of Pie Right. You've ever seen somebody like cut a pie. Like one person uses a knife and but someone else. My wife's uses a fork so then I had to come in with a knife to make sure the edges straight. What rebalancing allows you to do your portfolio's make sure that the edges are straight. You're not just digging in and changing the composition of the pie so I wanted to make sure I clarify because we speak in terms when you say thirty seventy you're talking about thirty percent in risk assets meaning like extra growth seventy percent off risk or shore -servative and you said going from thirty thirty seventy meaning thirty percent wrist. Seventy percent off to a seventy thirty seventy risk thirty off limits. That's yes that might be opportunistic but it also might not tie into your goals. You know your risk profile because remember. This could get worse before it gets better. We do not want to underplay that. There's a lot of crazy stuff going on. So that's why you're planning your bridge over. Troubled waters has to get you through whatever this economy. This pandemic throws your way. This was from it says AAC how but I'm sure I'm mispronouncing. That's probably like echo or something. Sorry a cow if pronounce it wrong. Should I rush to buy a house with such a low interest rate right now even if it means? I don't have a good down payment less than ten percent. I'm going to reframe this. Should I go make a huge gigantic life? Decision solely because interest rates are low. Right now I do think that that creates a lot of pressure that people put on themselves. And you think that this is the. Here's the first question now. Look this is this is this is some tea leaves but also requires a little bit of what's been happening over the last month. A An interesting thing happened over the last two to three weeks We all know mortgage rates are tied to the ten year Treasury. That's when you're when you're watching mortgage rates and you're trying to figure out if you're locking in or letting it ride. You're always watching the ten year treasury. Well we had something very unique happen that you don't see happen with the mortgage market is banks because the demand was already there because remember. This economy was humming. I mean we're getting jobs. Reports that are best in history. Everything's cranking a lot of houses are being built a lot of people in line to close on houses because we're quickly approaching spring win you know is usually a jumping housing market banks basically said when when ten year treasuries went to zero pretty much bank said you know what we're not going to honor that relationship that's always occurred. We'RE GONNA we've got enough business coming in thank you but no we're Nike thank you. We're we'RE NOT GONNA do that. So you actually saw interest rates on mortgages not go down with the ten year treasury. They actually spiked up. And here's what is this is why the Federal Reserve I do think. What does the government done is? They've announced that they're going to do. They've lowered interest rates. They dropped them to pretty much zero and then they also unleashed quantitative easing. Meaning that they are going to be putting a lot of liquidity into the markets that quantitative easing will hopefully help on the standpoint that we'll get back to more traditional where the ten year treasury does reflect is impacting. The market's a little bit because of the quantitative easing. But I wouldn't count completely that you're going to get a two and a half percent thirty year mortgage. I do think that we've had discussions with our bond. Traders is that there are going to come times where people just from a business risk. Don't WanNA carry that. But that's the history lesson now. Let's get to the action report. What is a house because it don't you have to be very careful making long-term big life changing decisions for something for a short term event that we're all experiencing right now in houses a type of transaction that I would say if you're not going to be in that house for just like an investment five to seven years what are you doing. I mean this is not something that if you think you're going to move in this house be out of it in three years just because there's an opportunity right now. You have to be very careful having reaction just like you would not want to react with how your portfolio looks. You don't WanNA react to be hit with your behavior now. If you know you're buying a house you have your keeping with the money guy. Rules of keeping housing expenses below twenty five percent and I would means a lot of benefits. The Homeownership Carter. Who's one of our principals here? He's building a brand new house. Bow just closed on a house in less than two months ago. So I mean there's a lot to home ownership in this. Maybe this works to your favor. Did you get a great long-term rate but just make sure the why matches up to your goals your risk profile and you know and all that stuff comes into play instead of just letting it be a knee jerk reaction buying a big long term holding. You'll find out it's very illiquid so it means the line up nicely okay all right here we go. This one is from family videos. That sounds like a nice. That's a nice name. Is it time to aggressively? Do Roth conversions for my pre age. Seventy to post retirement payment. Parents somebody answer that two ways. That's a great question question. Number one is doing aggressive. Roth conversions post-retirement pre seventy two a sound strategy. Yeah there's a lot of opportunity in there if you can play the income tax game it might make sense for you to accelerate income into the current years convert. Ira dollars into Roth dollars. Four One K. dollars into RAF dollars at relatively low tax brackets tax rates. Now so that at age seventy two. You're armed. These aren't as large essentially way to prepay the tax. Get to RMB's down. Is that a sound strategy. Yes does the current market environment current market volatility effector impact. That likely. Not because this is more of a tax planning discussion tax planning question than an investment market planning discussion. Now if your parents are someone who were forced into early retirement or their income changed significantly because the volatility. Then perhaps there's some opportunity but I would not start changing financial strategy solely because of volatility. Right now that is a sound strategy. But it doesn't need to be because of what's going on now is because it was a sound strategy a year ago or six months ago or three months ago and it will still be a sound strategy six months from now nine months from now a year from now I want. This isn't a different take. It's just adding a few more facets to to what needs to be considered I do we have a number of clients that are doing Roth. Conversion strategies because it's not uncommon. Somebody retires when they're fifty five years old. They're they go from a high income situation to a very low income situation so it makes sense to maximize lower tax rates with a roth convergence. Reggie exactly and that's the people that are doing that. We have clients every year doing roth conversions because and. I think this is the crux of the question or the theme. That's there is that now that we know markets are off twenty five to thirty percent. Is this a great Tom? While the values are down the value of that conversion is really powerful because the the principals get been compressed when you convert now Wada potential alike that process. Here's the only thing because I've had conversations with you. I've had a conversation with Carter. We do want to do that with clients and for people that they know without a doubt that we're walking in this much of a Roth conversion now the problem I see is we have a group of clients every year because of the affordable. Care Act. They're trying to keep their income below a threshold to make sure that they don't trigger. Medicare surcharges or even the ACA. The duck deduction their premiums. There's a lot of things at play. I would caution you and this is what Bo was getting to make sure it is a sound strategy while you have the principal. Compressed you can. You can get a lot of potential converted into a Roth where hopefully it will grow in a tax free fashioned in the future when we hit recovery. Just make sure you're not overdoing this way too early. And this tax year that you screw up at our have unintended consequences with your medicare premiums or your deductability. There's a lot of. There's a Lotta things the affordable care act. You have to pay Joe saying so. Just make sure you're doing you have to take into account all variables. This is wise financial. Planner I get so nervous about giving this type of specific advice is because typically a lot of variables that go into Roth conversion strategy so you would make the argument if you're someone who is entertaining doing this strategy or if you're someone who is thinking about encouraging your parents to do this sort of strategy perhaps it makes sense to seek the guidance of a professional to make sure you are accounting for all of those variables slowly. The taxability is social security. A lot of people. They get so excited. That they're in these low tax brackets. They do the Roth conversions and then they find out. Oh my goodness now. My social security is taxed at eighty. Five percent Medicare have gone up the affordable care. Act Premiums are no longer deductible all that stuff needs to be taken to an accountant to a cohesive plan but yes the nature of the question is this is an incredible time to be looking at Roth conversions. Just make sure if no blind spots that are going to derail this awesome opportunity so here. Here's the last one and this is just one. That's kind of kind of real so it's kind of an interesting interesting one to land with because we know that we are uncertain times and we don't know how we don't know how this is going to go. We don't know how long it's GonNa go. We really don't know the true financial implications of it yet right. So we're staying abreast of that. So this guys. Hey How would you recommend? Someone's Investment Strategy Change if they get laid off during this time right and the engine. That question is sometimes life throws US curve balls. That aren't expected like right now. We are in a Black Swan Market Environment. Economy event but those sorts of things happen in our lives as well. Sometimes things happen. That are outside of our control that we just can't plan for the unknown unknowns. The things that you can do is if you are someone who's in an industry that perhaps is getting very hard getting hit very hard by what's going on right now economically or you're someone who's concerned that maybe my job is at risk now. Probably is that time that you do need to be shoring up? Even additional cash reserves where. The normal three to six months might make sense in normal times. Maybe now you do have to increase that and perhaps yeah you might be walking away from some investment opportunity if you have to stop all that cash instead of putting into investments but at the end of the day if you're in that sort of circumstance you have to make sure that you follow the order of operations the right way and other top issue that order is make sure you have appropriate mercy reserves will very unique times like this. You're appropriate emergency reserve. Might be different than it is at other times. It goes back to you. You said it in financial order of operations respecting the flu. You GotTa have that that bridge over troubled waters you. GotTa have the cash reserves. You gotTA HAVE THE OFF RISK ASSETS. That will get you through this so if you are one of those people that is a man. I feel for you. We say prayers for you because I think that is the that is the unfortunate thing that will come out of this. I think I am and I'm I'm hopeful that it will be short term because I think this feels more like a natural disaster. It's not like there's a systemic issue that derailed this economy so hopefully. It's a very short term thing but I would encourage everybody be proactive with your finances. Just like you or figuring out what you're GONNA do for your family to to keep them safe to keep them from the corona virus. You also want to be doing that with your financial life. And if you know you're in an industry that could be impacted Do the steps now look into it and Don't Overcut I. Would you know because I think that this is a tom and I think it just happens? Naturally I had a few more phone calls a conscious they say. What should I do this? You know? And and a lot of the big purchases some of the vacation so much stuff all the discretionary control. You have you're trying to get your footprint to be as small as possible so that when you then do the measurement of what you need to make it through this this this dark period. You're not having to completely cut out all of your growth assets but you are being realistic with yourself to make sure you once again. Have that bridge over troubled waters to get you to safer ground. Here's our committee you guys. We're going to stay on top of this thing we're going to keep monitoring or keep washing it right now. We're consuming as much information as we can so that we can shuffle through it and provided you guys great insight if you're out there and you have not subscribed to the youtube channel. That's going to be the best way to stay in touch with us so that we can let you know when new videos come out when this livestream was a plan we decided. Hey we're vacations got cancelled. We probably GONNA be in the. We ought to talk to the people if you're subscribed if you ring the bell to get notifications that's how you're going to stay on top of the information to share with you if you haven't gone out to our website go to money. Guide DOT COM. Go to a resource page. We have tons of resources out there that you can use even right now to show you how powerful your money can be things to think about from a tax perspective. What millionaires look like all kinds of resources that you can use to reset and rebound you in some of these uncertain times and I know look everybody here is getting an education in. What is it looked like to go through a volatile market and this is something that will serve you well for the rest of your life but just will be your resource guys. We'RE GONNA keep coming to you as we get more legislation as we get more updates. We'll try to protect you. But in the meantime I'm telling you go pay attention to the daily press releases. Protect your family from a health perspective. I understand there's a lot of nervousness out there I I get that so take care of your family. We WanNa keep our older citizens especially people who have underlying health conditions but that does not necessarily mean that you have to do an apple cart turnover on your entire financial life because reactionary reacting during bad times sometimes can lead to some long term negative consequences. I don't want you to make a permanent decision on a short term problem that derails your long term solution so definitely pay attention to what's going on tune in exactly what Bowe said go to money dot com. Go to youtube subscribe you know? Give us your email address. We'll keep you up to date on what's going on and we just care about you guys. I will tell you that this is. This is not likely I mean. This is one of those things we've had two. We've always known that they were going to there was going to be a downturn. Didn't know it was going to be a Black Swan of cove. Nineteen that it would be something that would put the entire world in upheaval. But we'll make it through this if you think back through mankind and think about all the horrible things that have gone on between look this is not the plague but a mankind has survived the plague. This is not a terrorist attack where we have people just blowing up stuff but we'll make it through this and it's just like I do feel like the world will get through this. We'll look back. They'll write a lot of books. They'll write a lot of articles on it. But you just need to be equipped to handle this yourself. We're GONNA continue to be a resource. We care for you tremendously. We WanNA be your partner to get you through this so you feel like you can cut through the noise and know the best things you can do for your family. I'm your host Brian Preston. Mr Bo Hansen money team. We're going to be there for you. The money guy show hosted by Bryant Preston about wealth management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations abound wealth management does not render or offer to render personalized investment or tax advice through the money guys show the information provided for informational purposes only and does not constitute financial tax investment or legal advice.