Joey Loss 0:01

All right, welcome back to another episode of Market Chatter. I'm Joey Loss. I'm Adam Van Wie and we're here to Listeners know that this Market Chatter segment is just about talking about all the things that happen in the markets every couple weeks and catching people up on what they need to know. What's driving what we're seeing every day in the markets. And we recorded two weeks ago and there's been no shortage of action. Particularly today we're seeing some headline worthy stuff. But for listeners, what we'll get into. We got the Mag 7 sleeping while small companies are taking their stand. So far this year we've got some job market updates. We've got action on Silver, Gold and the US Dollar index. We've got a Fed rate decision that just happened and as always we'll have some general commentary at the end. But Adam, I thought we'd start today with the idea or the claim that smaller is better. So far this year in US equities, smaller is better.

Adam Van Wie 0:58

I don't know if it's better but it's definitely been performing quite well. So you can make a real debate about what is better. In fact, the large cap companies have been doing just fine but their stock price action hasn't been quite matching the performance.

Joey Loss 1:15

Yeah, I was looking at the mags, so there's an ETF that just owns the Mag 7. It is literally at 0.00 as of this moment right before recording.

Adam Van Wie 1:25

Yeah, I'm sure the drop, big drop in Microsoft this week didn't help that at all. Nvidia has been, it's actually upper in the 1/100 90 today which is on the high end of its recent range and it was actually up today despite the market being down just slightly. But so it's, you know the, the price action in the, in the mag 7 has, has just not been exciting recently. Every, there's been a lot of other areas that have been though.

Joey Loss 1:54

Yeah. And it's really since like what, like late October, the Mag 7's been kind of sleepy.

Adam Van Wie 1:58

Yeah, I think that's about the same time the, the QS hit a, hit a all time high the last time that happened as well. So tech just hasn't been the, the hot trade.

Joey Loss 2:10

Yeah. Which is weird because we've got four earnings reports so far of the Mag Sevens for this earnings season. All four were beats.

Adam Van Wie 2:19

Yeah. And so you would think the complete opposite. But maybe they didn't beat by enough. I, I don't know.

Joey Loss 2:26

Yeah, maybe people are just a little. Who knows? I I, it seems like the sentiment is things have been really good for so long when it comes to the Mag 7. Let's just cool off for a second and let everything else catch up. And thank God it looks like everything else is doing that.

Adam Van Wie 2:43

Yeah, it really is. And, and that's refreshing to see as a, as an asset manager. I can't stand it when the seven stocks are driving the whole market and making things look rosy when it isn't. That's a, that's a nightmare scenario for us when we see the action like, like we've seen over the last quarter. That's very refreshing to me.

Joey Loss 3:06

Yeah. And so to paint a picture of where we're at, emerging markets are currently leading the way up 8.33% for the year. Next is small caps. So the Russell 2000 index at 5.51%.

Joey Loss 3:19

Next we have developed international 4.88%. We've got the NASDAQ as a whole, not just the Mag 7 at 2.03%, the Dow at 1.5 and the S&P just behind it at 1.53. And one of the things I was talking about with your dad last weekend on the radio show is if you look at the S and p, it's up 1.5. If you look at the S&P 500, it's up 1.5. If you look at the S&p 100, it's also almost flat. So, so it's the bottom S&P 400 stocks that are pulling the weight right now as far as creating some performance in that sector for this year.

Adam Van Wie 3:57

Great. I love it. Another area that's been pretty good is dividend stocks. Value stocks haven't really seen a lot out of them in the last year, but recently been getting 52 week high alerts on our value fund. So that's always a good sign as well.

Joey Loss 4:15

Yeah, I know our friends at Dimensional are like thinking heavens, right now everything that they talk about is working right at this moment and it hasn't for a while.

Adam Van Wie 4:24

Not in a long time. Yeah.

Joey Loss 4:27

So I'll dig into some of these. Let's look at some of these S, P Or sorry, the Mag 7 earnings so far we've got some data on the report. So Meta had a beat. Revenue was at 59.9 billion. That's up 24 year over year. $8.88 earnings per share. And it says Zuckerberg is going all in with 2026 capex guidance of about 115 to 135 billion for AI the ads business is humming, but Reality labs still lost $6 billion this quarter. And that storyline is really not that different than the rest of what I'm going to read you so far. I mean, it's all AI. It's still all AI.

Adam Van Wie 5:06

Yeah. And I think Facebook's getting somewhat rewarded, Meta, because they're investing in AI and, and they're seeing some return on it, but some of the other stocks haven't really seen that return from their investment. And that is really spooking investors. But also that's a great sign because when investors are cautious about things like that, that means we're not in a bubble. We are not in an AI bubble. When people are, are hesitant to buy or selling because AI isn't generating sufficient revenue. That's opposite of bubble behavior.

Joey Loss 5:41

Yeah, I think that's fair. And for listeners, if you missed previous market chatters, we've talked about the overlay of this period since ChatGPT released in late 22. If you overlay stock performance from that period to now over, what was it, 1994 through 1999, let's say the release.

Adam Van Wie 6:03

Of the Netscape browser was the beginning of all of that.

Joey Loss 6:06

The ups and downs and turns are eerily similar. And there's a bit of superstition out there that, you know, we're going to meet a similar end because of how similar they look. I don't think that that really works. We've talked about how the companies back then, pets.com, they had no revenue. This is totally different.

Adam Van Wie 6:24

No, they literally just slapped a.com on the back of their name and suddenly they were worth $100 million. It was insane.

Joey Loss 6:31

Yeah. And so. And there was no logistical infrastructure to support the sales that were assumed by that $100 million.

Adam Van Wie 6:39

None. Absolutely not. No warehouses, no transportation system, no software to. To even build out that. That warehouse. I mean, there was nothing.

Joey Loss 6:48

Yeah. So it's a different period. Does that mean we won't see market declines? Of course not. I mean, those are going to happen. But I think that comparison is getting a little old at this point. But it is interesting to watch the trend, I guess, over time. And if that trend is true, we've got a lot more up to go before the precipitous decline that was at.

Adam Van Wie 7:07

The end of that, the real bubble in all of that. If you compare the two periods, we, we wouldn't even be at the bubble part of the, of that increase in the market that happened about a year from now. And, and it looked like the hockey stick chart. It was Just, it was really insane. I mean, you could put money in anything and make money during that last year. Yeah.

Joey Loss 7:32

So Looking at Apple revenue, 143.8 billion. That's a 15.7% increase year over year. Earnings per share, $2.84. The iPhone 17 cycle is real. Crucially, services just overtook iPhone as the largest contributor to gross profit for the first time ever, which is interesting. So that $3 fee that we all pay nine times a month for the devices you don't even know if you still have, but you're afraid to turn them off, is now more valuable to.

Adam Van Wie 7:59

Them because there's, I mean, what is, what are, what are the costs associated with that for Apple?

Joey Loss 8:05

Almost business model.

Adam Van Wie 8:07

Yeah, it really is. They're charging you for nothing. I mean, it's, it's an important nothing, but it's nothing.

Joey Loss 8:13

That reminds me of Starbucks has one of the best things going right now I've ever seen. And a lot of people copied them. And that is when you load cash to your account. It's so dumb. They have billions on the balance sheet of Money that's earning 0% interest on my phone, you know, or my wife's phone. And. But they can earn interest on it. It's real cash to them. And people are dying with balances.

Adam Van Wie 8:21

It's so dumb. Why?

Adam Van Wie 8:37

Yeah, it's completely. It's just ridiculous. I don't even. It's, it's great for them. They, they really nailed it on the business model, but it's so stupid.

Joey Loss 8:47

So the footnote there is, you know, add $20 at a time. Don't put 300 bucks in there.

Adam Van Wie 8:51

Right.

Joey Loss 8:52

They love it. Microsoft revenue, 81.3 billion, up 17% year over year. Earnings per share, $5.16. Azure growth is steady at 39%. That's absurd. Cloud revenue topped $50 billion for the first time. However, the stock struggled because investors are twitchy about the high costs of AI infrastructure. There it is again.

Adam Van Wie 9:15

Yeah, exactly. And they lost like 400 billion in market cap on the earning after that earnings announcement, which was a great announce. Yeah. Crazy how badly they got punished on that day.

Joey Loss 9:29

The last report that we have so far for this earnings season is Tesla, and That is revenue. 24.9 billion earnings per share. 50 cents. That's a beat. A massive turnaround in sentiment. Okay, that's interesting. Gross margins hit 20.1%, a two year high. Elon is pivoting the narrative away from cars and toward optimus and autonomous fleets. And yeah, it's been like since that trillion dollar pay package discussion, all he's talking about is robots.

Adam Van Wie 9:59

Yeah.

Joey Loss 9:59

Doesn't really want to talk about anything else.

Adam Van Wie 10:01

No. And the cars aren't selling like they were and everyone knows it. And that's just is what it is. I mean, I guess the whole electric market is somewhat down, but really specifically Tesla, I'd be pivoting too, so good move.

Joey Loss 10:16

Yeah. So upcoming we've got Alphabet, Amazon and Nvidia. Alphabet will be February 4th. Analysts are looking for earnings per share around $2.58. Search remains the fortress of Google's business, but cloud growth needs to match Microsoft or Amazon to keep the stock moving. That makes sense. I mean the cloud growth in both of those companies is absurd. And it's such a good margin business.

Adam Van Wie 10:46

It is, it is, it's like 60% or so. Definitely. Like I said, they're selling you almost nothing. It's. Yeah. Again, it's a very important nothing, but it's, it's a great business model for them. You just have to wonder if those margins will get squeezed over time as more, more and more capacity becomes available.

Joey Loss 10:48

It's made up.

Joey Loss 11:06

Yeah. For Amazon, expected a day or two later, February 5th or 6th, focus will be on Amazon Web Services and whether the heavy AI capex is starting to cannibalize their famous free cash flow. Basically.

Adam Van Wie 11:21

Exactly. This is the, the theme of this earnings season is are companies getting ROI on the massive infrastructure spends that the capex that they're, that they're putting aside or putting it to use and if they're not, they are going to get hammered by the market, which is kind of silly.

Joey Loss 11:42

I mean it was pretty predictable that this moment would come six months ago because everyone was just excited that spending was happening. And of course Nvidia is getting that real profit now because all of this AI infrastructure build out basically goes to them. For the chips. So that's real. But

Adam Van Wie 11:56

Yeah.

Joey Loss 12:01

the rest of the Mag 7 performed on the news and it's like, okay, we knew it would take time and what, six, six or nine months has passed and people are now impatient.

Adam Van Wie 12:11

Yeah. Basically projects don't pay back in six to nine months. That's not realistic. So you need to have a much longer period over which that is judged. And, but that's how the market works. Sometimes it thinks long term, sometimes it can't see past six months out. Yeah.

Joey Loss 12:30

And so Nvidia, Nvidia will be interesting. Usually reports later in February, expect the market to hold its breath. They are still the picks and shovels provider for everything. Mentioned above. So basically what we just said, if there's building, they're getting paid.

Adam Van Wie 12:45

Yeah. I can't imagine that not being a good report. I mean, it's possible, but there's nothing going on to indicate that they would not have another record quarter.

Joey Loss 12:56

The only thing I could see is, and it would surprise me is these other semiconductor companies are starting to perform quite well. I mean, we've got amd, you've got Taiwan Semiconductor, they've been singing better growth for the last couple months than Nvidia itself has for sure.

Adam Van Wie 13:14

I think part of that is just that Nvidia is basically at capacity and they're adding it, but they can't keep up with demand. So where else are, where else are buyers going to go?

Joey Loss 13:23

Yeah, fair.

Adam Van Wie 13:26

All right.

Joey Loss 13:27

Anything else on those before we move on to the market? Job market?

Adam Van Wie 13:31

No, I think, I think that the, the Mag 7, I, I hope this trade stays the way it is. I, I would love to see them just be steady, 0% and the market still go up. I, I, that's, that's an ideal situation for the first half of the year. To me.

Joey Loss 13:45

Yeah, honestly, for me, a great storyline this year would be, of course it'd be cool if the Max 7 goes up, but if they don't and the rest of the market just performs humbly but solidly, to me that feels like

Joey Loss 13:59

almost a corrective year of sorts because of how high the Mag 7 has dragged us up over the last several years. At the rest of the market, if the water rises for all those boats and the Mag 7 just touches water for the first time, it's kind of a good year.

Adam Van Wie 14:15

It's great. And especially when the things like international and small caps that have underperformed for 15 years are the ones leading the market. That's fantastic.

Joey Loss 14:27

Yep. All right. Job market. The US labor market has entered a bizarre frozen state. Hiring has slowed to just 20 to 40k jobs per month, levels that historically would have signaled a recession. But unemployment also remains at record low. So we're basically in a low hire low fire situation. And based on bank reports from places like JP Morgan Chase, who reported a couple weeks ago, consumers seem to be okay. But if you ask a sentiment report, yeah, they're not. There's a lot of mixed information out there. People feel differently than objective data says they are doing, for sure.

Adam Van Wie 15:05

And this is a big disconnect that's been happening for the last year or so. The sentiment is just in the tank. Everyone thinks we're in a recession. We're not by any measure, we're not in a recession.

Adam Van Wie 15:18

And yeah, the job market is actually probably closer to pre Covid norms than it has been at any time in the last five years. And it is kind of stagnant, I guess, but at almost. Well, at what has historically been labeled full employment. So is that a bad thing? I don't think it is. We are seeing layoffs here and there. A lot of that is just like trimming the fat, though. A lot of corporations got bloated during COVID because they were just scrambling to hire anyone they could. And there just wasn't a lot of good options out there. A lot of people weren't looking for work. A lot of people had withdrawn from the workforce and so taking people that weren't necessarily qualified to do jobs and trying to train them to do a job. And maybe it worked out, maybe it didn't. I think a lot of those that didn't are now being in the. In those layoff reports and they're not excessive. It's just, you know, it's a small percentage of people here and there. But we do see more of that. I would not be surprised.

Joey Loss 16:22

And some of these companies are so big that

Joey Loss 16:26

I'm not gonna say a reasonable layoff, but like, I don't know, a predictable layoff that happens periodically. Sounds like a massive number. Amazon, it was what, 15,000 jobs? Yeah, it sounds like a huge number. It's 3% for Amazon, 3% of their corporate office.

Adam Van Wie 16:41

Yeah, it's so small because they have so many people. Yeah, so those kind of things. And in fact, in a normal environment, they're probably doing that once a year, 15,000 people just to. Because they. They have 15,000 excess people not. Not producing as much as they should. So it's. To me, that's just a normal job environment. Of course, it doesn't sound great compared to the numbers that we got used to during the COVID The. Once we had laid off half the world and then started hiring them back, those numbers got outrageously large and they la. That lasted a.

Adam Van Wie 17:20

So now we're seeing smaller numbers and it feels disappointing, but honestly, it's still. Still showing that the economy is growing and the employment rate, unemployment rate is staying low. So it's kind of. It's not really a bad thing.

Joey Loss 17:34

Yeah. Last week when we did the radio, we looked at inflation and it was the last CPI report. I think it said 2.3, 2.4 year over year. And then

Joey Loss 17:45

truflation, which is our favorite inflation tool. It's a little bit More up to date says 1.7, which is both are healthy.

Adam Van Wie 17:55

Definitely. Yeah.

Adam Van Wie 17:58

I can't understand why, and I've said this on our last few podcasts, but it still feels like the media is so fixated on how high inflation is right now. It's below the long term historic average of 3%. It's not high. I don't understand why they, they keep harping on this. It's just not factual.

Joey Loss 18:19

I think the, I think housing just bothers, you know, it's so irrationally disproportionate to their sense of whether things are fair or not fair. And obviously housing is a tremendously important expense. But until we have more, let's talk about housing for a second because this ties right into that. So obviously rates, rates have come down about a percent in the last year. I think they were north of 7 a year ago and now we're like 6.06 as of Saturday. And this is for a 30 year mortgage that helps. Home prices have basically been what, flat down a little bit?

Adam Van Wie 18:59

Yeah, I mean there hasn't been tremendous downward pressure on, on houses. Now the condo market in Florida probably much more so for different reasons. But the, but the house housing market has been pretty resilient in pricing.

Joey Loss 19:19

And really like, we just keep saying the same thing and it's not our idea, it's what the data says. And that is there won't be a long term solution until we fix supply. And the reason that supply is all messed up is because when Covid happened and people looked around, all the builders were like, okay, this is crazy, we should stop. And what happened to demand? So supply fell as a result of that, the pace of supply. And then at the same time, everybody suddenly found their housing situation more important than they ever had because they're spending so much time there. And the gap that emerged from that has continued to exist because once supply started picking up again, it just could never catch up to that equilibrium point. And that has a lot to do with why prices went up. And until we fix this 3 to 4 million house supply issue, I think we're not going to have a chance at the type of market that people are looking for. With that said, I think there's other footnotes. We've talked about like, people's expectations for housing. I don't like these comparisons of like, oh, my grandparents bought a house for $3,000. It's like, you don't want that kitchen, I promise, you don't want that kitchen.

Adam Van Wie 20:28

Don't. And you don't want your Your kids, you know, stacked three to a room like they were back in the old 3 2. And you had a seven person family living there. It's just, you know, the house was 1200 square feet. The house you want is 2700 square feet. So it's just not an apples to apples comparison.

Joey Loss 20:48

With that said, yeah, I think it's, that's a big piece. I think that's a very big piece that isn't talked about because it's not cool to say like, well, it's actually like what you expect is kind of making this happen. What media company is going to benefit from saying, well, it's actually your fault basically. I want a nice house. You know, you, you want a nice.

Adam Van Wie 21:08

House, you have to think about too, the, the size of the city that you are buying in compared to the size of the city your parents were buying in. It just was. Jacksonville was, I don't know, half that size back then. And there wasn't nearly the demand for because of the amount of people. It's a much larger city now. I think that plays into it. My grandparents lived in small town, rural Wiscons, so of course they bought their house for nothing because it was just a small town. There wasn't a million people clamoring for the same assets. So I think there's just so much that goes into those anecdotal stories about we bought this for the X and our grandparents bought it for 10x less.

Joey Loss 21:54

Yep. Yep. So hopefully supply can help. I mean, the administration and other congressional discussions have pointed at attempts to

Joey Loss 22:09

kind of put band aids on the situation. You know, like, let's just push rates down as hard as we can. Obviously that's, that can help and probably an intermediate impact way. But it's not a real sword with.

Adam Van Wie 22:22

Rates though, because the, the more rates go down, the more pricing is going to stay high. So it's, that's not, I'm not sure that that's a solution. It makes your mortgage more affordable for sure, but it's certainly not going help on the pricing side.

Joey Loss 22:36

Yeah, makes the mortgage more affordable. If everyone agrees never to raise the price of their home, which I've never met a homeowner who's okay with that.

Adam Van Wie 22:43

Exactly.

Joey Loss 22:44

People have the opposite problem. They think it's worth, myself included, we just sold a home and I basically had to get beat down emotionally, personally, to the point where I was like, okay, this is this, I just want to be done, like, make it stop.

Adam Van Wie 22:59

That's another thing people hate to hear. I, I, and I say it all the time. But the market's going to tell you what your house is worth. It's not the, not the realtor. It's not what you, what your neighbor got. The market will tell you. You'll either get showings and offers or you won't. And that's the market speaking to you. Yeah.

Joey Loss 23:17

Market is a. Doesn't care about your feelings very much.

Adam Van Wie 23:21

Does not at all.

Joey Loss 23:23

All right, moving on to metals. So

Joey Loss 23:28

if you've been watching markets at all, obviously gold and silver have been just on an absolute tear every. I don't know, what percentage of client meetings do you think people are saying so gold and silver?

Adam Van Wie 23:40

90, probably.

Joey Loss 23:42

Yep. And these, including people who really aren't that investment interested. You know, we have a handful of clients who are super interested in investments. They're going to know whatever's performing. And then you have an equal or bigger size group of clients that just don't really care what's happening as long as the big picture is okay. And even those folks are asking.

Adam Van Wie 24:02

Yeah, it's been a pretty crazy run and I've been selling a lot of it. Well, those prices have been increasing because I knew a day like today would be coming. And what we're seeing today is silver down 22%. And that is quite a haircut. Even if you've ridden it up 50% in the last quarter, that's still a pretty big haircut. So I just. That happens. When you see something move up that fast, it can fall even faster. And that's what we're seeing today.

Joey Loss 24:37

Yeah. And percents are misleading. Right. So if it grew 50%, how much does it have to fall and go back to that original number? Yeah, 33%. Right. So. So 22% fall is significant. It's not like you got to fall 100% to get back to where you were. That's zero, my friend.

Adam Van Wie 24:54

Yeah, that's right. The math doesn't, doesn't. It's not equal on the way up and the way down. Yeah.

Joey Loss 25:03

And it looks like the US Dollar has been healthier this week. Is that what you're saying?

Adam Van Wie 25:09

I haven't looked at the dollar this week. It's been soft recently, but I, I didn't look this week.

Joey Loss 25:15

So what? When I was looking into why is this happening now? It's like silver just kind of trembled, fell below the $110 threshold. And then it seems like Alo's, you know, algorithmic trading just went off. And basically everybody's got a stop loss. If you have any sense at this point because nobody wants to ride it all the way down. And what it looks like when everybody has a stop loss is today.

Adam Van Wie 25:27

Right.

Adam Van Wie 25:38

Yeah, it's, it's ugly today. I mean the whole market's ugly today. We've got the, the Russell, the small cap index is down 2%, the Nasdaq's off one and a half, the Dow is off 1.2 and the S&P off one. So it's, it's really ugly.

Joey Loss 25:53

Gold fell a little bit less. It's down like 5 or 8%.

Joey Loss 26:01

But those, those never really move in tandem. Also, silver has grown way more recently.

Adam Van Wie 26:06

Than gold has, so substantially more.

Joey Loss 26:09

It's not that ridiculous to me that silver would have felt way more painful.

Joey Loss 26:21

Anything else on that? Looking at the rest of my notes?

Adam Van Wie 26:24

No, just remember it's just one day. It's not, it's not, it's not a trend even at this point. It's just a really ugly day people got. But you kind of knew it was coming. I would not be surprised to see a 10% correction in the first half of this year and then a really good year following it. That, that actually would not surprise me in the slightest. I think that the market's high. A 10 correction would knock those PE ratios down, look, make things much more attractive. Better entry points, better buying opportunities. I, I could make a really good case for that happening.

Joey Loss 27:05

Yeah, I agree with that.

Joey Loss 27:08

And the conversation we had, I mean it's, it's honestly hard to have advisor conversations with clients when something like the gold silver thing's happening. Because people hate missing out when you're on the front side of it. They hate missing out. It is so painful. But then we know, because we've seen it before, often from that particular client, that the pain of losing money is greater, but they forget it. And with speculative assets, you just can't. There's no math that I can do that says, oh, here's why we're going to keep holding it.

Adam Van Wie 27:43

Yeah,

Adam Van Wie 27:45

you know what's going to happen.

Adam Van Wie 27:48

Look at any commodity throughout the history of time and you can see this happen. From the tulips in Europe to the gold. Last time it did this, look, check out what happened in, I think it was 2007 to gold and you'll just see there's a pattern. It happens in oil every year. You see the price go up and the price go down based on demand. So this is just the nature of commodities are, are cyclical. And seeing a run up in silver like that, it just doesn't make Any sense it's going to come back down.

Joey Loss 28:22

This happened with land. There was a Mississippi land bubble in the 18th century that was the same thing. It was like that one was pretty extreme. I don't know if I could say it's the same thing. I mean, silver and gold do this periodically and then. But to your point that the fall is always precipitous and then it's quiet for a long time and then it roars again and then it goes back. But yeah, I think, like, what's the saying? It's better to be lucky than smart. And so if you ride it and you get out, like, good on you. But I think the hard thing about investing is that doesn't always mean it was a good decision. You just got lucky. And that can happen.

Adam Van Wie 29:00

I mean, there was a lot of people that got lucky with buying Nvidia too, or GameStop even back in the day. But a lot of people also lost a lot of money on GameStop when it came back down. So it's, you can get lucky, but if you get greedy, that luck runs out pretty quick.

Joey Loss 29:07

Yeah.

Joey Loss 29:20

So what thoughts do you have on like now is a moment in time. Assuming the listeners have, you know, the bulk of their money in some kind of diversified portfolio, let's say they said it a year or two ago, haven't made any changes. They just let it ride. What are your thoughts on rebalancing? How would you decide that?

Adam Van Wie 29:38

I think it's so it's been an interesting year because the rebalancing trade hasn't been necessary for everyone. In some cases it has if you have international exposure that might need to be trimmed because it did so well last year. Obviously gold and silver you need to should have sold yesterday. That would have been the move. But. But stocks did well and bonds did well last year. So it wouldn't surprise me if you took a look at your portfolio. And it wasn't. The drift wasn't too bad. You know, you did see stocks outperform bonds, but bonds had about an 8% year. So if you did 12 to 16% on your equity side, you might be a little bit out of balance, but not tremendously.

Joey Loss 30:29

Yeah, I agree. 25 wasn't as bad as 24 was for creating unbalance.

Adam Van Wie 30:34

24 and 23 were. The bond market did not perform that well. It was flat to up, I don't know, 4 or 5% maybe in 24. And so you definitely saw much more drift in those years than we did last year. Yeah.

Joey Loss 30:49

And the drift was into large cap stocks, particularly Bank 7 and

Joey Loss 30:56

away from International just because International was still taking a nap. And then last, last year, 25, it wasn't.

Adam Van Wie 31:04

Yeah. So if you did a rebalance at the end of 24 and sold large cap and put it into International and your bond funds, it probably worked out really well for you in 25. Yeah.

Joey Loss 31:17

Cool. Any other closing thoughts? I think we covered a good bit.

Adam Van Wie 31:21

No. Again, I just wouldn't be surprised if we saw

Adam Van Wie 31:26

a little bit of turmoil in the first quarter. Things have gotten really high. They've been really good for really a long time and I wouldn't worry too much about it, honestly. The market takes a 10% drop about every year and it was almost a year ago that we saw it happen. So don't be surprised if that happens. Use it as a buying opportunity. Use it as a rebalancing opportunity to get into what you wanted to get into and, and then look for the market to rebound in the rest of the year because the economy is actually doing quite well.

Joey Loss 31:58

Yeah, I agree with that. Yeah. People, it's so easy to forget. I mean, the good period between a correction and the next is just long enough for us to forget that this is probably one of the most normal things that happens. We go through what, 200 media cycles between those two events, 12 months apart, and then suddenly this one's unlike the others. Even though it's happened virtually every year for the last hundred years.

Adam Van Wie 32:26

And these types of things shake out, a lot of the people who are very speculative traders and are using margin and doing things that are buying risky assets and they get washed out and then that's when the long term investors get rewarded.

Joey Loss 32:43

Yeah, agreed. Cool. Well, we'll touch base. I think our next one is in three weeks, which gives us plenty of time to gather new content. So talk to you then.

Adam Van Wie 32:53

Sounds good. Thanks for having me on.

Joey Loss 32:55

Thanks, Adam.