What Dentists Want to Know — Listener Q&A #15 – Episode 235

How should you construct your portfolio to protect yourself for the future?

On this episode of the Dentist Money™ Show, Reese and Ryan discuss two listener questions about the future of the stock market. Changing market conditions have many people wondering if they should rethink what’s included in their investment portfolios. 

Is a concentrated portfolio of stocks that have been beaten up—like travel, hospitality, energy—the right spot for your hard earned dollars? Or, should you just stick to a globally diversified portfolio? Reese and Ryan offer their guidance backed by some fascinating details and stories.

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Podcast Transcript

Ryan Isaac:
Hey, everybody. Welcome to the Dentist Money Show. Thanks for joining us today. Have you ever wondered if it’s still a safe time to invest in the stock market, especially given all the things going on with COVID-19, the economic shutdown and all the new government debt? Given everything that we’ve experienced with COVID-19, do you have questions about how you should be investing your portfolio?

Ryan Isaac:
Have you wondered what stocks you should be investing in post-COVID-19 in order to maximize your return for the future? Do you wonder if you should concentrate your portfolio into the stocks that have been beaten up the most over the last few months during COVID-19, or if you should have a globally diversified portfolio and what the difference would be?

Ryan Isaac:
Join us on the show today as Reese and I explore these very important questions that have a big impact on your life today and your financial future. Do you have any questions for us go to DentistAdvisors.com, click on the book free consultation button, and chat with one of our knowledgeable friendly advisors> go to DentistAdvisors.com/group and post one of your question that we will answer personally or on the show. Thanks again for joining us. Enjoy the show

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now, here’s your host, Reese Harper.

Reese Harper:
Welcome to the Dentist Money Show where we help dentists make smart financial decisions. I’m your host Reese Harper here with my trusty old cohost, Sir Ryan Issac.

Ryan Isaac:
And we’re back with another Q&A episode. The people have demanded that we answer their questions and we shall-

Reese Harper:
I love it.

Ryan Isaac:
… answer with answers

Reese Harper:
It’s a beautiful and we’re ready to get right into adding value for our audience. We know that they are anxious and they want their answers. We’re going to give them to them. Let’s serve it up.

Ryan Isaac:
All right. So-

Reese Harper:
What’s on the dock today?

Ryan Isaac:
Yes, well it’s kind of a twist on the Q&A because the first question is actually coming from a guy named Reese Harper.

Reese Harper:
Oh really?

Ryan Isaac:
You might know him.

Reese Harper:
Dude, I didn’t even know this guy.

Ryan Isaac:
You might know him. You might this guy, also known as [Haas 00:02:01]-

Reese Harper:
I love it when I ask myself questions.

Ryan Isaac:
… also known as. Yeah. First of all, a lot of these questions that we get, by the way, they come from our Facebook group, which is DentistAdvisors.com/group, and people go in there and post. There’s questions in there as we’re speaking right now that just got posted about cash, and business accounts, and people asking about real estate and all kinds of cool stuff.

Ryan Isaac:
So you posted an article. This was, if someone’s listening in the future. We’re at the end of May, 2020 coming out of COVID like a slow crawl. You posted this on May 19th. There was a Wall Street Journal article about some of the top government leaders discussing and debating what to do with the economy, how to stimulate it, how to help it recover, how to help the people, how to help businesses.

Ryan Isaac:
But there were some really a lot of conversations that were really on both sides of the table, having a hard time coming to agreement on what to do, what’s best for the country after we’ve just gone through what we went through? So you posted this article and you posed this question, and this is what we’re going to start with. The question’s like, “Why did you post this? What were you thinking when you posted this and what do you want people to take from this?

Ryan Isaac:
Your question you posted is, “Why is it wise to diversify and own your share of the entire global market?” That was the question you did. You had a follow-up sentence. You want me to read that really fast? Give it some context? The follow-up sentence was, “Because even people with actual levers to pull, power of Mnuchin, can’t agree on the measures to be taken.” Which was the point of the article.

Ryan Isaac:
The question again was, “Why is it wise to diversify and own your share of the entire global market?” Let’s just start with why did you post that? What were you thinking about that article and what did that spur in your mind when you posted it?

Reese Harper:
Well, for those of you who aren’t as dialed into the old political scene, the Secretary of the Treasury, Steven Mnuchin, and the Federal Reserve Chairman, Jerome Powell, are two main government officials that have to do with our monetary policy, the choices that the government makes. One, on the side of spending and the government budgets, and the other one on the side of how to protect our currency as the strongest currency in the world. That’s kind of the objective.

Reese Harper:
Both people, right, were looking at the economic environment coming out of the COVID and the Federal Reserve Chair was saying that we needed to have a lot more federal aid, more stimulus injected, more than the $3 trillion that we’d already implemented.

Reese Harper:
Steven Mnuchin, who’s the Secretary of the Treasury, who’s over the budget is probably getting different economic pressures saying maybe, I don’t want to say political pressures because I like to think he’s impartial, but there’s different political pressures to both of these people. But both of them are honestly looking at this and coming at different points of view.

Reese Harper:
Jerome Powell, like I said at first, was trying to say, “We need more money,” and Steve Mnuchin was saying, “We need to wait and see what happens before we interject more federal aid into this system because we just put a bunch of money in there and we don’t want to just keep adding to our national debt.”

Reese Harper:
One person is saying, “We have to take more swift federal action in order to avoid a problem that’s going to be coming when the government is no longer backing these public companies in the fall,” and the other person is saying … Meaning, sorry, I just skipped over a big detail, but in the fall is when the government stimulus money is no longer really adequate to help companies like Delta Airlines continue to stay afloat. They’re going to have to be up and running by then.

Reese Harper:
The other side of the argument is, “Hey, this is enough money. Let’s wait and see,” and the reason I shared this was just that I feel like both of these people with tons of information and actual, they have control over monetary policy, and our currency, and taxes to actually affect the outcome of a country’s growth and influence a stock market.

Reese Harper:
Both people have such dramatically approaches based on what they think is good for that market, and that country, and for our overall financial health. They even control … The rest of us sit around and we’re just … We’ll call it we’re pawns in the system. We’re just being acted upon by the powers that be and sometimes we think we know the answers. Sometimes we think we know the way a market’s going to move or the way, the direction of a country should go, of the way that paying down debt may affect something, or the way a stimulus is going to affect something.

Reese Harper:
You hear it all the time from so-called financial experts and pundits saying, “Well, this is going to happen if this happens.” I just thought it was remarkably insightful to see two people who not only have a ton of information, but actually control the outcome of the direction of the company both saying, “I see the world very differently than you. Even, given all the leverage that I can pull, I still think it’s going to go this way,” and another person’s saying, “We need to wait and just not do anything because we’re going to be in great shape. The market’s going to be recovering and we’re going to be fine,” and the other person says, “No, it’s not. The market’s about to implode.”

Ryan Isaac:
Two totally different opinions, yeah.

Reese Harper:
One’s essentially saying, “The market’s going to implode.” One’s saying, “This is going to be fine. We’re going to be in good shape.” That’s just really insightful, I think, for us to look at and say, “Hey, when your friend, your buddy, or a person that you’re talking to says, ‘This is the way the stock market’s going to turn and this is the way things are going to be,'” if the Secretary of the Treasury and the Federal Reserve Chairman can’t agree on what is actually going to happen in the future, your friend, who has absolutely no ability to control anything or even move the need and has way less information, do they really know? Does a stock picker know? Does a market timing analysis or a newsletter know?

Reese Harper:
So, I’m kind of in this … That’s why I shared the articles. That’s why we diversify. That’s why we put our money in a lot of different places and we have a very patient approach to growing our capital. Because if I would have told you that I invested money, we’ll say, in the month of March. If I would have told you, Ryan, that in the month of March I’m going to have a 20 plus percent return from March until now on those deposits, right, in some cases, in some of the sectors even higher than that, I didn’t believe that’s what was going to happen over the last 30 days. I didn’t believe the market was going to be back to almost the levels it was prior COVID within a 30-day period of time.

Reese Harper:
That’s why I don’t try to pick. I just invest consistently all the time and try to make sure that my portfolio is adequately diversified among the entire global market using Latin American, and Europe, and Asia and using the United States.

Ryan Isaac:
Okay, so that’s something, that is a word that you specifically used was global, diversified globally, so maybe explain when you were thinking about this, as opposed to what? What are other people doing when they’re not-

Reese Harper:
Well, right now-

Ryan Isaac:
… investing globally?

Reese Harper:
… a lot people, contrary to that, are saying, “Well, the airline sector was the most beat up so I’m going to invest in the airline sector,” or, “The stocks that are in the energy sector, the XLE Index, like Exxon Mobile are the most beat up because of the way oil prices have been affected by this pandemic so I’m going to buy that sector. I’m going to buy entertainment. I’m going to buy cruise lines. I’m going to buy air travel, and hotels, and oil, and energy and solar. Those are the markets that are hurt the worst and if I buy those, then I’m going to have the most upside.”

Reese Harper:
Well, that might be the case, but I don’t know how long you’re going to have to hold onto those to realize those returns. That’s a more aggressive, more risky, more speculative position to take than saying, “I’m going to own the Russell 3000,” or, “The Wilshire 5000,” or, “The European FTSE 100 Index,” or, “The Eurasian market.”

Reese Harper:
“I’ve got these five choices that I am thinking about and I’m going to pick from one of them,” versus, “I’m just going to own my small proportional representative share of the whole global market though several indexes that I buy or several mutual funds that I purchase. Those are going to allow me to participate in whatever happens, and I can trust that whatever happens is going to be a good return over time,” and I eliminate myself from having to decide whether I should go with Steve Mnuchin or if I should go with Jerome Powell, the Federal Reserve Chair, and picking.

Reese Harper:
You don’t have to pick. You don’t have to opine. That’s the beauty of investing properly. You just get a chance to diversity and then experience the returns that come with that and then-

Ryan Isaac:
On a global scale.

Reese Harper:
Yeah. And much less emotional turmoil during the way.

Ryan Isaac:
Question would be when I thought maybe the average listener or average client that we have that’s got decent sized amount of money in their portfolios, when people are thinking about making more specific with their investments during times like these, I imagine from my experience, this is true, but I imagine most people aren’t saying, “Okay. If I’ve got, let’s say, $400,000 in my portfolios, I imagine most people aren’t saying, ‘I’m going to put $400,000 grand in airlines, cruise stocks and oil,” right now.” Right?

Ryan Isaac:
They’re usually saying, it’s usually, “I want to put $10,000 grand in here, I want to be $5,000 grand, I want to put $20,000 grand,” or do you find that people want to shift entire portfolios to do this kind of stuff that’s more speculative than concentrated and risky.

Reese Harper:
I was talking to a student. We’re interested in younger people and their investment behaviors. I find that when people have $1000 or $5,000 they’re pretty willing to gamble and bet the farm. It’s just more fun. It’s like, “Well, I only have $500 bucks,” because it’s small-

Ryan Isaac:
It’s a small amount of money.

Reese Harper:
Yeah, even if I double my money … Usually, they’ve actually, when people start the first time they invest, a lot of times they buy something quite conservative because they don’t actually know what it means to see their money move. So, they’ll buy something. They don’t know it’s always conservative, but like the S&P 500-

Ryan Isaac:
Buy some Apple.

Reese Harper:
They’ll buy Apple stock or they’ll buy something that’s a little more-

Ryan Isaac:
Something that seems stable-

Reese Harper:
… household name.

Ryan Isaac:
… and bit and yeah.

Reese Harper:
Then they realize it doesn’t move very much. Like, “That isn’t like-”

Ryan Isaac:
It’s kind of lame.

Reese Harper:
“It is kind of lame. It’s kind of boring. It doesn’t go up and down very much. I kind of wanted to double my money. What could I do? The stock market thing is kind of boring.”

Ryan Isaac:
“And I kind of wanted to double my money.”

Reese Harper:
They open a Betterment account and it’s like the long-term retirement portfolio’s so boring, it’s four months later you’ve made $4.00. You’re like, “I don’t know about this thing.” And so they’re like, “Pick something cool, not into a penny stock,” or, “I’m going to buy something speculative or small.”

Ryan Isaac:
“I’m going to use leverage and buy some Tesla or something.”

Reese Harper:
Yeah. Or, “I’m going to do a doubly short T-line position, T-line SPDR, right? And so, “I’m going to buy a doubly leveraged short ETF market and it seems to be moving a lot. It went up 400% last year.”

Ryan Isaac:
Looks more fun, yeah.

Reese Harper:
Then, once you get a little bit more money and people start playing with a little more, if they have a really good experience they keep actually doing that for quite a while. If they have a negative experience and they get burned, then they get conservative and they start going like, “I don’t know, maybe I don’t know what I’m doing.”

Reese Harper:
I just pray, usually, that they have that experience where they get kind of burned early-

Ryan Isaac:
Just get crushed with a small amount of money.

Reese Harper:
I just want them to get destroyed with a small amount of money. I don’t want them to have this experience where they’re like, turn $100,000 into $400,000 and then they think they can see the future because then they’re going to lose that whole 400 and they’re doomed to failure. The rule of thumb is, the earlier you are in life … It’s the same way with earning a lot of money. If you build an app, there’s a story you could read about in the New York Times of a young entrepreneur that built an app that sold to Facebook right during the time they purchased Instagram several years ago.

Reese Harper:
It was six months into developing his code base and Facebook had to acquire this company because of some, to my recollection, it had to do with a trademark and industry dispute around intellectual capitals. So, he’s part of the Instagram acquisition for some random reason, but it was a multi-multi-million dollar [crosstalk 00:16:16]-

Ryan Isaac:
Definitely not … It wasn’t his doing?

Reese Harper:
Yes.

Ryan Isaac:
It wasn’t the plan.

Reese Harper:
But in this case you earn this money so early in your life, okay, so early in your life that you kind of think money comes really easily and that there was a lot of skill involved in that and there was a lot of strategy involved in that. You really are, if you’ve seen Silicon Valley HBO, you have, Ryan, you’ll appreciate this. What’s the name of … Bubblehead? And he just doesn’t know anything. He’s kind of an airhead and clueless, but he’s rich and young.

Ryan Isaac:
Oh, you’re talking about their buddy?

Reese Harper:
Yeah.

Ryan Isaac:
The dumb one that doesn’t know anything and he’s always involved in this stuff? Something Head. That’s his last name.

Reese Harper:
It’s Big Head.

Ryan Isaac:
Big Head, yeah-

Reese Harper:
Big Head, Big Head.

Ryan Isaac:
… Big Head. He can’t code. He doesn’t know how to do anything.

Reese Harper:
Yeah, and he just came into a bunch of money-

Ryan Isaac:
He teaches at Stanford.

Reese Harper:
Unfortunately, investing is a lot that way early in your life. If you have a really big hit and you start to attribute it to skill. I just think that it’s good for people to realize as early as possible that in the private market in small business ownership sometimes, like a dental practice, if you were to open three dental practices within a few years and grow them from scratch start to success, that’s a lot of skill involved in that. There’s a lot of effort and information that you had to know.

Reese Harper:
It’s very different if you just threw money blindly at a stock and it tripled in value and, in a public stock market, once everyone has all the information about every company you end up having less control over the results. Because you don’t, just like Steve Mnuchin and Jerome Powell, you don’t control all of the outcomes. You don’t even have conviction because there’s so many competing agenda of economic forces that can go either way that your best bet is to trust that the entire system will rise over time because that’s how markets work. Anyway.

Ryan Isaac:
Man, that’s really good. Okay, so a recap on that then for listeners, and clients, and people who have grown larger sums of money in retirement accounts, then they’re probably not looking to make those same kind of bets with their whole portfolio and need a better solution. That’s why you’re saying a globally diversified low-cost portfolio, frequently rebalanced with a high savings rate, which is also what you put in there. High savings rate, frequent rebalancing, long holding period, that’s just your odds are highly in your favor at that point.

Ryan Isaac:
If you want to see the discussion there go to DentistAdvisors.com/group. You can see all these posts in the Facebook group, so when we come back, we’re going to take a quick break, we’re going to come back and hit one more question that actually perfectly follows this one. Then we’ll keep going.

Reese Harper:
Ryan and I are pretty easy to talk with and so are other advisors. Let’s just find a time that works for you so we can start a conversation about how to take control of your financial future. Give us a ring at 833-DDS-PLAN to set up a free consultation or just go to the website at DentistAdvisors.com and click, “Book free consultation.”

Ryan Isaac:
All right. We’re back and we are going to go with a question now that really dovetails into … It just follows what you were talking about with investments, and the economy and people being worried about where this is headed.

Ryan Isaac:
This actually comes from a client who is picking a new portfolio with a decent size amount of money, it’s a couple of six figures, and they’re investing for the first time. They’re taking cash that they’ve piled up and, for the first time, they’re investing in a portfolio that’s going to be in some stocks. After all the stuff, they’re really wondering.

Ryan Isaac:
I’ll read you this question. It’s a really great question. They said, “Before we go into …” They were going to pick a portfolio that was 100% stocks, by the way. These are younger people in their 30s and they have a long time left. They’ve got liquidity and savings and that kind of stuff, so they said, “Before we go 100% stocks I have a few question. I understand, historically, that this is a wild ride,” meaning the stock market, “But over 20-30 years end up being mostly advantageous to invest in mostly stocks.”

Ryan Isaac:
So, they said, “Do you think that that scenario changes at all with the current economic climate, including all the growing amounts of national debt and Fed interference in the economy? Also, all of that combined with the economics of the pandemic throughout the world.”

Ryan Isaac:
Basically, they’re saying, “We’ve got a long time. We think investing in stocks is a good idea. Over decades, it’s historically been good, wise decision, but is that now different? That’s the question. “Is it different now because of everything we just experienced and all the new debt that we have and what we just experienced globally with this pandemic?” That’s the question. Is it different investing in stocks moving forward?

Reese Harper:
Man, this is such a good question and one that I feel like I have answered once a month for the last 17 years in my career.

Ryan Isaac:
And once a day for the last three months.

Reese Harper:
I’m not saying that to belittle the question because it feels real to people every time they ask it, but I think-

Ryan Isaac:
Well, most people haven’t asked it or answered it once a month for the last 17 years.

Reese Harper:
I will say there’s several articles that we have on our website, including I think one entitled Is it Different This Time? Ryan, you can do a little bit of searching if you can.

Ryan Isaac:
Okay.

Reese Harper:
There’s several presentations that I’ve posted onto that have Time Magazine articles and clips about different periods in economic history when there were actually headlines on articles and on Time covers saying, “Is it different this time? It’s just a common question. It’s one of the most common investment questions people ask before they start investing.

Reese Harper:
I would answer it from this perspective. This is me shooting at the hip from this, so bear with me. This is what I’ve been doing the last couple of days is that-

Ryan Isaac:
[crosstalk 00:22:58] shooting. You’ve got good aim.

Reese Harper:
… if the reason that … Well, to one, give you some credit for this questions, there is a likelihood, okay? There’s a likelihood that from 1980 until now as the government was adding debt … Okay, when companies add debt they typically grow faster. A dental practice, instead of paying down $100,000 grand worth of debt on your practice loan, if you put $100,000 grand towards social media messaging you’re generally going to grow the asset more. The value of the practice will grow more than if you just pay down the debt.

Reese Harper:
If you pay down the debt, the market doesn’t know that. Your customers don’t know that. Patients don’t know that. Facebook doesn’t know that. So, you don’t grow more when you pay down debt. If you keep the cash, keep the debt and then you invest it, you’re going to grow your practice more.

Reese Harper:
That is typically what happens in a stock market. If a company has a million dollars and they can either pay down their debt or they can invest in a product or a service that grows their company, that’s what they’ll choose to do generally, if they’re trying to grow.

Reese Harper:
The government works very similarly, right? If they have $3 billion that they rack up in debt and dump it into the economy, like over the last three months. It’s like, “We’ll just jack up our debt and dump it in the economy,” it’s going to grow the market. It will move the needle. It’ll make things become more valuable.

Reese Harper:
That being said, there is a history of a lot of these types of things happening since the ’30s and ’40s, where governments have debt. That you go into World War Two, or you can go back prior to the stock market, you can see where the government racks up a deficit during, let’s say, the Civil War. The government’s racking up a deficit and a lot of national debt, almost as much …

Reese Harper:
They measure the debt that governments rack up as a percentage of their GDP, so you look at your debt service or the interest you have to pay on your debt and you compare that to the actual GDP that you are generating, or the total amount of sales of stuff that your country is making. You can also compare it to the tax receipts that you’re getting. You’ll see that the government, even today, it’s not like we’re worse than we were during some of those periods in terms of leverage, in terms of how much income-

Ryan Isaac:
Yeah, compared to GDP.

Reese Harper:
… do we have compared to the debt payments we have? But we are pretty high right now. We’re high. This isn’t Civil War leverage, but this is pretty extreme. I would say we’re in the 80th percentile. I’m doing this by memory because I reviewed this a few months ago, but they’re in the 80th percentile of where we’ve been in terms of our cap, our peak.

Reese Harper:
There’s been times where we have no debt. I think it was Andrew, was it Johnson? Andrew Jackson, he’s a president. During his time we paid off all our debt. During Reagan era it was actually, it was the last time I think we actually had really meaningful multi-year surpluses in our budget, where we had extra money and we were paying down debt and had extra cash.

Reese Harper:
It just hasn’t really happened since then, so all of that debt that you pile up, it does make things grow up. That’s been happening since the ’80s and ’90s and the 2000s, so that does grow your country, especially it allows companies to have more influence. They might have lower taxes or they might have better resources. The government spending money creates and opportunity for companies to actually thrive.

Reese Harper:
So, there’s an argument to be made, I think is valid, that going forward if we want to pay down debt ever, if that’s a goal, and the government wants to start paying down debt, then similarly to how my example of a dental practice paying down debt won’t grow their collections, there’s a possibility, and a reasonable one, that stock returns might not be the same as they were from 1980 until now.

Reese Harper:
However, if you look back from 1926 until now there’s a pretty consistent trend of very similar annual returns. There are 10 year periods of time where the returns are really high, like 1990 to 2000, we have the tech bubble. And there are periods of times where it goes disproportionately low after big rallies like that, like from 2000 to 2010 where it’s almost flat. It almost didn’t grow at all.

Reese Harper:
But the average has been around 10% of the US stock market, regardless of what’s happening in the world. That being said, if you’re going to say, “What’s a bear-ish scenario? What’s a cautious scenario that I’d want to take moving forward?” I’d say, “Well, you might not want to plan on having 10% returns from the stock market.”

Reese Harper:
“Is the stock market going to crash and burn and die?” Well, no. I mean, it could if currencies and countries and everything implodes and there’s no economies, then yeah. The stock market, it is a fragile thing, just like a bank is a fragile thing. Banks say that have $1 million in deposits and they only have $100,000 grand on deposit. They only keep 10% of what they say they have.

Reese Harper:
Our whole country, our whole economy’s built on a pretty fragile system. And so, that aside, the truth is that most of the cycles we’ve been through grow the stock market at a really similar return. So, you just want to be careful looking forward that you don’t project 10% annual returns. Don’t project that.

Ryan Isaac:
Sure.

Reese Harper:
If you want to be-

Ryan Isaac:
Don’t build that into your you’ll only reach your goals if you get 10% returns on your investments. Yeah.

Reese Harper:
Yeah. Maybe look at what happens if the next 20 years are 5.5 or 6%? What I can say is that if you look at every other asset class though, like real estate, rentals, commercial, residential, land, farm values, bonds, fixed income, REITs, all the types of investments you can buy, the stock market has the highest annual compounded annual rate of return by far of any asset class going back to 1926 when we really had good data on these S&P 500, for example.

Reese Harper:
And so, if that’s true in historically, it’s probably going to be true moving forward. If the stock market’s not having quite as much growth as it did over the last 20 years, other asset classes are probably going to be not having quite as much growth either. I don’t see a period of time where if the stock market’s really struggling somehow our property values, our residential real estate, are going to have exponentially higher returns.

Ryan Isaac:
Will make double returns. Yeah, right

Reese Harper:
It’s like every asset class is also in the same-

Ryan Isaac:
They’re affected.

Reese Harper:
They’re affected the same. And if the government-

Ryan Isaac:
[crosstalk 00:30:54] policy.

Reese Harper:
… starts paying down debt and the government starts trying to get in check and be more responsible? Again, all things that I don’t see happening, unfortunately, but if they did try to do that which, at some point, they’ll be forced to-

Ryan Isaac:
Forced to.

Reese Harper:
… and then that’s-

Ryan Isaac:
Just like any family.

Reese Harper:
… when you might be like, “Okay. The stock market’s going to be, ‘Okay, the government’s not helping us out as much. Companies are not getting PPP loans.'” They really didn’t anyway-

Ryan Isaac:
Yeah, we’ll go through another [crosstalk 00:31:27]-

Reese Harper:
Yeah.

Ryan Isaac:
… five companies, 5% of companies.

Reese Harper:
It wasn’t okay for public companies to get PPP loans, but there was a lot of public companies that got government assistance, just not through the PPP program. At least they did originally, but then it was taken away from them once they found out they got it. Shout out to Ruth’s Chris-

Ryan Isaac:
When you’re listening to this later, we don’t know what happened a year from now, 2021. I don’t know.

Reese Harper:
Should out to Ruth’s Chris who stole the money. Anyway. I would just say people just need to stick with this framework of which asset classes provide good returns. Yeah, have real estate, have stocks, have a dental practice, continue to invest in all of these asset groups and use our proprietary planning process to track and organization it all so that you know how to really quantify where you should put your next dollar, right? Because Ryan’s really good at that, but-

Ryan Isaac:
It’s my job.

Reese Harper:
… if the market’s struggling over the next 10 years, I just think it is because the entire global economy is going to slow down its growth rate because there’s a lot of countries that have a lot of debt. This has been a really brutal last decade, between the Great Recession of ’08 and ’09, and then of our recent COVID cycle. Countries have a ton of debt and it’s likely that they’re growth rates might slow down.

Reese Harper:
That, again, may or may not affect the stock market. It might not affect the stock market, but-

Ryan Isaac:
It wouldn’t surprise you either way.

Reese Harper:
… it wouldn’t surprise me if it did reduce slightly our going forward expectations of stock returns as we try to get rid of some of our national debt. And so I just would be more conservative in my projects.

Reese Harper:
What does that mean? You got to save a lot more money and you have to-

Ryan Isaac:
[crosstalk 00:33:16] less, work longer.

Reese Harper:
… save more and you got to invest. Probably even more importantly, that’s why my personal portfolio is quite aggressive in how it’s being invested because if the returns going forward are not maybe … Let’s say that I want to be conservative. I’m going to assume that returns aren’t going to be as good going forward. That’s even more of a reason why I have to be more aggressive with my returns because right now do you think 1% interest rates are going to get you there? Because that’s where the safe returns are at. You want returns that are safe right now? You got the 10-year treasury at under 1%, okay? You can get 70 basis points.

Reese Harper:
But you pay for it on the other side. You think about the last time when safe investments were yielding really high stock returns, you were also paying 18% mortgage interest rates and mortgages were in the high teens. So, cool that the bonds were given 7% a year guaranteed, but your mortgage is 17% and mom and dad didn’t own a house for a decade because they just thought that no one would ever own a house ever again because-

Ryan Isaac:
It was not a great environment.

Reese Harper:
Yeah, it was just crazy. I think that was a great Q&A people-

Ryan Isaac:
Good questions.

Reese Harper:
… thank you for sending them in today, guys.

Ryan Isaac:
It was a good question. Yeah, if you want to give us more questions like this to answer, we love doing this, this is really helpful to us and all of our listeners and people following along. Go to DentistAdvisors.com/group and that’s the Facebook group. Just go in there and post a question.

Ryan Isaac:
And if you want to chat with one of our advisors if any of this strikes a chord with you as something that you need to work on or need some help with, go to DentistAdvisors.com, click the book free consultation button, and have a chat with one of our very friendly and experienced dental only financial advisors.

Ryan Isaac:
Thanks Reese for all the wisdom and all the answers that you provided. Thanks everyone for tuning in. We really appreciate the support and the love. We will catch you next time.

Reese Harper:
Carry on.

 

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