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Highlights from this episode include:

  • The surprising truth about the president’s impact on the economy (1:30)
  • Why you have more power over the market than any politician (2:00)
  • The “Bucket” method for protecting your portfolio during election-induced market volatility (17:59)
  • How to capitalize on great opportunities no matter what party is in office (8:56)
  • What Apple’s stock 458% growth proves about partisan politics’ effect on the market (12:28)
  • The “Cherry Pick & Rotate” strategy for growing your money no matter what party is in power (15:18)

Ready to stop doing what you hate? Go to RetireNowRetireWow.com and fill out the Game Changer form to secure your financial future.

Read Full Transcript

Do you hate the thought of working past 55 or 60? Do you hate not being able to live the life you deserve today? Do you hate not knowing what your financial future looks like? It's time to stop doing what you hate, here's your host, Mr. Harold Green.

(00:20): A little. Hi everybody. This is Harold Green and it is time to stop doing what you hate, help you out there doing well and staying safe. And hopefully you've had a great week. Today's Saturday for me, I've had a very long week. A lot of stuff has been going on. Been very busy here in the office, taking care of people, just taking care of things that need to get done. And like I said, it's been a long week and it's been an up and down week for me. I kind of, sort of, not really an emotional roller coaster, but like I said, it's just a lot of stuff going on. And today I want to get into something really serious. And the title of the show is called politics and money. That's right. Politics and money. You know, there's a myth going around out there that the president has a lot to do with what happens in the economy.

(01:20): And that is not necessarily true as a whole. I think the president do have some say in what happens in some parts of the economy and how their decisions can impact some segments of the market, but they don't control the overall market as a whole. It is up to the investors. Okay. That's our capitalistic society of supply and demand. And so I want to start talking about some things that I want you to be aware of in regards to the upcoming elections and some of the things that you can do to take advantage of what is happening in the market place. And so I'm a little bit of a, I guess, information junkie. I love information. I love to, you know, just fun facts and different things like that. And so I don't know if you guys know it, but my wife is from Japan and I get immersed a lot into what's happening in Japan.

(02:24): We watch the Japanese news. There are just so many things going on in that country that you don't see in your regular news, if you're not subscribed to these channels or newspapers or things of that nature. And I think it's very interesting. So I want to talk about the Japanese political parties and their elections. If you want to know more about this, you can just do your own Google search on, you know, like how many political parties are there in Japan. And so it's, it's quite a bit, they have several different political parties there in Japan. They have the liberal democratic party. They have the constitutional party, they have cool mate Dole. They have meat, bone eating, no guy which translates into the Japanese or Japan innovation party, which is very interesting. They have the communist party, they have democratic party for the people. They have Ray Washington seeing Gumi, which is another party, social democratic party and party to protect the people from N H K very interesting stuff.

(03:27): And so the people there will vote for their political parties and who ever has the most votes wins. And they get to select the prime minister from inside of their own party. So they don't have a person running for prime minister. The political party that gets power gets to select from, with inside their leader, just like [inaudible] now he's retiring for health reasons. And so they just, from within the same party elected one of his right hand guys to now be the prime minister of Japan. And it's very interesting that in Japan, the people, they want everything as a, as a whole, they want their way of life to be protected as a whole. They're not so much interested in saying stuff like, well, I don't believe in this. And I don't believe in that. So I'm not voting for this guy or that guy. No, they kind of stick together as a whole.

(04:24): And they want simple things in life. They want, you know, they want their healthcare, they want their retirement, they want low crime and they just want it to be like that all the time. They're not interested in factions and running over the country with, you know, different type of ideologies and trying to turn the country into just some like, you know, like nutcase, whatever. So they want law and order. They want all these things and therefore, no matter which party gets in power, they all look out for the overall good of their people. However, the contrast in our country is very different. We have very partisan politics, which leads to a lot of volatility in our market because people just don't know what to believe anymore. And this is more so for individual investors versus institutional investors, that the big difference between the two is the institutional investors are investing according to a game plan.

(05:22): That's, you know, looked at by boards and reviewed. It's just very methodical. Whereas the individual investors kind of like throwing darts and saying, okay that I hit bullseye at this time or not. So a lot of individual investors fly by the seat of their pants. They invest based on news and with impact of Twitter, social media, the volatility is just kind of like off the hook. So I want to get into what has happened over the last eight years in our country, in regards to the market, but not necessarily the stock market, but stocks as a individual stocks. Okay. So in 2012, my son was going to graduate high school in 2013. I believe it was. And so we were in between properties and things like that. And my wife and I, we, we, you know, we sat down and actually one day I was sitting down praying at my, my favorite spot and it came to me that there would be an opportunity for me to buy a piece of property at the time we were renting.

(06:24): And we were just kind of stashing our cash and proving our cashflow, making adjustments. And then just like making sure we're ready to send my kid off to college no matter where he decided to go or he got it. So I think it was around June, July, somewhere around there. We started the process of looking for a place. We saw several different properties and, and we were just kind of looking at it and saying, all right, we got to take advantage of what's going to be happening here pretty soon. So what we did was we found a place and because of dislike how bad things were at the time, people were like, Hey, this is probably a bad time to buy it. I'm like, it's, you know, it's always right when it's the right opportunity, regardless of what's happening. And regardless of who's in office as the president, but we've just really wanted to take it back, measure that.

(07:09): So we bought a place super cheap. We bought it so cheap. People were mad at us because when we bought it, it dropped the price of their properties down. I mean, it was a substance, the Angele drop from what they do, we're selling for us. So these places were selling for 700, $800,000. You know, the price has got so low. We picked ours up for like five 15, and then that begins to just mess with people. So go down and, and, you know, use the barbecue grill. And you know, one of the attorneys was like, so you're the one that bought that. Cause I, you know, you had, there is records where you can go online and see who's buying what, okay. Property tax records, it's public information here in Hawaii. So hold on what my name was, you know, I introduced myself and he says, yeah, I'm so and so, and I said, yeah, I'm Harold Green and say, Oh yeah.

(07:54): And you're the guy who bought that place and drove everybody's values down. And I just kind of looked at him like, yeah, man, I got a good deal. So what, you know, I'm taking advantage of my opportunity. So if you've got a problem with that, that's not my problem. That's your problem. You know, just, just grill your meat. You know, it was ingest. It was really funny and you know, relationship with them. Now we talk here and there and but it was just very interesting. So we picked that property up for, for a super cheap. And then since then, the value has, has skyrocketed in there along with other property values here in the state of Hawaii. And that was all under president Obama. So we didn't sit here and say, well, because you know, he's in office or I don't like his politics or this or that, the other, Oh, no, we put, we put all of that stuff on the side and we've never really looked at it like that.

(08:41): We just really wanted to take advantage of opportunities that we saw. I did the same thing with my college funding practice. We took advantage of opportunities, changes that were made by the president to the financial aid. So we really just looked that and said, okay, how can we take advantage of that and make it better for us, our clients versus looking at it from a partisan perspective and saying, I don't like this. I don't like that. And then just not doing anything. So artists of who's in office, you have to understand where the money is moving, where the market is moving, what segment is doing, what, and you have to get yourself in position to be successful. All right. So I'm, I'm going to take you guys through a little exercise and we are going to look at some performances of some particular stocks over the last eight years.

(09:33): And this is going to be a very interesting exercise because it's something that I do with my clients to kind of help them calm down and to understand that we have power, we have control. We're just not going to do a buy and hold thing where we buy a stock and we hold it and watch it drop and move around and gyrate and do all these things. Sometimes that may happen, but it's not for an extended piece area at a time. Okay. So I want to get into that and I want to take a look at some different stocks and just kind of give you guys an idea of how things have panned out over the last eight years. Okay. So I'll first kind of talk about a portfolio that I've built for a client who's retired now. And over the last eight years, if he had been invested in this portfolio, you're going to see some pretty interesting things.

(10:24): But before I do that, I'm going to get into the performance is no guarantee of future results thing. All investments, including real estate are speculative in nature and involve substantial risk of loss. We encourage our investors to invest carefully. We also encourage our investors to get personal advice from your professional investment advisor and to make independent investigations before acting on [inaudible] that I have published in this show. So this particular portfolio for the client over the last eight years generated basically 616% based on the holdings that would have been in that portfolio or back-testing this portfolio. Okay. At the same point, we look at the S and P. So if you're buying an SMP index fund, basically what you're looking at as 156% over the last eight years. So if we take 156% and we divide that by eight, it comes out to basically 19.5% a year.

(11:18): So over the last eight years, the S and P hasn't done all that bad. But if you are buying individual stocks and holding individual stocks in your portfolio, and you were holding the right mix of stocks in your portfolio, you'd have a gotten roughly around 616%. And some people are saying, no, that can't be true. That can't be true. Well, hang on for a second. All right. I'm going to show you some very interesting things. So that came on today about 77% a year. And some people will say, well, nobody's getting 77% a year. Well, some people are, and it's, it may be hard for you to believe, but let's just go back and say, you just bought this. One-Stop, let's look at Apple. That's a, that's a stock that everybody knows very well. And we're going to look at what Apple did over the last eight years.

(12:04): So we've had Obama in office for two of those. And then we had you know, Trump and therefore the last four years. Right? And so Apple has done basically, and this is just back-testing Apple stock, Apple stock alone, nothing mixed in, or 180%, 480.5, 4% divided by eight because it's basically eight years. It's 60% a year. So Apple has given up basically 60% a year in terms of gains. That's a pretty staunch number. And that is in, that is in technology. Okay. To me, I think Apple is a little bit of a cult, right? They have a cult following and you know, they're always coming out with different products. They're always innovating. They're always on top of things. They're moving the needle on what happens in the country. So I feel no matter who's in office, basically the market is consumer driven. It is supply and demand.

(13:02): So let's take a look at some other stocks. Let's look at home Depot and see what's happened with home Depot over the last eight years. And I'm choosing home Depot because it's a very, it's a very interesting stock. And guess what? Home Depot, if you want a bought that since 2012 home Depot is up 519%. That's out, that's home Depot. We divide home Depot by 12. Okay. Divided by 12. I'm sorry. Eight. Cause we're looking at eight years. That's 64%. So Apple's pretty stout. Home Depot is pretty stout. And then let's look at a dividend growth stock and a dividend growth stock is a stock that pays dividends and they've been consistent every single year. And one of my top picks for dividend growth stocks is Verizon. So we're going to take a look at Verizon. They've paid dividends quite a bit. So Verizon is one of my dividend growth stocks and Verizon pretty much does a good job of paying out their dividends.

(14:06): Over the last eight years, Verizon has generated a return of 119.8, 5%. Okay. We divide that by eight and we get 14% a year. So even if you would have just bought Verizon as a whole, you would have been doing pretty good, just buying Verizon stock. And they've you've earned 14% along with basically a 4% dividend on Verizon stock. So if you're using that inside one of your portfolios for retirement, that's a, that's a pretty good stock to hold it. Now I'm not advocating for you to go out and buy any of these stocks, but I just wanted to paint a picture for you of you. Can't always look at what's happening in the presidency and say, I'm going to buy this stock or that stock or the not or not. Because, you know, I don't know. I don't agree with their politics. I'm not going to invest on going away and see what happens.

(14:59): I really, they don't agree with the wait and see strategy. I really believe in a basically you have to cherry pick and rotate cherries pick means you go through and do all your analysis. Rotating means when that stock is out of favor and it's not doing what it needs to do for you, you rotate it out. You rotate that sector to something different. And I'll give you an example of that. So if we look at Boeing, Boeing has been a really good stock for a long period of time until recently. Okay. And because of, of the, of what has happened with them, their stock has taken an absolute beating as of late, how ever over the last eight years Boeing has generated 439.55%. We divide that by eight that's 15, 4%, 54.9, 4%. So even with the beating, they're taking as a late this stock has generated a very good return.

(15:58): Now here's the problem. The problem, the problem comes in where you are, are getting into these stocks at the wrong time. If you get into a particular stock at the wrong time, you can have stated consequences on your overall portfolio. And that's what I mean by you have to share, pick, you have to do your research and understand where things are going to go. Now, if you get in and it drops 10% or even 15%, but then it rebounds 30 or 40%. That's, that's not bad. We, you have acceptable losses. You have an acceptable minimum where you're not going to allow that stock to fall below a certain price point, but you're going to have to be on top of that. So for me, how do I maintain this for my clients? Well, I use what's called models and then allocations within the model.

(16:54): So have different models that are, that range from long term, ultra conservative and things like that, that long term ultra one long term goal for two. So they go from being conservative to like super aggressive. And then we all, so inside of our rapid, when we create something called short intermediate, and then term buckets. And so I use the bucket strategy where we put some money in the short term bucket, we put some money in the intermediate bucket and we put some money in the long term bucket and we rotate the portfolios inside of the, these buckets on a consistent basis based on what is happening and where things are going to go. So these are some of the things that I want you to keep in mind. As you look at the presidential elections and you look at the Senate races and you look at the congressional races and you're going to hear people promise a lot of different things, and you're going to see the, that goes on and leading up to it.

(17:51): You're probably going to see a lot of volatility in the market leading up to this. So I'm going to encourage you to reevaluate your financial plan and then make your adjustments according to where things are going to be, or potentially be in the next, I would say the next two to five years, because our economy probably is not going to recover as fast as some people think it's going to recover as a whole, however, certain segments of the economy are going to do extremely well. And you have to understand what those are going to be, whether it's retail, whether it's material, whether it's growth stocks, whether it's, which is basically technology, or if it's infrastructure stocks that are our infrastructure stocks. So you're going to have to do your research, but you know what, if you do not have time for that, and you do not want to be bothered with all of that and you just want to live your life.

(18:38): Okay. I would say, give me a call and I can help put this together for you, and then watch it for you. Cherry pick for you, rotate for you. So you can do what you do best, which is living your life and enjoying your life and taking care of your family. So if you're interested, give me a call (800) 852-1440 one or go to my website, retire now retire wild.com. Look at the click on the rapid retires section, read that, and then fill out the game changer forum. There's a link there. You can just click on game changer, fill that out, send me your information. And then I will be in touch with you to help you stop doing what you hate. Like if you hate seeing the volatility, you hate seeing things go up and down more times than not as, because you don't have a plan to deal with that.

(19:18): And you really don't know how it's going to affect your long term financial plan. So instead of stick, sticking your hand, your head in the sand, like an ostrich ostrich, and saying, you know what? I just gonna wait until this is all over. I'm not going to do anything. That is the wrong mentality. Take advantage of every opportunity to get ahead. You possibly can put all of the partisan stuff aside, put your political beliefs aside, take advantage of your opportunities to grow because when everybody is running scared, okay, they're running away. That's when you are in position to take advantage and run towards and gobble up some of these things that are cheap, maybe some properties out there are cheap. Maybe there's stocks out there that are cheap, that are at value. So take advantage of the opportunities. I love to be able to hook you guys do that. And so, thanks for allowing me to share with you guys today. And until next time, one, two, three, let's get it.

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