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Highlights from this episode include:

  • The “Financial Pyramid Program” that protects you from burning all your money in the stock market (even during a bubble) (2:41)
  • The most overlooked type of insurance that can potentially save you millions of dollars (3:03)
  • The insidious way growth assets flush most of your investment value down the toilet (and how to make sure they make you money) (5:03)
  • How hype drives up stock prices to astronomically inaccurate prices that can wipe out your retirement savings (6:14)
  • 2 important tricks when investing in high flying stocks that prevents you from overpaying and underselling them (10:18)

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

Get our 5 Year Countdown to Retirement Guide and make sure you’re on track to retire (no matter where you are in your career). Visit brightfg.info/5yeargui

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): Hi everyone. This is Harold Greene of Brightree financial group, and it is time to start doing what you love. Nope. Stop doing what you hate because you can't start doing what you love until you stop doing what you hate. How's everybody doing? I'm having in a pretty decent day, kind of tired. It's been really busy, a lot of things going on, but I'm kind of excited to share with you guys today's show it's something that a lot of people are talking about right now, and it is this frothy fraud, the frothy super Bubblicious stock market that we are in right now.

(01:05): I mean, it is super Bubblicious there, there are so many stocks that are bubbling up, and we're going to talk about that today and make sure you are taking the right approach to investing according to your financial plan and your portfolios. But before I get into the show, I've got to read you the disclosure. We're going to be talking about rapid are a little bit more. And then how all of these bubble stocks kind of tie into what we're doing or whether or not they actually have a place in our programs. So there can be no guarantees made that you'll be in position regards seven to 10 years sooner, or any specific period results of our rapid retire program will vary. And since we're talking about investments, past performance is no guarantee of future results. All investments, including real estate are speculative in nature and involve substantial risk of loss.

(01:56): I encourage all of our investors to invest carefully and also to get personal advice from your own personal investment advisor and to make independent investigations before acting on any information that I share with you. So the information I'm going to be sharing with you guys is general in nature. So if you want to know more, you can get in contact with me at (808) 521-4401. I would go to my website, retired now, retire well.com. And then you can get in contact with me there, but I really just want to share with you guys what is going on and is your investment portfolio bubble proof. Okay. So one of the things I'm going to start off with is the financial pyramid. And you guys have heard me talk about this before, but you must invest according to a specific strategy. And so, first of all, in the financial pyramid, it starts off at the bottom risk management and risk management is a necessity.

(02:48): You have to manage risk. You can't be flying by the seat of your pants because that's all you it burn. So we start with risk management and there's health insurance term, life insurance, property, and casualty insurance, disability, insurance long-term care, insurance and liability. One of the most overlooked types of insurance is the liability insurance. And so you must make sure you have the appropriate amount of liability insurance, either in your property and casualty plan, like your car insurance policy, your homeowners insurance policy, or like a rap insurance policy. That pretty much covers like everything, right? So driving down the street, you bump into somebody, they spilled their hot coffee. You heard this story before it can cost you millions and millions of dollars. So you must protect yourself. And then we have the next tier, which is cash reserves. And we talk about that must be adequate accessible after tax always there.

(03:42): And that can be cashed savings accounts, CDs, checking accounts on micro D permanent life insurance. And again, this is for emergency and opportunity. And in the future, we're going to be talking about leveraging your life insurance to invest in the market. Is that a wise idea for your plan? And that's later on in an upcoming show, the next tier, the third tier in the middle was income, right? Municipal bonds, government bonds, corporate bonds, bond me mutual funds, money market accounts, immediate annuities, and in gum producing real estate. And this is to balance and supplement out your overall plan. And there's, there's other things that you can do to add in, you know, income. And so as we go up this pyramid, the assets in the pyramid get riskier and riskier. So the next phase is growth and that's for longterm in retirement. And that can be common stock, stock, mutual funds, personal business, variable annuities, variable life insurance, which I don't touch because for my program, variable annuities and variable life insurance are not sufficient.

(04:44): That should be in my plan for my clients. And then the very top of the financial pyramid is high risk options, oil and gas, collectibles, commodities, precious metals. And so these are all speculative, right? So you must understand how to properly you're, you're a financial pyramid. One of the things, things I see the most for a lot of people is they're stuck in growth. A lot of their assets are stuck in growth. And so when the market turns upside down or it just really starts to retrace and go backwards, people lose a, a lot of value. And so we, we have to make sure we have a well-balanced financial plan and I'll get into how I help protect my clients, you know, in this entire system. But I just wanted to start off with that financial pyramid because a lot of people do not understand the type of risk that they are taking.

(05:34): All right. So let's, let's talk about the last bubble. All right. So the last bubble happened, I think it was in 2000 and you know, it was the tech stock bubble. You had companies coming out, IPOs, you know, were hotter than hotcakes off the grill. And when we look at them, basically the, the stocks were trading 45 times their forward price to earnings, right? So that's very, very, very, very rich. Basically it was all hype. So companies were coming out and being hyped. They're being hyped on TV. I'm going to do a show later on Todd title don't believe the hype and people were buying into this. And there were no underlying fundamentals as to why these stocks were so frothy. So bubble is basically hype. And I think we have some of that going on right now, but it's, it's a lot less in certain tech stocks than it was back then.

(06:34): So now we're looking at stocks trading 26.9 times forward earnings. And that's as of August 31st of, of last year, and that's from fortune.com. So we've gotten a little bit better, but there are some stocks out there that are just kind of like shooting to the moon. And there's no really real reason as to, as to why they're doing that right, other than it's hype or a pandemic related or, or policy related like the green new deal stuff. And I want to talk about a couple of those stocks right now. One is plug power, Inc. They trade as plug. And another is F cell, which is basically a company call. You will sell energy. And you guys can just kind of look this up in your own time, but you know, but these talks are like to the moon right now. And another one is paying and gaming.

(07:24): And over the last six months, check this out over the last six months, Penn gaming is up 189.8, 6% another company out there plug, plug power. They are up almost a thousand percent in the last six months. That's plug PLU G. Now I am not telling you guys to go out there and buy this stuff. All right. So, so don't go out there and like open up an account and start buying a bunch of plug enough. So do not do that. You must sit down and talk to somebody to see if these things have a part to play in your overall portfolio, because there's a lot of, you know, de facto day traders out there, people that are, you know, they have access to the phones. Now they're supposed to be working from home, but they're out there investing and doing things that you know, that are driving up the price of the market now is that wrong?

(08:10): I'm not necessarily saying it's wrong, but if you're supposed to be working, you're sitting there trading that's I call that stealing. You're stealing time from your employer. So that's one of the biggest things I tell my employees is, do not still time. Right? Take your, if you want to take a break, go take a break and do stuff like that. Right? You don't need to sit there and when you're supposed to be working and you're doing stuff like that. So that's like one of my biggest pet peeves, but you know, people are driving the price of this stuff up. They're just throwing money at it left and right. And it's just going through the roof. Okay. Now I don't think it's the big institutional investors that are driving up the price of these stocks. Now, what I will say is I think that some of these big institutional investors are driving up the price of traditional technology like Apple, Google, you know, Facebook, Netflix, things like that.

(08:54): And then some of the others, PayPal pay comm Tesla and, and the likes square, some of the FinTech. And we're going to get into some of that later on in a different show, but these stocks are super, super shoring. And the question is, is do they have a place in your financial strategy? I would say maybe yes. Maybe no. It, it depends on your time horizon and what you're attempting to do. Now, if you are trading for fun and you're like playing games with these stocks, like going to Vegas, then, you know, by all means maybe if you've decided that, Hey, I got a a hundred thousand dollars. I don't care if I lose it, then you know, more power to you, right? You can day trade and play around with that stuff. All you want. Now I do have some clients who say, Harold, I'm going to give you half a million and I'm going to keep 50 and play around with 50, just because I want to see what happens now, by no means, are they trying to beat me or anything like that, where we're not in competition, let's get that straight.

(09:52): They're allowing me to handle their long term financial plan, the big money, because I am, I am looking out for their best interest and I'm doing tons and tons and tons and tons of research. And I'm also doing the same thing for a lot. What about the people and a lot of money. So they trust me to handle that for them. And if they lose what they lose, they're fine with that. And a mum. And I'm absolutely okay with that because I understand, you know, for some people that's fun. Okay. So now I don't want to take that away from them, but if you are going to get into these high flying high bubbly stocks, you got to do one thing and that set your injury and your exit points. Okay, you got to set your injury and your exit points. What I want to mean by that, right?

(10:36): So the log is trading at $75 a share today, they're up like $9. And this is as of a recording of their shoulder up like $9 and 55 cents, which is 14.5, 3%. So if you had a hundred thousand dollars and plunk today, you know, before the market close, you made 14 grand. So if you say, I'm going to get in at like, say, you know, $69 a share, and I'm going to get out at $70 a share, then you can set your limit at $70 a share. And when that price of that stock, it's $70 a share, it's going to trade for you. Okay. So you can set upside, downside limit orders and you can look these terms up. Okay. And you can set them just for that day or good til cancel good till canceled means. You know, it'll be a limit order that will trade at $70 when that stock hits $70, whether it's today, tomorrow, or three months down the road.

(11:29): And that's a strategy that I normally don't use because I have a strategy for my clients based on their, their overall portfolio. And so what I use is I use a performance number, okay. A performance number. And, and I look at my short-term buckets, my long term buckets and my intermediate buckets, or my short-term holdings, my holdings in my media holdings. And so what I want from my short term bucket is between five and 10% a year. If I can get between five and 10% on my short term bucket. And it's usually, you know, in between a conservative, too conservative, moderate type of portfolio, if I can get that every single year, I'm extremely happy. Okay. On my intermediate bucket, I'm looking for between 10 and 15% a year. And so some people might say, well, those are super aggressive numbers. Well, it kind of depends on the market that you're in, in a Bubblicious market.

(12:25): I don't think those numbers are exuberant at all. I think they're kind of low based on the kind of market that we're in right now, but we have to be careful. And you have, I have a strategy tied to that. I call it right. And rotate. Okay. So ride and rotate. So what that means is I ride certain stocks in the portfolio until they get tired or they're not performing. And then I rotate them to other stocks in that portfolio because I am trying to get five to 10%, 10 to 15%. And on my long-term bucket, I want 15 to 20% every single year. That is what I'm. That is what I am shooting for as a professional investment advisor and money manager. That's what I'm shooting for. Okay. But it has to be done within a client's risk tolerance. All right. So if that's you out there and you're not sure if your portfolio is bubble proof, I want you to give me a call so we can analyze this thing. (808) 521-4401. Thanks for allowing me to share with you this topic. I want you to go out there and do your own research as well. And until next time, one, two, three, let's get it.

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