Jason Jacobi, CFP® (00:01.198)
Welcome to your closing bell for the week. We’re here with the legend number 8480. Just using both your numbers here, Mark, but we have a great one for you. It is a new era, the race for tech supremacy. That is our focus this week’s conversation. We’ll obviously cover some other big news this week. We had inflation numbers. We had big news for Bitcoin.
I’m going to call you Bitcoin boyer from now on because you got your billions in Bitcoin. But yeah, but we do have some great stuff for you. And again, we’re always trying to be entertaining, insightful, and hopefully somewhat smart. But all jokes aside, we’re excited to be here this week with you. So Mark, I’m going to leave the boring bonds to you. Not that because you’re a little bit of a jerk.
Mark Boyer (00:31.33)
Bitcoin Blooier
Mark Boyer (00:38.637)
Yeah. I might now.
Mark Boyer (00:57.718)
Why do I get the boring bonds and you’re going to talk about Nvidia? That seems so wrong.
Jason Jacobi, CFP® (01:01.396)
Yeah, you have the flashy tech stuff because I’m a flashy guy.
Mark Boyer (01:05.078)
Yeah, that’s all right. You’re flashy. I’m just kind of basic, boring, boring. Boring, boring, don’t start that. Right now I’m like, I’m salt, right? Salt, pepper, now you’re going boring, boring. That’s gonna be kind of, that’s not, whatever. But I think this boring, so speaking of that, so let’s talk about bonds, fixed income, right? So today, we got the ag at 10 year treasuries. What about?
Jason Jacobi, CFP® (01:12.945)
Uh… You’re fu- Boring Boi-er.
Jason Jacobi, CFP® (01:22.449)
Uh, Dick. Yep. Let’s do it.
Mark Boyer (01:33.85)
4% roughly in that area. We’re actually, today’s Friday, so we’re yield to drop a little bit today because we had some inflation numbers that look like, again, cuts are in the future, which is positive. So in our commentary, we’re talking about bonds and there’s a lot of reasons to be optimistic about bonds, especially if you think the economy is going to be slowing down. And we talked about this at our…
year in call and so forth. I think most analysts, most people feel like, do we go into recession? That’s kind of the question, but we’re definitely, whether we do or not, there’s a potential slowdown. In fact, in December, the Fed was super clear that they’re done raising rates. Now, there could be that extreme situation if the economy picks up, if things keep moving.
faster, you could raise, they could be wrong and that would be a shock to the markets. But basically it looks like things are slowing down and that the Fed is in line to cut rates. They’re talking about, I think the market’s basically factoring in about a six cuts in 2024 and that’s really high. But if it got really, for a recession got…
Jason Jacobi, CFP® (02:46.5)
Yeah.
Mark Boyer (02:54.434)
deeper. If that actually happens and goes deeper, that’s possible. So we’ll see. I’m not sure we’re that aggressive, but we do think that there’s bottom line cuts are coming. And so how does that look for bonds? Well, a lot of people are sitting in cash right now. We talked about this before. There’s a lot of money on cash that’s getting good returns and T-bills and CDs. You can’t argue with that. It’s been great the last year. I mean, first time in a long time we’ve had yields to work with.
So a lot of that money just to be safe is, you know, and then we had a bear market couple of years, you know, 2022, you know, it was pretty rough in the stock market. So a lot of people just like, Hey, I’m out. I’m going to go to cash. I can get healed now. And that makes sense. Makes sense. But, but, but this is a big, but going forward now though, the math part of the bond market and how that all works really comes into play if you’re sitting on cash right now and T bills or.
You know, a CD at the bank, you know, you’re getting a good yield. But if in fact, yields do come down, some are saying as much as a hundred basis points, right? This next year or 1% this next year, that could be significant difference. So you would, you know, whatever you’ve got your T-belt or CD, you’re going to get your return, but if you keep it to maturity, you’ll get that, but your reinvestment risk is on the other side. When you get, when you get to the end of that term, yeah, you got your
Jason Jacobi, CFP® (04:02.201)
Yeah.
Mark Boyer (04:20.098)
4.5%, 5% or whatever, but you’re now going to be locked into rates at where they are when that matures. Makes sense, right? So now you’re six months out and you’re going to get a much lower, if it drops, a much lower interest rate. So how does that compare with owning some fixed income? Well, the question is, well, if you then took cash and put it into fixed income, say the 10-year aggregate, where you’re getting good yields,
Jason Jacobi, CFP® (04:47.066)
Mm-hmm.
Mark Boyer (04:49.538)
Right now, like I said, it’s around 4%. So you’re getting a 4% yield. That’s great. And now, if and how it works, it’s based on duration. If you’re 10-year, you know, if you’re in a bond fund per se, that has an average duration, let’s say 6% duration. So they’re into some short-term bonds, but they also, you know, they’re in five, five-year bonds and different things like that. But the average duration of that portfolio is 6%. You can basically say if it comes down 100%
basis points over the next year. Van, we don’t need to get into bond math, but bottom line is your capital appreciation equals your duration. So you would get, we drop 100 basis points, you’re in that fund, your fund’s going to appreciate 6%, which is roughly the duration of that portfolio on top of the 4% that you’re already getting yield. So you’re talking 10% return over the next year?
Jason Jacobi, CFP® (05:39.308)
Yep.
Jason Jacobi, CFP® (05:44.738)
Right. Yeah.
Mark Boyer (05:48.414)
in a portfolio that has what a third of the volatility of stock market, you know, um, volatility. So, I mean, really good, safe, solid return in fixed income, uh, as opposed to just keeping your money in cash. So that’s kind of that. And so that’s not nothing new is a lot of that’s a building conversation in wall street and, uh, so anyway, something that is really important and what we’re working on in portfolios is making sure we take advantage of a lower
interest rate environment going forward. So, important to look at again, see how much money you need in short-term cash, but get that other money into some good, solid fixed income securities so that you can benefit from appreciation.
Jason Jacobi, CFP® (06:30.274)
I’m glad you mentioned that because I was just going to say, yes, like have, if you have short-term cash needs, you got dividend income, you got your income coming in and then you, your cash that you need in the shorter term, keep that in money markets, take advantage of the higher rates, but again, it’s because you need it if you don’t need it. Like you just said, make sure you start extending that duration because I mean, think about this and I want to even think further of what you’re talking about is. Okay. So imagine you stay, like, oh, I’m just going to stay in.
Mark Boyer (06:42.934)
Yeah.
Mark Boyer (06:51.938)
Yeah.
Jason Jacobi, CFP® (06:59.95)
You know, ultra short or short duration, you know, bonds or money markets. We’ve got 6 trillion in cash and money markets right now are just about there. When let’s say you just say, I’m just gonna stay there. The rates are great. Ah, they’re going to be, they’re going to be higher for longer. I’m good for now. You just keeping your short-term mindset. All of a sudden, when you’re going back into your reinvestment risk, so you’re reinvesting, you own a six, six months CD in six months, the rates fall a hundred basis points.
Hypothetically speaking, when you go in and reinvest at a lower rate, you’re like, oh no, now I want to go longer. Now I want to go longer duration. I want that total return. You’ve already missed out on so much of that total return even if you wait six months. When the Fed starts cutting, you’re already starting to miss out on that total return. So the time to get your cash to work is now. We’ve preached it. We’re going to continue to preach it. So great points that you brought up there, Mark.
Mark Boyer (07:43.208)
Yeah.
Mark Boyer (07:54.65)
Yeah, we have a window of opportunity in here. And I think as investors, you got to take advantage of that. So really important to look at your cash needs and make sure you get it in a situation where it benefits you the most and if interest rates do drop like we think they can this year. And even if we’re wrong, okay, let’s just say, even if we’re wrong, longer term, it’ll eventually, it will play out. But even if you’re wrong in the short term,
Your downside risk is really minimal. You know, you might, if in fact rates go up, you know, 50 basis points or something. Yeah, I mean, we still get our yield. We still get our yield in the fixed income. We might lose some capital appreciate, you know, capital growth in that. So maybe your return is, you know, 2%, which is not great. I’m not saying that’s great, but you know, the risk of losing the significance amounts of money, even if it goes the other way, it’s not. I don’t know, I just think it’s a good play.
And to your point is, is just thinking about where you are in your portfolio, how much money do you actually need in, you know, CDs and T bills? Uh, and I’ve been a big T bill. I mean, I’m all for that. The last number, just the point is now we’re in a different cycle, perhaps. And that’s where you have to look, um, even with your, I think, you know, you mentioned, you know, I just think totally my opinion, but I think in this period of time, it’s hard, I think it’s best to try to find investments where you can get these.
higher yields, but with liquidity, the ability to get out when you want and make changes. In other words, not locking your money up for six months or a year, but having it in something like, you mentioned ultra short, there’s some, we’re using some investment vehicles that are, are T-bill like, but are very liquid. Like I can get in and out of them on a daily basis. So again, I think it’s important to stay liquid.
Jason Jacobi, CFP® (09:42.702)
Right.
Mark Boyer (09:51.006)
and flexible in your portfolio management now, especially on the fixed income. So, good stuff.
Jason Jacobi, CFP® (09:55.522)
Love it. That’s great wisdom. Great wisdom for our viewers and listeners here. All right, so I want to jump to inflation real quick because I want to end with tech. I think that’s kind of the juicy and meaty portion of it. But I just want to briefly touch on inflation because we had the PPI producer price index and the consumer price index inflation data come out Thursday and today, this morning. So I want to start with the producer, right? I want to start there with the goods producing people. Let’s talk about it. So year over year,
Mark Boyer (09:59.408)
Ahem.
Jason Jacobi, CFP® (10:24.686)
headline PPI actually reached 1.8% down 20 basis points from the previous reading. And it was below the analyst expectations, which is fantastic. Right. So again, cooling inflation, sorry, on the producer side, which filters through to the consumer side. So we should be seeing next month, hopefully cooler readings, which will get to CPI in a second, which kind of reaccelerated a little bit. We can talk a brief conversation about that, but, but headline PPI again, 1.8%. First. Uh,
below 2% in quite a long time. So this is fantastic news. But core PPI actually increased by 10 basis points to 2.5%. So again, you’re stripping out the kind of more volatile sectors there. It’s still a little warmer. Again, it’s above the Fed’s inflation gauge of 2%, but 2.5% will definitely take it at this point. It is the lowest level since February, 2021.
besides last month’s figure. So again, just 10 basis point re-acceleration off of the lows dating back to February, 2021. So good news on that side. Let’s go to the consumer and I’ll get your thoughts on this here. Consumer price index actually sped up a little bit. So inflation rate, again, that’s what we call consumer price index, consumers spending, inflation risen to 3.4%.
So that surpasses expectations by 20 basis points and it’s a 30 basis point increase from November’s 3.1%. Now, core CPI also increased slightly to 3.9%. That’s tripping out volatile food and energy costs. So again, below it’s below 4%, which is fantastic. Again, you look at history, right? In the last 90 years or so, inflation averages about 3.9%. So that core numbers right on track.
And then the headline, obviously 3.4, not where the Fed wants it. So maybe higher rates for longer. If you know, they’re going to see if this trend continues, does it go up even from there? I think it’s holiday season and spending in that way. You know, people, the consumer was just trying to end the year on a strong note. Mark your thoughts on that.
Mark Boyer (12:41.61)
Yeah. I mean, all of this, uh, Jason, for me, um, you know, these are numbers that are coming out and, uh, and, um, yeah, a little bit higher in some and lower in others, um, I can think you got to think longer term and look at the trend. The trend is to the downside, which I think ultimately, you know, I don’t see anything that’s really upended the thought that the fed has done hiding high hiking rates at the current point. So anyway, good stuff there. I mean, I think that’s, uh, that’s what we got to keep our eyes on.
longer term in that and in those numbers. I went to get gas today. Good news. I went to get gas this morning and, you know, empty tank and filled up the car and wow, it’s like, nice. I mean, I’m a little less than a hundred bucks, you know, and then we used to, you know, just to seem like the last couple of years, it’s been 130 plus. So, I mean, I don’t know, that’s good news and, you know.
Jason Jacobi, CFP® (13:17.541)
down.
Jason Jacobi, CFP® (13:30.937)
Yeah.
Mark Boyer (13:41.214)
Yeah, so I think it’s in the right direction.
Jason Jacobi, CFP® (13:46.462)
I agree. And again, we don’t know exactly when the feds are going to cut rates. Some people are pricing in March at the March meeting. We’ll get rate cuts, but again, it’s going to be data dependent pals harped on that from the beginning. Um, and also I heard an interesting, um, comment from, um, a manager I met with yesterday afternoon saying, Hey, the fed doesn’t like to raise rates within 90 days of the election. So your window to actually get the rate cuts that you’re looking for is actually a lot smaller.
So we might get more aggressive rate cuts or with fewer rate cuts, or you might get, you know, 10, 25 basis point rate cuts, 20, probably 25 basis point rate cuts, you know, in even increments or whatever. So again, it accelerated a little bit. I think it’s a holiday season year end. We should see those numbers trend down these next coming months, but we’ll keep you updated. But the main points we want to talk about today. So imagine this, Mark. Okay. You look at your digital calendar.
Okay. Look at your digital calendar. You were playing, not yet. This is where tech’s coming in, right? This is where we’re gonna go with this here. So come along on this journey, all right? So.
Mark Boyer (14:47.566)
I don’t have a digital account. Do I have a digital account? Maybe that’s.
Mark Boyer (14:56.486)
I’m old school, bro. I still write things down on big yellow pads. You make fun of me. But that’s just how it is.
Jason Jacobi, CFP® (15:05.53)
No, you’re pretty tech forward. I can appreciate that. So imagine your digital calendar one day, right? And you have a family trip. You’re taking all of us to Bora and those overwater villas, just putting that out there so we can do that. Yeah, this is in the future. We’re just forward planning. We’re just putting into the sphere.
Mark Boyer (15:06.858)
Yeah, I’m getting better. I’m getting better.
Mark Boyer (15:19.998)
I am. Okay. What’s Bora Bora. I thought that was Bora. I thought it was Bora bonds a little bit ago. Now it’s Bora Bora. How do we go from boring bonds to Bora Bora? Anyway, whatever. Go, go on with your example. In your dream.
Jason Jacobi, CFP® (15:30.19)
Bora Boyer. See now we got a third name. Yeah, so we have Bitcoin.
So, yep, exactly. So this is my dream here and there’s method behind the madness. So digital calendar, like, hey, I’m going to take the family to Bora Bora. So basically you’re going to type into the computer, dates you want to leave, it’s going to link up with your digital calendar. It’s going to search for the lowest airfare. It’s going to look for the best hotel prices. It’s going to monitor those. It’s going to execute your order.
Um, send you the plane tickets, book your preferred window or aisle seat. Um, going to rent you a car if you need it or set up airport transportation based off of your preferences that you’ve laid out in your generative AI, uh, little computer system. Okay. So this is where we’re going.
Mark Boyer (16:24.726)
Is it going to work out? Is it going to work out for me too? Okay.
Jason Jacobi, CFP® (16:28.002)
Yep. No, that’s one thing you can’t do. Okay. It’ll never be able to work out for you. But my point being is we’re in a new era, right? This isn’t like the.com bubble. This isn’t like, um, cloud services when that kind of started off in 2008, that took kind of a decade to gain some traction because there was a lot of infrastructure that has to be replaced in that sector. This is like moment by moment, real time change. So, uh, again, just harping back to the point of.
Mark Boyer (16:34.562)
I’m sorry.
Jason Jacobi, CFP® (16:57.986)
Like growth and innovation, there’s no better place in the world than America to get that. That’s why we love investing in American companies. But this AI space, it’s a whole new beast. And then there are a multitude of companies, a lot of the mag seven that we’ve talked about that are vying for supremacy and to have to wear the crown of tech. So you know, one company I want to talk about is of course, Nvidia.
You did looking back five years at performance of Nvidia. What do you think? What do you think performance wise Nvidia has done? Total, total return, not year by annualized performance, total return in the last five years.
Mark Boyer (17:38.043)
I should know this number, but I would say, oh, wow. Let me look at it short real quick.
Jason Jacobi, CFP® (17:42.978)
Again, just off the top of your head, because people sometimes don’t think about this. Just throw a number out there.
Mark Boyer (17:49.218)
70%. No, no, that’s too high. A five year annual return? Oh, total return. Oh, what is it? A thousand?
Jason Jacobi, CFP® (17:53.486)
Five year… No, total return.
Jason Jacobi, CFP® (18:03.974)
Close 1370, 1370% total return over the last five years in video. Most of that did not happen until 2022. Okay. We had a nice little peak at kind of end of 2021. Obviously markets had an incredible downdraft in 2022. Bond market did as well, lots of uncertainty and crazy rising, crazy through the roof inflation. But I think the main thing is like.
Mark Boyer (18:06.414)
1370.
Five years. Yeah.
Jason Jacobi, CFP® (18:34.886)
Nvidia, they are the Titan of semiconductors now. Okay. So I want to break down some numbers and get your thoughts on this and what you’re kind of seeing as well. So if you leave in date back to a few years ago, 2018 majority of their business. So me as a kind of a tech nerd on the side gaming automation, things like that, that accountants of gaming chips. So like the computer chips that go
Gaming PCs and obviously e-sports has taken off whole another subject, but Nvidia’s processors actually were like the, the status quo in the industry. Now that, that accounted for a majority of their business was, was gaming. Um, well, actually that number is falling incredibly fast. Just data centers, um, which are basically going to be able to, to house all of their.
their hardware, software, AI, it’s going to be incredible. So they’re reaching nearly 78 billion in annual sales. They’re projecting for 2025, just in data centers alone. That’s a remarkable increase from two years ago, 15 billion. So they’re at revenue, just to put this in perspective and why we’re talking about them. And again, we’ll bring this back to like, so.
Why are we talking about this? Their total revenue is expanding by 55% in the next fiscal year. That’s the estimates. 55% in one year. It was 118% surge in 2023. 118% revenue surge in 2023. Another 55% in the next year. Again, just because you’re able to basically add AI to software very quickly, if you have AI capabilities built into your hardware.
Mark Boyer (20:14.506)
Yeah, yeah, crazy.
Jason Jacobi, CFP® (20:30.246)
in your software, your software, then you can make these changes real quick. And so this it’s helping their revenue. I mean, think about how many microchips are in cars from when you first started driving. Probably none, right? When you started driving. Now I think there’s.
Mark Boyer (20:40.318)
Yeah, yeah, no. We pedaled them. It was just a bicycle. There was no cars. Horses didn’t buggy.
Jason Jacobi, CFP® (20:51.014)
Uhhhhhh
Mark Boyer (20:51.022)
Unless you can call them microchips. Maybe the horses had microchips in them, but I didn’t know.
Jason Jacobi, CFP® (20:55.414)
Yeah. So I mean, but to the point of right now, there’s going to be hundreds in like in a single car. So this is not going anywhere. Any thoughts?
Mark Boyer (21:02.694)
Yeah, they’re full of, no, it’s it’s, uh, it’s unprecedented kind of, uh, it’s a Renaissance. It’s, you know, some people have called it, uh, you know, um, a mega cycle for tech going forward. Uh, you know, um, you know, we’ve, it’s a, it’s a, it’s a whole different deal. And, um, and you gotta be, uh, you gotta be invested there in some capacity if you’re looking for growth. Um, but this is, this is a place that’s going to impact.
Jason Jacobi, CFP® (21:17.702)
Hmm.
Mark Boyer (21:32.438)
both positively and negatively a lot of different places. And so I think owning those stocks, yes, you’ve made a ton, there’s lots of companies to buy in those spaces or around those spaces, but there’s gonna be a lot of, there’s gonna be a breadth of opportunities in all kinds of industries from AI. That’s why it’s kind of, they call it a renaissance. And so it’s gonna be really fun to watch and fun to be a part of. I think, you know.
As I think about this, Jason, you know, looking back years, you know, went through the 1999 or late nineties, early 2000, you know, kind of tech rec in those days. It was like anything that had a.com, you know, name to it was basically going to be the next, you know, incredible company. And so, but those companies had no earnings. And I think what you’re talking about and sharing with our audience today is like, these are legit companies that have legit earnings. So it’s not like
And the earnings potential is massive still going forward. So it’s not like, it’s not the nineties. It’s like, eh, Mark, this is it. You know, it’s people ask, you know, is this good tech rec? Doesn’t look like it. And does that mean they can’t go down and they don’t get overpriced? They’re really expensive, you know, and a P rate multiple. But, but the fact is, you know, it’s not like that period of time where it’s just, you know, there were no earnings at all. I mean, it was just all hype.
These, um, these will have its own type of hype in the markets, but yet at the same time, there’s something behind it. Um, I think the key will be to investing in the companies that other managers that we’re using are really finding ways to look for opportunities from AI that are in places that nobody’s thinking about, you know, and that’s kind of where you want to be going forward too. So kind of a great, it’s a great, uh, it’s incredible. Like I said, it’s going to be interesting to watch. And then the other side is the negative. I mean, there’s a lot of.
Jason Jacobi, CFP® (22:59.632)
Yes.
Jason Jacobi, CFP® (23:14.118)
Mm-hmm. Yeah.
Mark Boyer (23:24.29)
You know, AI is going to cause job loss in lots of industries, you know, that can be now automated. I mean, um, you know, uh, there’s, you know, there’s just, there’s some danger and some things around it that if, you know, it’s hard to regulate, but it needs to be, um, in lots of different places. So that’s a lot of things that are out there with, uh, with the, with the AI, you know, renaissance, I would say, or mega cycle it’s going to be, you know, there’s, there’s a lot of things still to play out.
Jason Jacobi, CFP® (23:42.676)
Yeah.
Mark Boyer (23:54.046)
Nvidia is on the top of that whole deal and it’s amazing to watch that company roll.
Jason Jacobi, CFP® (23:54.086)
Exactly.
Jason Jacobi, CFP® (23:58.746)
So their value as of now is around the valuations about $1.3 trillion, which is more than double to its closest chip making competitor. So just shows you again, they’ve got the cash they’ve got, which obviously, and honestly, sorry is, is it’s a rising dividend as well. It pays a raise rising dividend. Excuse my English, but, uh, which is great because they’re rewarding their shareholders for investing in their company. Um, and so they’ve grown the revenue, you know, every
Mark Boyer (24:07.603)
Yeah.
Jason Jacobi, CFP® (24:27.694)
every year for the past three years or even past five years, um, to be dating back to whenever they started their dividend. I don’t have that off the top of my head, but it’s, it’s really good. So very healthy, strong sound company leading the way other ones, Microsoft, Apple, Metta, Salesforce. Uh, yeah, there’s a lot of great companies again. So we’re saying you can own them and we think you should be owning them. Cause again, there’s, there’s revenue, there’s earnings to back it up. Um, but again, just entry point wise.
Mark Boyer (24:43.03)
The Mag-7, right? So a lot of them are just actually on Netflix.
Jason Jacobi, CFP® (24:57.914)
That’s always the thing, right? Don’t, don’t try to time it, but in terms of what the perceived value is, get into what that is.
Mark Boyer (24:59.262)
Yeah. Be careful.
Yeah. No, it’s, uh, it’s, um, and I prefer, you know, honestly, I would go back to the ETFs. You can buy them. Um, I mean, I think we’re, we’re active managers, you know, we, you know, and we use active managers that, that I really feel confident are digging into this in a deep way, talking to the CEOs and CFOs. I think that’s really important cause you know, the, you know, the mob can jump in and do things based on not with a lot of information or knowledge.
Jason Jacobi, CFP® (25:21.494)
Yeah.
Mark Boyer (25:31.946)
I think it’s really, I think it’s going to be really important in the years ahead to have people working for you on your team that actually have the knowledge and have the ability to get the information and dig into these companies that, you know, you just can’t, you know, Google and get, you know, what, you know, what is, you know, what is, you know, is it a bias, you know what I’m saying? Like you got to, you got to do your research. So, so we try to do, but also, you know, we realize that
Jason Jacobi, CFP® (25:54.971)
Got to.
Mark Boyer (25:59.618)
And we’re not prideful. I think we have all the answers. We, you know, there’s a lot of smarter people than us a lot, a lot of them. And, uh, and the fact is we try to gain access to them and have them help us figure this out. So real important, I think going forward as investors.
Jason Jacobi, CFP® (26:15.958)
Absolutely have a thoughtful approach to investing whenever you do. So last thing we want to talk about real quick is the SEC, which is the securities exchange commission approved Bitcoin ETFs, approved nine of them, I believe. So, uh, the world of cryptocurrency has been a large talking point for a lot of tech savvy investors. There’s been a lot of criticism over it, security concerns, um, central centralization of it actually, which is.
Mark Boyer (26:19.492)
Excellent.
Jason Jacobi, CFP® (26:44.878)
You know, a lot of people talk about it being decentralized. There have been avenues by which that has become not the case. Government seizing or taking control of certain assets. So that’s always the battle, but, but overall, I think this is just going to open up the opportunity for investors to be able to get in and instead of having to physically own the Bitcoin or the crypto and utilize a wallet, a digital wallet and keep…
key codes, passwords, encryption, all that kind of stuff, like where it’s a lot more falls on you or maybe security wise, it’s not the strongest and can be stolen very easily. Um, and again, this is just a generalization there, but maybe this is a way for you to get in and test out the waters, puts a part of the portfolio into this and let the big dogs such as, uh, you know,
Grayscale who, who converted their Bitcoin trust, uh, GBTC, which I think is the ETF symbol, but they now own the physical assets. So they became a spot ETF now. So let those big dogs encrypt, you know, have the top Fort Knox style security so you really don’t have to worry about it. So again, always say be cautious with stuff like this. Again, it’s, it’s the wild West for crypto. Still, it’s been a lot of run-up. It’s done incredibly well in terms of total return.
But again, just words of caution, still be ready to lose the money because of the fact that it could fall out. I mean, we saw last year it was down over 75% at one point from its highs. Obviously it’s come back a ton.
Mark Boyer (28:25.334)
Yeah. No, you nailed it, man. I’ve got clients in the GBTC, Grayscale Bitcoin. Those who are interested in this, this is kind of where I go for it. You know, ETF and yeah, I think it’s, I think it’s still, you know, we just talked about AI. I don’t see, you know, still juries a little bit out on the Bitcoin deal. But with this, with this information, it just opens up the opportunities for more people to gain access with, you know, without.
having, like you said, to have the wallet. So it’s, yeah, it’s a good thing. Again, what’s great about, you know, so it’s great about America and about our system is that we have, you know, they find ways for us to be able to invest and you just still got to invest with wisdom and with diversification and all those things, you know, because if you look at a chart, you know, of Bitcoin, it’s pretty volatile and has been, but doesn’t mean, you know.
Jason Jacobi, CFP® (29:10.079)
Yep.
Mark Boyer (29:21.622)
So I think these ETFs, not really new, but these ETFs and this approval of this opening up just going to get more people involved, which could be beneficial. It was interesting yesterday, the market on grayscale popped up on the news, boom, over 40 bucks a share. And then today’s pulling back 38, right? So again, this thing’s pretty dollar cost averaging. You can kind of read it like a stock in a way and trade it.
Jason Jacobi, CFP® (29:39.321)
Yeah.
Mark Boyer (29:50.338)
So it’s interesting. Good stuff.
Jason Jacobi, CFP® (29:52.406)
And I’m going to say one controversial thing to some of my tech clients or crypto believers, Bitcoin believers. Again, if you think that the governments of the world are going to let you take their currency away and make this the currency, you’re out of your mind. The US dollar is not going away. It’s king dollar. The world’s currency is king.
Mark Boyer (30:13.529)
Tell us what you really think. Out of your mind. Yeah.
Jason Jacobi, CFP® (30:19.61)
The world’s currency is still the king dollar. There are some efforts to take that down, but in the near term, there’s no better country in the world than the US in terms of economic stability and growth potential. Again, growth and innovation comes from America for the most part. Again, I’m not saying other countries are bad or whatever, but when it comes to where we’ve come from and the…
ability to grow and innovate and really kind of achieve our God given potential, America is the place. So that’s why everyone wants to come is because this is still the beacon on the hill. So I would just say that Bitcoin won’t take the place of it. It’s going to be an other thing of it as an alternative. It’s a way to make potential make potentially make money. Blockchain technology, which is behind all the cryptocurrency is absolutely fantastic.
a game changing technology, which we can get into in another time. But really just wanted to bring that home is make sure your hopes are realistic and make sure that you’re thoughtful and your approach to that type of investing as well. And say, Hey, you know, I make tons of money. Great. We want you to make money, but you just got to realize what it is and what it isn’t. Okay. So it’s, it’s a currency play in terms of you’re buying the fluctuation of the price trades like a stock.
And if you can buy it alone and you want to sell high, just like every other, every other type of asset.
Jason Jacobi, CFP® (32:03.677)
Yeah. Yes.
Mark Boyer (32:11.668)
Everything else,
Jason Jacobi, CFP® (32:11.984)
100%.
Mark Boyer (32:19.366)
And our government that understands that and doesn’t, you know, yeah, just keep throwing money at, uh, you know, things that aren’t, aren’t done efficiently and aren’t, aren’t good. So that, that’s my biggest concern is internal, uh, you know, that’s screwing ourselves up. Um, you know, a lot of times in, in sports, you see that where you’ve got a team that’s got a lot of talent, got all the talent in the world, but they just can’t get it together in the locker room and do the right, make the right decisions there. And that’s kind of like, it feels like sometimes with, with us, um,
Jason Jacobi, CFP® (32:31.798)
Yep. Good point.
Mark Boyer (32:49.246)
in America. So right now we got to, yeah, we need to have a leadership that gets more spin thrift on our government. That’s incredibly important. So sorry, went a different direction, but that’s my biggest concern right now. And then to that point on the dollar, just real quick. So, you know, you didn’t talk about it, but in here, you know, global economy expected to slow. That’s, you know, that’s accurate. It’s been that way for a while. You know, it’s been that way and we see it happening. But just remember that couple of things. One is
Jason Jacobi, CFP® (32:58.67)
Yep, good points. Good points. Great points. Yeah, you’re right. There’s internal and external force.
Mark Boyer (33:19.522)
The markets in those areas often will move ahead of the draw or the trough in, you know, in, in GDP and each of the, what I mean is that just because those things are looking, those areas are looking to slow, doesn’t mean you shouldn’t be invested there. Okay. Because, or have some type of, because when, and if they do bottom out and begin to, uh, to move the market will have already moved ahead of that period of time, that’s what I’m saying. So.
That on top of the dollar, what you’re just talking about dollars really drop fairly, that’s not significantly, but it’s had a drop in here since the rates have come down and again, that’s a real benefit to holding international equities or bonds. Uh, if the dollar drops, you know, your exchange rates change and it’s a, it’s a added benefit to being, uh, diversified even globally. So that’s our take on that too. All right. Thanks, Jason.
Jason Jacobi, CFP® (34:12.954)
Perfect. All right. Thanks Mark. Always appreciate your wisdom and insight. We’ll see you next week on the next edition of The Closing Bell.
Mark Boyer (34:23.4)
Sounds so good
