A Strong Start to 2024

In this conversation, the hosts discuss various economic and investing topics. They provide a market update, discussing the performance of the S&P 500, Dow, and NASDAQ. They also talk about interest rates and bonds, emphasizing the importance of diversification and having a financial plan. The conversation touches on China’s economy and its impact on global markets. They also discuss the current state of the US economy and inflation. The hosts highlight the importance of being informed and making wise investment decisions in uncertain times. They conclude by discussing the role of domestic and international buyers in the bond market.

00:00 Introduction
01:08 Market Update
08:33 Investing Strategies
13:19 Interest Rates and Bonds
16:43 Uncertainty and Diversification
22:04 China’s Economy
27:08 US Economy and Inflation
35:43 Domestic and International Buyers

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All performance referenced is historical and is no guarantee of future results.

All indices are unmanaged and may not be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Investing involves risk including loss of principal.

Jason Jacobi & Mark Boyer are registered principals with, and securities and advisory services offered through LPL Financial. A Registered Investment Advisor. Member FINRA/SIPC.


“Salt of the Earth” (00:09.602)
Salt of the Earth. That’s what we put on my name. Is that my new name or what? That’s a good one. So when I think about Salt of the Earth, I just think about… I mean, when you say somebody’s Salt of the Earth, it just… It kind of means like they’re old. Right? Is that what that means? Or they’re…

What does that mean?

“Salt of the Earth” (00:37.969)
Okay, all right.

“Salt of the Earth” (00:41.746)
East all of the earth. All right. That’s my name today. Salt and pepper here, right? It’s fun to be together. So it’s great. What’s pepper? Well, pepper is a smite. Oh, okay. Yeah. I got the pepper here. I got the salt here. Here we go. All right. Good stuff.

“Salt of the Earth” (01:08.514)
been going through man. Yeah, it’s rolled. It’s rolled through our family, right? And so we hope everybody listening here is doing better and healthy. It’s yeah, it’s been a tough one. And it’s kind of wild. It rolls through and in some, you know, especially with you because you got the little kids, right? And then they get sick. And then they pass it to the next one. But it seems like they’re not all sick at the same time. So it sort of rolls and then time goes on. Right. So it’s a button.

“Salt of the Earth” (01:59.046)
Yeah. I mean, we’re off to a solid start. You know, Dow and S&P been hitting highs and Nasdaq’s, you know, creep it up on one. Want me to share, we can actually take a look at it, do it and see what we got here and show that a little bit. So here’s the S&P 500. This is a weekly chart if you’re

If you’re watching us and you can see it, that’s great. But you’ll see, so this is a weekly chart. So every one of these red or blue lines represents a week. Okay, so this chart actually is going back to 2016. It shows you what the market has done during that period of time. What’s really interesting is just to look at is here back in late 2021, you can see here that, or yeah, the S&P had a high of 48.18.

And that, now you look across to the right, from there we pulled back, 2022 was a rough year in the stock market as the Fed continued to raise rates. We had a series of downtrends, tried to recover. We ended up down at 34.91, which hit in actually October of 2022. And then 2023, we had a solid year as everybody’s seen in there.

their portfolios in the stock part of, you know, it’s been fairly solid, although a lot of it’s been Magnificent 7, you know, a lot of these specific tech stocks, but overall the market itself, the S&P is, is moved back up. We had a pullback here starting in, in July of this last year that lasted until, you know, November, December, but November 1, you know, basically we talked about, remember we were talking about October is usually a bear, a bear killer.

And sure enough, the markets hit a low in late October, and started from November, started to really move up. And then really exploded actually in December when Powell came out and they basically said they were done raising rates for a while. And so the market really left that. And so it’s continued into the year. And so the key test was at 48.18. And you can see if I put a line there of that old high, okay, back to, we can see that over the last about three, four weeks ago.

“Salt of the Earth” (04:21.522)
the S&P actually broke into new highs. And so it’s interesting technically when indexes, when stocks hit new highs, they just pile on. The sellers are gone. Anybody who was selling to try to get their money back is usually out. And now everybody’s making money. And you’ve seen some of that cash we’ve been talking about probably coming off the sidelines to…

to be a part, because there’s that fear of missing out. So a lot of people haven’t participated. So it’s key. You see that. So the S&P is hitting highs. Here’s the Dow. Same thing with the Dow. You see that the Dow hit 3692 back in late October. And now we broke that here. Again, a weekly chart. That one actually broke into new highs about six, seven weeks ago. So that one’s actually been doing better. The Dow, which is index of 30 stocks, industrials.

Key big companies, multinationals has really been up. And today, this week we’re up at the other 19. The interesting one, Jason is the NASDAQ. So NASDAQ is one that everybody, they follow basically. It’s loaded with tech stocks and all these, all types of great companies there. What’s interesting about this index actually is that the high was 16,212 back in October.

November, I should say, 21 or late 2021. And and we have now just getting to that today. Right at 16000, which might be it’s the only index so far that hasn’t hit a high aside from the Russell 2000. But in regards to the larger indexes, that’s the one that you just sort of we’re getting this pull to about 16 to 16 to it’s going to be very interesting to see if the NASDAQ can break into new highs past 16 to so.

Anyway, I mean, you know, we said in one of our last calls that we thought, you know, there’d be high single digit returns overall in the markets. And it looks like, you know, we’re going to at least get to that here early in the year, you know, barring any unforeseen things. It’s really interesting to see just how it’s almost like a magnetic pull that, you know, the markets come to these resistance points. And then at some point, if they break them, you can see a follow through in market continue. So anyway.

“Salt of the Earth” (06:44.61)
thought that would be interesting to show our listeners and viewers today. But that’s kind of where we’re at right now.

“Salt of the Earth” (08:33.696)
It is.

“Salt of the Earth” (08:43.006)
Yeah, crazy. Yeah. No, some particular companies look, you know, look stretched those magnificent seven stocks. I mean, Nvidia is still hitting highs. Super micro. I mean, there’s some companies that are just rolling here. But again, I want to stress that you’ve been in this business a long time and lived through the 99 2000 2001 the tech, you know, the bubble they call it now historically where everything rolled over the dot com era.

Um, one huge, you know, a lot of people are trying to compare, uh, you know, this time to that and, you know, you can make comparisons, all that it gets when it gets so frothy that everybody’s just like a genius in stocks because you, whatever you buy, it goes up. And so, you know, there’s all those things that I’m watching for. I don’t see it yet in, in people’s attitudes or whatever. But, um, but the one thing that, you know, I’ve been talking to people about in this case is that the rally is, is that this is an unlike.

that period and because the companies that are rolling have incredible earnings. Okay. We talked about the AI kind of transformation. If they have incredible earnings and back in the dot com in the late nineties, early two thousands, it was just, if you had a dot com on your name, like you just bought it because it was new and it was going to go and they were losing money. These companies would be losing money like crazy, but their stocks were just rolling. And so.

Not saying that we could get a significant pullback at some point, but it’s different that way in that, you know, earnings have always been the thing that drives stock prices because you’ve got to watch the earnings. And when you have earnings like we do in this transformational new industry with AI, you know, love it or hate it. It’s a reality is that there’s a lot of sales and money’s changing hands there and these companies are making huge bucks. So what we just want to see in the markets is that it always the markets are always

you know, bringing in other people, right? Other companies, it’s a broad based rally, not just a, you know, as, you know, seven companies or six now Tesla’s out of it. But, you know, you’ve got these certain companies that, you know, that everybody is sort of, you know, all, you know, the, uh, the tides come in and everybody, all the boats are rising. That’s, that’s a very positive, strong, cause a lot of the companies that haven’t moved so much are, they got good earnings and their P ratios back to what you’re talking about.

“Salt of the Earth” (11:07.03)
their P ratios are actually fairly low. There’s still some value, a lot of value in some of these companies. So we want to see those kind of moves. So you want to see the industrials move. You want to make sure small caps. That’ll be a key. I mean, watching the Dow, I’m sorry, the Russell and the small companies are going to be really important as well, because that’s one area that’s not necessarily hit, not hitting new highs yet on the Russell. And yeah, yeah. So it’s.

Yeah, so that one’s basically flat. It had a high, I’m not gonna pull that, but this last talk, December, we hit a high on the Russell of about 2071 and we’re at 2009 right now. So, we’d like to see those small camps, which those to be a part of this would be again, showing some broad base benefits to this rally.

“Salt of the Earth” (13:19.368)
Yeah. The

That’s kind of the challenge right now. So we got to keep an eye on that. And, you know, as far as the, you know, um, you know, it’s another area we need to watch in the kind of the 10 year treasury. Um, you know, we’re right now we’re, you know, 4.1, 4.2% roughly. Um, you know, really hoping that doesn’t bust up, you know, passed back up into the fives or 4.2 beyond. Cause you know, that would be.

That could be a negative thing to pull the markets down and be hard for small caps, especially in those areas But so we kind of keep an eye on that too That’s why we need the small caps to participate to show longer-term strength here. I think

“Salt of the Earth” (14:06.712)

“Salt of the Earth” (14:15.242)
Yeah, I mean it, yeah, absolutely.

“Salt of the Earth” (14:54.369)

“Salt of the Earth” (16:43.585)

“Salt of the Earth” (17:12.438)
Yeah. So, yeah, I mean, nobody knows what tomorrow brings. None of us do. I mean, it’s not just investing. It’s like, you know, it’s living life, right? We don’t know. We just don’t know. I mean, only God knows what’s going to happen, you know, in the next couple of minutes. And that’s why, you know, we just got to trust him on those things. But in regards to, you know, in our personal lives, but in regards to this, I mean, you know, I always think about Warren Buffett, right?

investor and like, you know, they give them all, is he a salt of the earth guy? I don’t think they call him salt of the earth. But, you know, he’s, he said one time basic and I’ll paraphrase, like, we have no idea what’s going to happen in the next three months, next couple of quarters. We have no idea. He said, but we do our research, you know, you do your research, you do all those things in order to try to pick good stocks, but nobody knows. So.

I think that’s, excuse me. I think that’s why, you know, diversification, um, having people help you, you know, make decisions. Cause sometimes if we’d make, if we’re investors and we’re, you know, just doing it ourselves, you know, you have a tendency to, yeah, you can make a lot of positive moves, but overall, I wonder how much you hurt yourself versus, you know, getting, you know, good counsel from other people. That’s what, that’s what I love about this is being able to help people, you know, maybe provide some counsel to them.

about how they do their investing. So yeah, it’s not unusual. We’re wrong. I think in this case, you and I, we’re talking about, we thought higher for longer. We were talking about a rolling recession, things that some other people hadn’t talked about perhaps. And a lot of people have, we’re not singled out, but there’s been many times where I’ve been wrong about what I think is gonna happen. That’s why I think diversification,

having a timeframe, understanding what you’re, having a financial plan to know exactly like what’s our, what’s our goals, those things. So all of that’s important because we just don’t know. We just don’t know. So that’s, yeah. But we can get a good idea, but right now, I mean, it’s interesting watching.

“Salt of the Earth” (19:32.81)
the 10 year yield and so forth, we’ve been talking about bonds and it’s a great time for bonds because if the interest rates do drop, which by the way, we still think they will, but we’ve been saying higher longer too. But how about if that doesn’t go the way, I mean, how about if things kick in and inflation stays high and it’s possible they have to raise rates again. I mean, it’s very possible. And so we’re not having, we haven’t.

Cut that out. I mean, that’s very possible, but, um, you know, that’s why you got a risk reward, right? Trying to figure out those things. It’s, it’s important to be, I think, just diversified in this whole thing. That’s, I can’t preach that enough. I mean, I think great wealth is made in specific stocks and, you know, um, you know, we got, we got clients that, you know, made a good, you know, uh, they worked for a particular company or whatever, and they’ve gotten stock options and that company’s done really well. And they’ve accumulated.

a lot of wealth, but especially when you get in retirement, it’s just so important for us to be diversified and trim some of those areas maybe in diversifying to some other things that can also do well, but give you some yang when the other thing yangs, right? Or whatever, whatever that however you want to say that, that you’ve got things that are offsetting the risk proponent of that. That’s really important, especially as we’re getting older.

mitigating risk as much as possible.


“Salt of the Earth” (22:04.426)
Yeah. Well, yeah, so look at those little blue squiggly lines, whatever it looks like from where we are right now, based on that. You know, there are some people or I don’t know where these are coming from. Honestly, do you know, like, who’s making these expectations?

“Salt of the Earth” (22:22.053)

“Salt of the Earth” (22:26.762)
Yeah. So, you know, we’re still in that range. It looks like possibly whoever that, you know, is closer, but those first ones are really wrong. Yeah. But I just say this like so for the normal person, right, Jason, I mean, you know, I was at Costco the other day because my wife and I go, it seems like I’m glad I bought Costco Scott years ago because I spent a lot of money there with our family. But but man, I mean, you know, meat prices, everything’s, you know, further. It’s not.

You know, we talked about this, the difference between disinflation and, you know, and, uh, we sat all those things, right? About the fact that it’s just still, it’s really expensive to just get basic food items. Um, you know, gas come down a little bit, but you know, for a lot of us, we’re still, I mean, that inflation number is really, you know, it’s really eaten away. So all that to me, I’m saying is that it’s, uh, it’s interesting, you know, just the, that, that inflation situation is.

still there and things are still, there’s certain items that are still going higher and higher. And that could be another subject. We could focus on that in less. But anyway, so anyhow, all the point is, is I think, it’ll be interesting to see when in fact rates will start coming down. And the market, watching the 10-year yield, I mean, the market is pretty good at, and they’re not perfect either because they don’t always get it right, but you’ll see that right now.

There’s still some question as to whether it is going to, you know, when they’re going to cut rates based on what’s been happening, what Powell said recently, there’s some things there. So it’s going to be, yeah, it’s still really interesting to see what’s, what’s up, but still think longer term rates will come down, but we just don’t know when they’ll start doing that. Right.

“Salt of the Earth” (24:24.622)
You’re talking about making that move to in bonds, fixed in to go more duration. Yeah. That’s what we preached about the dollar cost averaging because you don’t know. You can do that in small bits, dollar cost averaging into more duration. Because again, the short-term rates are still pretty strong. I mean, they’re still, you know, so for cash needs and for those people that are super nervous, yeah, you can still, you know, ultra short, you know.

short duration stuff, whatever that can still be beneficial. But again, really wise to have not all your eggs in that basket, start to dollar cost average in the duration. And we talked about the bond math last time because that can be really huge, huge win for you as an investor the next 12, 18 months if rates do drop in fact, as much as we anticipate it will.

“Salt of the Earth” (27:08.878)
Thanks for watching!

“Salt of the Earth” (27:52.77)
Thanks for watching.

“Salt of the Earth” (28:53.93)
Yeah, so I’m not going to pretend to be any expert on China or, um, you know, what’s going on. All I, all I know is that, you know, they have some, they do have a crisis happening with, uh, you know, I think a lot of the, uh, you know, years of putting limits on how many kids you could have, uh, you know, and, you know, they’re, so they’re young people coming up. There’s, there’s a lack of, uh, workforce. And at the same time, there’s a huge, huge amount of, uh,

As I understand is the, you know, that younger generations aren’t finding jobs because, you know, China, the economy is just struggling and you’re going to have commercial, uh, you know, commercial companies and commercial loans that are, you know, it’s just, uh, it doesn’t sound like it’s very good there, they’ve stretched their, their spending out in lots of places and, um, you know, it’s, uh, it’s, it’s not looking.

Positive there. So we you know, that’s probably why they you know, why have they sold off so many treasuries then, you know, you know Pulling money out, you know, because the economy again is so weak It’s it’s just it yeah, it is an interesting place and you know, they’re becoming less of a force on the international You know in this space but at the same time I know that they’re

I, you know, their ideas or their goals are still to become, you know, one of the largest, you know, the largest economy in the world. And, you know, it’s all about overtaking the U.S. I think part of the ways you’re talking about in the foreign buying is that I think, you know, we hear a lot about the demise of America and I’m, you know, I think we have a moral, we have a lot of issues going on and moral decay that’s happening here. I’d encourage anybody, you know.

I’ve been reading my Bible and Revelation and reading some stuff on just old prophecies. It’s really interesting. I mean, I don’t know, as a Christian, I mean, I’m like, wow, it’s kind of crazy how a lot of things are lining up based on biblical prophecy. But again, we don’t know when the Lord returns, if He does, and what’s going to happen next. But it’s, you know, so you can look at it from that perspective. You know, there’s a lot of people looking at our country and saying, you know, that we’ve

“Salt of the Earth” (31:11.114)
We’re not who we were, and that’s true in a lot of ways, but it looks to be based on the things that are happening. It’s still, and look at our border site today, right? I mean, we have a border crisis like no other, but in a way, even investors are wanting to get it and be a part of, you know, they feel safe in the US and the opportunity there. So I think, you know, part of the auctions, you’re looking at that as a…

you know, a desire to hold and be, you know, invested in the US. It’s one of the safe havens still. Um, you know, that looks like, uh, that, you know, we’re here to, you know, there’s a lot about the dollar and a drop of the dollar and how, you know, we have, uh, there’s, you know, the fact is, you know, we spent so much money and printed so much, but the dollar has really lost a lot in value. Um, and that’s true, but yet at the same time, it’s still on the national.

Internationally still the strongest, it was kind of this still the currency of choice, you know, I don’t know that always be the case, especially if we continue down this road we’re headed down. Um, uh, but at the same time now it’s, uh, it’s still, it’s still that. So, um, I think, you know, yeah, I think when we get our house in order, it’ll be even stronger, um, but that’s, you know, you know, the key is in, uh, yeah. So just when you’re talking about economies and how you run a country like China,

the way they want to run their country. You know, I just think capitalism, you know, when it’s done right and there’s freedom in it to let people work hard to earn money and to take care of their families and to have less government involved in regulation and so forth, it’s proven to show that it produces wealth, not only for, it kind of across all the, you know.

across the board, not just the rich are getting richer, but even those that, you know, didn’t have jobs now are getting jobs. And even the poor, you know, we saw, you know, a few years back that actually everybody was, you know, it was all going up. Yeah. But now we, you know, now it’s so it’s interesting. It’s, you know, we got a lot of geopolitical issues and political issues here. But good news is at the current time, we’re still, you know, looking to be the

“Salt of the Earth” (33:31.522)
place where people want to invest. Japan, you know, you mentioned Japan is, you know, we’ve been talking about Japan. That’s an area internationally. They’re starting to really do some good things in Japan. Their economy is picking up and we’re hearing more and more about the fact that from our, a lot of our advisors, people we’ve worked with who are doing investing and looking into companies, you know, around the world, they’re finding incredible opportunities in Japan, which is kind of interesting, you know, right? And so they’re.

Yeah, so they’re investing in the US too. And and yeah, it’s really it’s weird that you know, and that’s not a that’s a good thing. You know, Japan to me, I like hearing that Japan’s involved with, you know, buying some of our treasuries versus the China deal right now until they get their act together.

“Salt of the Earth” (35:43.402)
Yeah. And that’s interesting that you even have less domestic buyers. Cause I think with all that cash on the sidelines, right? We talked about what five, $6 trillion, you know, I don’t know. Yeah. They are going more risk on, but again, as rates start to drop, you know, we feel like that a lot of that’s going to go into more duration in the fixed income markets as well. So, um, again, that’s why, that’s why diversified portfolio. You got to have some duration in that side and not just be in treasuries or just being CDs, just being all, you know,

Um, spread it out. I mean, uh, you know, take advantage of the, of the, uh, opportunities that might present themselves here. So yeah, all good, man. It’s good stuff. Good.

“Salt of the Earth” (36:31.342)
Thanks, Jason. God bless you guys.

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