Your Halloween Costume’s Financial Personality
by SGL Financial
Our 2 Cents – Episode #231
Your Halloween Costume’s Financial Personality
Spooktacular alert! Today on Our 2 Cents, the Lewits unmask what your Halloween costume says about your finances and their take on whether the AI boom is more illusion than innovation. Listen in now!
- Your Costume Financial Persona:
- Bold costume, bold spender? Or frugal in disguise? Let your Halloween costume reveal your money mindset.
- AI Bubble?:
- Is the AI buzz more of a trick or a treat? Hear what Steve and Gabriel think about all the AI boom chatter.
- Quotes of the Month:
- “Retirement is what you do between doctor appointments.” — Unknown
- “The best way to teach your kids about taxes is by eating 30% of their ice cream.” — Bill Murray
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847.499.3330
Podcast Transcript
Announcer: You are listening to Our 2 Cents with the team from SGL Financial, Building Wealth for Life. Steve Lewit is the President of SGL Financial and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.
Gabriel Lewit: Hello everybody. Welcome back to Our 2 Cents. We’ve got another spooktacular-
Steve Lewit: Oh, no.
Gabriel Lewit: … episode for you for this Halloween month. I did it.
Steve Lewit: Is that how we’re going to start?
Gabriel Lewit: I used it. I had to.
Steve Lewit: A spooktacular podcast.
Gabriel Lewit: Of course.
Steve Lewit: Oh my gosh.
Gabriel Lewit: Could it be anything but in Halloween month?
Steve Lewit: Save me. Save me. This should be fun.
Gabriel Lewit: Yeah. I do love seeing the Halloween decorations out there. It was funny. I took my daughter to Walgreens last night and she’s walking in and there’s this big witch thing standing there.
Steve Lewit: Yeah. Did she get scared?
Gabriel Lewit: Well, so she went to walk by it and I don’t know if it was-
Steve Lewit: Was this the youngest or the middle?
Gabriel Lewit: The middle. The Audrey. So she went to walk by it and for the first two seconds, just about two seconds, it didn’t do anything. And then all of a sudden it was like, “Ha ha ha,” just started laughing and she jumped like two inches off the floor because I think you think… It’s almost like you think they’re going to do something when you walk by them, but then they timed it so it just didn’t for long enough. But then it did. And it spooked her which was great. I laughed. I laughed.
Steve Lewit: Do you know we have-
Gabriel Lewit: Then on the way out she was playing with it.
Steve Lewit: Now do you know that we have someone on staff here that is a major, major Halloween addict?
Gabriel Lewit: Yes. We’ve talked about Katie’s Halloween obsessions before. The pumpkin that’s up front that she self-grew in her garden.
Steve Lewit: Halloween OCD.
Gabriel Lewit: Yeah. So I believe her favorite movie is Hocus Pocus and she watches it three times a day every day in Halloween season.
Steve Lewit: Oh my gosh.
Gabriel Lewit: Just kidding.
Steve Lewit: Just kidding. Just kidding.
Gabriel Lewit: Well, with that in mind, we wanted to talk to you about a very important study that is absolutely not rooted in factual data whatsoever, but we’re going to pretend like it is of how your Halloween costume dictates your financial personality.
Steve Lewit: This is a stretch, folks, but we’re going there. We are taking off on imagination.
Gabriel Lewit: And then we have some real financial things to talk to you about that are spooky in their own way that we’ll get to here in a bit. And then we’ll round things out today with maybe some quotes of the month or some topics about debt planning, which we haven’t talked about in a bit.
Steve Lewit: So exciting.
Gabriel Lewit: Well, it is a personal finance show.
Steve Lewit: It is.
Gabriel Lewit: And a financial planning show.
Steve Lewit: I don’t know when you say we’re going to end it up with debt planning, it’s like I said to myself, “Really?”
Gabriel Lewit: Well, yeah, you’ll see. We try to make things entertaining no matter what they are.
Steve Lewit: Let’s have fun with it.
Gabriel Lewit: Sure.
Steve Lewit: All right, let’s go.
Gabriel Lewit: All right. Okay. So you are at your local Halloween costume store. You’re trying to pick out your costume, or maybe you’re on Amazon shopping for it online. And what do you pick? What does it say about you?
Steve Lewit: Yes. Because it’s psychologically connected to-
Gabriel Lewit: Does it mean something? Does it mean nothing?
Steve Lewit: … about your personality?
Gabriel Lewit: Right. Nobody really knows.
Steve Lewit: Yeah. Why am I dressing up like the devil or a hero or Superman?
Gabriel Lewit: So, let’s say your go-to is the scary genre of Halloween costumes. So you’ve got gory makeup. You’re a creepy zombie. You’re a super freaky clown. I don’t know. Which, by the way, those are the worst. The clowns, like the creepy, freaky Halloween clowns. Yeah. Not a big fan. So what does that say about you?
Steve Lewit: I don’t know.
Gabriel Lewit: Well, I’m asking you, Steve.
Steve Lewit: It says I like to scare people. What does it say about my money is what I’m trying to think. I’m scared about money?
Gabriel Lewit: Well, as I’ve said, these are absolutely not rooted in any factual logic of any kind. But I would say that that means you like market timing. You’re in for the thrill. You’re trying to do things that could be a little bit scary but could pay off in a big way. You get a big jump scare. So that means you’re a market timer.
Steve Lewit: So, you put on the costume and you’re scaring yourself too.
Gabriel Lewit: Sure.
Steve Lewit: Okay. I’ll stretch there.
Gabriel Lewit: Well, when you make that big bet, if you’re a market timer, it’s, “Is this going to work?”
Steve Lewit: It is scary.
Gabriel Lewit: “Is it not going to work?” It’s a little scary.
Steve Lewit: It is very scary. Well, although market timers don’t think it’s scary.
Gabriel Lewit: Well, some people still do. You make a big enough bet. Let me put it this way. You go to the casino, you plop down 20 bucks on the roulette wheel. Are you too worried?
Steve Lewit: No.
Gabriel Lewit: No. You go down there, you put 10 grand isn’t, you’re going to be a little concerned. You’re not going to be not worried. You want that bet to pay off.
Steve Lewit: Can you imagine playing blackjack in a Freddy costume?
Gabriel Lewit: You sure could if you wanted to. They may kick you out or they may not let you in.
Steve Lewit: Yeah. I’m afraid to make this bet.
Gabriel Lewit: Anyways. Okay. Again, that’s not rooted whatsoever in science, but that’s my go-to.
Steve Lewit: That’s a very big stretch.
Gabriel Lewit: Okay, well, how about… Let’s say you’re… Typically, this would be a lady that chooses a cute outfit instead of the gory scary.
Steve Lewit: Yes.
Gabriel Lewit: Okay. Maybe you’re a tooth fairy, ladybug or a poodle or a little dog outfit or something that would fall under that cute kind of category. What does that mean for you?
Steve Lewit: She’s buying CDs. She’s buying CDs.
Gabriel Lewit: Buying CDs.
Steve Lewit: She’s cute. She’s gentle. She’s cute. Life is not problematic. She doesn’t-
Gabriel Lewit: Easy-going.
Steve Lewit: Easy-going.
Gabriel Lewit: Nothing to worry about.
Steve Lewit: CDs. Yeah.
Gabriel Lewit: Maybe you’re buying CDs at the bank.
Steve Lewit: And bonds. She has the CD and bond portfolio.
Gabriel Lewit: Okay.
Steve Lewit: Definitely.
Gabriel Lewit: There you go. 100%, right?
Steve Lewit: Yeah, absolutely.
Gabriel Lewit: No doubt about it. Okay, well, let’s say you forgot to plan a Halloween costume at all and you realize the party’s tomorrow night. And what do you do? You go rifling through your drawers. Maybe you find your Hawaiian shirt because you’re going to be-
Steve Lewit: That you haven’t worn in like 10 years.
Gabriel Lewit: You’re going to be a tourist. You put on a little label, like a name.
Steve Lewit: Yep.
Gabriel Lewit: What does that mean for you?
Steve Lewit: That means that-
Gabriel Lewit: I know. I know my pick.
Steve Lewit: Okay, you go.
Gabriel Lewit: I think it means you pick a target date fund. In other words, if I were to ask you what’s in your investment portfolio, you’d be like, “I don’t know.”
Steve Lewit: “I have no idea.”
Gabriel Lewit: “Haven’t had time to think about it.”
Steve Lewit: Right. “I don’t know.” Maybe there’s Freddy in there. Yeah, definitely a target date fund person.
Gabriel Lewit: For sure. For sure. Or maybe index funds, maybe just-
Steve Lewit: Something simple-
Gabriel Lewit: That you don’t have to think about.
Steve Lewit: … that rebalances automatically, a robo investor kind of person.
Gabriel Lewit: Yes. Now what if you have a very… This could go for men or women, risqué. A risqué costume, right? Maybe for a man you’re going shirtless with some wrestler outfit maybe. Obviously girls, they can wear whatever.
Steve Lewit: Oh, that’s a market. That’s someone who trades stocks. They got to win. They’ve got to show off. They got to show their muscles at a party. Look this person at a party. “Hey, I bought Apple and then I sold it, and then I bought NVIDIA and I sold that and then I made money on this.” And they’re showing off. So that’s definitely a showboat personality.
Gabriel Lewit: Got it.
Steve Lewit: Definitely.
Gabriel Lewit: And we got two last ones for you folks in case these help you with picking your Halloween costumes.
Steve Lewit: Yes. This is very meaningful for you.
Gabriel Lewit: What if you are just a classic. Okay, you’re going to be a pumpkin. Maybe a Dorothy or a witch, something not too scary, but in the Halloween spirit.
Steve Lewit: I got mine. What do you got?
Gabriel Lewit: I think this is someone that’s smart, practical, and they have an advisor.
Steve Lewit: Buy and hold investors.
Gabriel Lewit: No, I would say they have an advisor.
Steve Lewit: Yeah, they have an advisor, but they’re they’re passive investors.
Gabriel Lewit: Maybe.
Steve Lewit: Maybe.
Gabriel Lewit: Maybe. But they’re smart. They’re practical. Not too risky.
Steve Lewit: Pumpkin practical.
Gabriel Lewit: Okay, last one. DIYers. This is a tee up for you here. DIYers. You build your own robots. You duct tape it all together. You sew your own costumes. What does that say about you for your own investments?
Steve Lewit: If you’re sewing your own costume?
Gabriel Lewit: Yeah.
Steve Lewit: You need a life.
Gabriel Lewit: That’s mean.
Steve Lewit: That is mean. That was mean. I don’t know. You sew your own… You’re a do it yourselfer or you’re independent or you think you’re independent. You think you know. You probably make a lot of mistakes in the market.
Gabriel Lewit: Yeah, you probably aren’t working with an advisor, DIYer, doing your own thing, not worried about it. Maybe make some mistakes, not perfect. But you’re happy with that.
Steve Lewit: Yeah. You put on your costume and the sleeve doesn’t fit and you say, “What the hell? It looks better because the sleeve is too small.”
Gabriel Lewit: All right, well, a little bit of fun aside here. What have we talked about here? We’ve talked about different investing personalities.
Steve Lewit: Well, the fact is that there are different investing personalities.
Gabriel Lewit: 100%. And that’s really the connection here, folks, with a little Halloween spirit theme intro to it. But if you are an investor, you typically have, whether you know it or not, and I talk a lot about this, you have an investing personality. And how you view money and investing and your approach to this typically will influence your investment decisions. And you have to have, whether you like it or not, some form of approach that you feel comfortable with, just as you might not feel comfortable being in a gory, crazy Halloween costume and you might prefer a pumpkin. You’ve got to find the style that really fits for you when it comes to building your investment plan for the future.
And those are the different ones we talked about here today, where you’ve got market timers, you’ve got people that safe and cute, little simple things like CDs. You’ve got target date funds, index fund type investors. You have ultra-aggressive stock pickers. You’ve got people that want to just win with individual stocks. You’ve got people that prefer an advisor. Let them figure it out, delegators, people that rather do it themselves, DIYers, no matter what the case is, whether it’s good or bad, all of these things can influence the choices that you make when it comes to your money.
Steve Lewit: And you know, Gabriel, it’s a challenge for us because when we’re sitting in front of a new client. What are we trying to figure out? We’re trying to figure out who is this person as an investor? Because some people will say, “I’m very, very conservative.” And then you open their portfolio and they’re in all tech stocks and say, “How did that happen?”
Gabriel Lewit: Well, tech stocks aren’t aggressive, are they, Steve?
Steve Lewit: They’re not that aggressive, are they? So we’re trying to find-
Gabriel Lewit: Which by the way, folks, they are.
Steve Lewit: They are. So what we’re trying to do is see through the costume because we all wear costumes in life to get a little psychological, but to see through the costume, who is this person really? And can we fit a plan to that person and build their wealth through that? And that’s how you get peace of mind because it fits. It’s like a custom-fit suit. Better than off the rack.
Gabriel Lewit: So where do you get started with this? Well, number one, I think you just start thinking about it. “Huh? What kind of investor am I?” Ask your spouse or friend, “What do you think? You know me well. Where do you think I should invest my money?” Start to try to figure it out.
Steve Lewit: It’s a great conversation because I guarantee you folks that whoever you ask does not see you the way you see yourself.
Gabriel Lewit: Yeah. It could be very, very different. And then of course, if you’re working with us as an advisor, and that’s something, of course, that we can help you with if you’re not currently or if you’re looking to explore new options, well, we can talk to you about your risk comfort level. We can talk to you about your return goals, what’s the purpose of this money in your life, your time horizons, bad experiences you’ve had in the past, things you’re looking forward to. All of that can help, I think, identify this right answer for you.
Steve Lewit: And folks, if you come in the next two weeks, we have Halloween costumes here to give out to you to match your personality.
Gabriel Lewit: Well, we certainly don’t so don’t ask, but just in case you-
Steve Lewit: Don’t take me serious on that.
Gabriel Lewit: Yeah. We do not have those in stock here. You can go to your local Halloween Spirit store and find one that fits you well there.
Steve Lewit: Spirit it up.
Gabriel Lewit: Okay. Alrighty. Alrighty. Well, if you have questions on anything we can help you with as far as your investment personality, give us a call here, (847) 499-3330. Or you can go to sglfinancial.com, click contact us and schedule a complimentary meeting at your earliest convenience and we will be here for you.
Steve Lewit: Well done.
Gabriel Lewit: Yes. Okay. Well, moving on.
Steve Lewit: Yes.
Gabriel Lewit: Now, I mentioned this next topic. I didn’t say what it was but could be considered a little bit spooky.
Steve Lewit: Tell me about it. Yeah.
Gabriel Lewit: Okay. And there’s been actually quite a bit of talk about this in the news recently, and it seems to be, no pun intended, bubbling up to the surface.
Steve Lewit: Actually, Gabriel, I think it’s been bubbling for three years.
Gabriel Lewit: Well, and the question is are we in the midst of a tech AI bubble? Okay. And yes, what is a bubble, first and foremost? Mr. Lewit, would you like to explain that in case someone’s maybe a little unclear on what that means by the term “investment bubble.”
Steve Lewit: Bubble is when investments reach a pricing point that cannot sustain it. It’s like you blow up a balloon and it keeps getting bigger and bigger, but sooner or later just a little pinprick will burst that whole balloon. That’s a bubble.
Gabriel Lewit: A pinprick will tend to burst most balloons.
Steve Lewit: Well, that’s true.
Gabriel Lewit: I think you mean it’ll pop if you just keep it because it gets a little larger, a little larger.
Steve Lewit: What I was thinking like in the dot com era, there was a huge dot com bubble because the internet was going to change the entire universe and yada yada yada. And people were buying and the price to earnings ratios went through the roof and eventually that burst. And then you-
Gabriel Lewit: It sure did.
Steve Lewit: And then you had the worst 10 years in market history.
Gabriel Lewit: Well, you had three bad years in a row after the bubble burst in 2000, 2001, 2002. And there is a lot of concern now that that could be repeated with the AI race, arms race, as many seem to call it that’s going on right now. And so the question is that legitimate? Is it not? Well, it’s confusing because if you go online, you can find people that will argue both sides.
Steve Lewit: Definitely.
Gabriel Lewit: 100% you can find articles on both sides. In fact, we’re looking at one right here that’s saying, “Oh no, valuations are great. There’s room to run. Nothing to worry about here. It’s justified, the investments that are going into the billions and billions and billions going into AI right now.”
Steve Lewit: And when you read those, they’re logical. It’s not like they’re pie in the sky. These are smart people that are building a case one way or another. And they all make sense to me. It’s like, “Oh, he’s right. Oh, she’s right. Oh, she’s right.”
Gabriel Lewit: Well, I think there are more though that are coming out saying, “Yeah, we really could be in the midst of an AI bubble.” Even the CEO of ChatGPT, OpenAI, Sam Altman said, “Yeah, it’s possible we’re in a bubble.” Jamie Dimon, the Chase CEO recently came out and said he thinks that there’s a very high probability of a market correction.
Steve Lewit: He said that very strongly.
Gabriel Lewit: Strongly, yes.
Steve Lewit: That’s the way to say it.
Gabriel Lewit: Based on where we are right now.
Steve Lewit: Yeah. He’s not positive about the future.
Gabriel Lewit: He placed the odds being pretty high.
Steve Lewit: Yep.
Gabriel Lewit: There’s been more talk about as well, just to give a few examples, but there’s also interesting articles that have been coming out lately talking about the level of circular investments across AI companies.
Steve Lewit: Now explain that.
Gabriel Lewit: Well, let’s say there were four AI companies or five AI companies, and they have to report their earnings, but they are just investing in each other. So one’s taking a stake in another, another is buying a huge quantity from a third. And so all of these companies are seemingly making lots of money, but they’re all just self-investing in each other and reporting that they’ve got these huge sales and huge earnings. That is more risky than if it was not circular investment across closely held group of firms
Steve Lewit: It’s like an artificial earnings report. So that’s going on. At the same time, AI is a much broader and deeper effect than the dot com era and that people are saying because of that, because the implications go so much further and deeper into the economy and into business, into structures, into transactions, into every aspect, more so than the dot com, that this is not… There’s room to breathe here. And there’s a lot of opportunity here, which there is. The question is where does it end? Because everything goes in cycles, folks. Don’t ever forget that. That nothing goes straight up forever.
Gabriel Lewit: Yes. And there’s been talk, I think, there’s correlations of course with the 2000 dot com crash where, I think… Who was it that used the term irrational exuberance? I forget who that was.
Steve Lewit: Oh, I don’t know. That’s a great-
Gabriel Lewit: Was it Greenspan? Hold on. Irrational exuberance. We’re going to look this up for you, folks, on the fly here.
Steve Lewit: Folks, I want you to know this is the first time Gabriel has said, “Who said this?” And I didn’t know the answer.
Gabriel Lewit: You should know that.
Steve Lewit: I’m an economist. I should know.
Gabriel Lewit: Well, yeah, there’s probably someone that originally came up with it, but I’m thinking there was some that used it before. Alan Greenspan. Yes. 1996.
Steve Lewit: Really?
Gabriel Lewit: He was promoting that he thought things were overvalued in 1996. Well, when did the bubble burst?
Steve Lewit: 1999. Three years later.
Gabriel Lewit: Yeah, so he was correct, but just three years early.
Steve Lewit: He was early. Yeah.
Gabriel Lewit: So that’s the counterargument. “Yeah, sure. Maybe we are, but we could have three more good years ahead of us before this bubble bursts and let’s all pile on right in the market.”
Steve Lewit: Except the piece that you have to add onto that, Gabriel, is that we’re on the tail end of the longest bull market in history.
Gabriel Lewit: Yeah. That’s a factor since 2009.
Steve Lewit: 2009, exactly. The market has basically gone straight up.
Gabriel Lewit: We had 2022 and 2023.
Steve Lewit: We had a little blips, but they self-corrected in no time at all. So logically you say to yourself, “This just can’t keep going.”
Gabriel Lewit: Well, the other thing too is we’ve talked about this on previous economic outlook events and market forecasts where we talked about the S&P make-up. So the S&P 500, specifically, how many holdings are in the S&P 500? Steve, this was a difficult question for you.
Steve Lewit: Let me see. S&P 500. 500?
Gabriel Lewit: Yes. Oh yes, you are correct.
Steve Lewit: Tough one.
Gabriel Lewit: Now, did you know there are stocks… I know you know this, but listeners that make up this group of companies known as the Magnificent 7. And just in case I butcher this, can we Google what they are? I know it’s Amazon, Apple, Netflix, Meta, Google, which is Amazon. Sorry, I’ll get it up here right for you folks here. I should have been a little bit better prepared. Give me one second. Okay, so you’ve got your Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla.
Steve Lewit: And Tesla. I forgot Tesla.
Gabriel Lewit: So those are considered the Mag 7. Now they are in the S&P 500, but did you know that the weight of the S&P 500 is almost… I think it’s now almost 35, 36% of the S&P 500 are those seven stocks.
Steve Lewit: Yeah. So just to explain that. So one would think when you buy the S&P 500 index, you’re getting 500 companies and they all kind of have an equal weight-
Gabriel Lewit: You got great diversification. 500 companies.
Steve Lewit: But 35% of the S&P performance is narrowed down to seven companies.
Gabriel Lewit: Correct. Most of which are… I don’t know if Tesla’s… They are getting huge into the AI because he wants to build human robots but these are all heavily invested-
Steve Lewit: In AI.
Gabriel Lewit: In AI. And what’s interesting, there’s other funds out there you can buy that are specifically tech-oriented. For example, QQQ. And you know when you buy QQQ that you’re buying a heavy tech-oriented fund. And the reason that’s important is because there is more risk when you’re associated with higher-flying tech stocks than you are typically non-high-flying tech stocks. But the S&P now is more closely starting to resemble a high-flying tech fund than it is a diversified mix of 500 US companies.
Steve Lewit: And so, when people say, “Hey, the market is up,” the market may not be up, but the S&P might be up because of seven companies.
Gabriel Lewit: Correct.
Steve Lewit: And that is not the market.
Gabriel Lewit: And that’s where there’s risk. There’s underlying currents there that are important to be aware of. There could be if there was an AI bubble bursting. And I don’t have a crystal ball. Actually I do have one in my office, but I use it to joke that we can go consult it if we want to.
Steve Lewit: No, it’s broken.
Gabriel Lewit: It’s not working currently.
Steve Lewit: It never worked for me. I tried your crystal ball once and no. It’s terrible.
Gabriel Lewit: It’s a great crystal ball; it just doesn’t work.
Steve Lewit: It’s just terrible. It’s just terrible. So Gabriel, what do people do? Look, we are riding sky-high. We’ve been riding sky-high for a number of years now. Everybody I talk to asks the same question. You know the question.
Gabriel Lewit: Yeah, where’s the market going?
Steve Lewit: When is this going to end? What do people do if they’re afraid?
Gabriel Lewit: Well, that’s a great question. It’s something we can give you a little bit of insight into here today, just with an asterisk until we see your full plan. Don’t rush out to do these things.
Steve Lewit: This is not advice.
Gabriel Lewit: This is not personalized advice just for you because we’re talking to hundreds of people listening to the show here all at once. But number one is you can have a plan where if you know you need money in the near term, and I’m going to use near relatively, one to 15 years is nearer… Near and mid. We’ll do near and mid. You could create buckets where the money that you need in the near term, one to five, or the midterm, five to 10 or 15, that is safer or safe. So if the market balloon bubble bursts here, okay, you can be confident that the money you need for the next 15 years is safe and secure and that can give you a nice peace of mind factor.
Steve Lewit: Yeah. Well, let’s take five years. Let’s say you’re retired and you need an extra $50,000 a year from your portfolio over and above your social security and pension, if you have one. Take that… So five times 50,000 is 250,000. That comes out of the market is what you’re saying, Gabriel. And that goes into something safe.
Gabriel Lewit: And it could still be market linked. We’ve talked about this, I think, on the show. We have some investment products that are 100% safe. And as of, at least right now, in case you listen to this in the future, and today is the 16th of October 2025, you can earn up to, depending on the dollar amount, 13.5%-
Steve Lewit: With zero risk.
Gabriel Lewit: … per year based on the S&P 500 with zero downside risk over a 12-month period.
Steve Lewit: And totally liquid.
Gabriel Lewit: And essentially totally liquid. And so what does that mean? It means, well, you could hedge a little bit. Yeah. If the market’s going to shoot up another 30%, yeah, you’d make 13.5. You lose a little there, but if it continues to rise 13, 14%, you still capture all of it. If it drops 40% or 30 or 20%, you don’t lose anything. For some, that might be a good choice for that safer component of their overall plan.
Steve Lewit: And then the next tranche or bucket would be the next five years but then you have five years to get there, and you can find five-year guaranteed rates now, which are actually very, very good.
Gabriel Lewit: Yeah. So there’s lots of choices there. And then whatever money you have left over in this long-term bucket that you know you’re not going to need for 15 years, the good news there is that if we have a really bad next 10 years, you still have 15 before you’d need it. And the other thing there is to utilize portfolios that tend to work better in potential choppy environments. So here’s what I mean by that. Let’s say we looked at the next 10 years. Let’s say there are three possible market outcomes over the next 10 years. Oversimplify this a little bit. Let’s say over the next 10 years, likelihood of another 10 year bull market run, given where we are right now.
Steve Lewit: You mean the market goes straight up for another 10 years?
Gabriel Lewit: I mean essentially straight up.
Steve Lewit: Zero.
Gabriel Lewit: Well, you can’t say zero.
Steve Lewit: I’m going to say zero.
Gabriel Lewit: Probability I would say is low given our starting point.
Steve Lewit: Zero.
Gabriel Lewit: Now, what’s the probability of a loss decade like we had in the 2000s?
Steve Lewit: Not likely but could happen.
Gabriel Lewit: It’s more catastrophic, right? It’s pretty rare. There have been a few in the past.
Steve Lewit: Those 10 years, folks, we had two huge crashes, the dotcom crash in the financial crisis.
Gabriel Lewit: So, we’re not sitting here saying, “Yeah, we’re going to have another 10-year flat market.” So I think the probability there is low. Now, what most of the data points do is the probability the next 10 years, we’re going to have what I call a soft next 10 years, below average for the market.
Steve Lewit: Well, Vanguard is projecting-
Gabriel Lewit: 4 to 5% for stocks.
Steve Lewit: Yeah. The one I read said 5, 6%. If you do 5, 6%-
Gabriel Lewit: Depends on the asset class.
Steve Lewit: … in the market, you’re doing well.
Gabriel Lewit: Now you might say, “Well, that’s terrible because I earned 15% for the last 15 years.”
Steve Lewit: On my tech stocks.
Gabriel Lewit: But that’s the point. Markets average out. And if we’ve had a very long above average period, it’s high probability the next 10 years based on fundamental data will be a below average period. Now, if we look at strategies that work best in those environments, what do you want in a strong 10 year bull market? What do you want exposure to?
Steve Lewit: Equities.
Gabriel Lewit: Yeah. Aggressive equities.
Steve Lewit: That’s when you’re in equities.
Gabriel Lewit: When don’t you want aggressive equities?
Steve Lewit: When the market’s going down.
Gabriel Lewit: Generally, the other two…
Steve Lewit: The problem is we don’t know when.
Gabriel Lewit: Yeah. So when I talk about building a portfolio, you can build portfolios that are better suited for two of those three scenarios, a soft decade and a flat decade, using buffered strategies, namely as a component of that. And I think the probability is in your favor there if you were to do that, as opposed to just a pure, unbuffered, full tilt equity growth. Now, if you have enough time, yes, that’s going to be fine. But if we still think where we’re at for the next 10 years lends itself to a little bit of downside protection that actually saves you from losing money and saves you time from having to regain that money, we may be able to take advantage of that in your favor.
Steve Lewit: Yeah. Folks, most research says investing in the stock market aggressively is a long-term investment. Long-term is 15 to 20 years. It gives you time to breathe and make mistakes and go through the ups and downs because you don’t need that money. Now, if you need that money for expenses or for income or you’re going to buy something and it’s down 30%, that’s when it’s problematic.
Gabriel Lewit: Exactly. So that’s all we wanted to talk about there. A little spooky topic called an AI bubble, something to be aware of, how to position against it. There’s ways. Call us. We can help guide you through it. We will give our phone number here in a second when we wrap up the show, but yeah, I think it’s good to have this on your radar versus the irrational exuberance at this stage in the game.
Steve Lewit: So, I just wanted to add to that. There’s nothing wrong if you’re investing… Gabriel, it’s very emotional and people rise and fall. Their emotions rise and fall with the market. So if you’re in fear, you’re really concerned and you’re fearful, there’s nothing wrong with de-risking your portfolio but not into cash, into… There’s strategies and products like Gabriel’s been teaching you that can give you a really decent return with very little risk.
Gabriel Lewit: If the market keeps going up and it protects you if it goes down.
Steve Lewit: Exactly.
Gabriel Lewit: Exactly. Okay. To round out our show, we’re… Lucky you, Steve. We’re not going to have time to talk about debt planning.
Steve Lewit: What is that? Debt planning? Wake me up.
Gabriel Lewit: But we will round out our show with two quotes of the month for you folks.
Steve Lewit: I did that purposely.
Gabriel Lewit: Two quotes of the month.
Steve Lewit: I had a lot to say about that.
Gabriel Lewit: Okay. The first one says…
Steve Lewit: Yes?
Gabriel Lewit: “Retirement is what you do between doctor appointments.”
Steve Lewit: I love it. Who said that?
Gabriel Lewit: Unknown.
Steve Lewit: Unknown.
Gabriel Lewit: That’s what it says.
Steve Lewit: I like unknown.
Gabriel Lewit: We found it, but it said unknown.
Steve Lewit: Yeah. Unfortunately we get older and we get a lot of aches and pains and you got the dentist on Tuesday and the hand doctor on Thursday and the breathing doctor on Friday, and people talk about that a lot.
Gabriel Lewit: There you go. There you go.
Steve Lewit: You wouldn’t know about this.
Gabriel Lewit: I’ve had my fair share of doctors, back doctors, knee doctors, kids’ doctors. I guess I’m retired. I didn’t even know it.
Steve Lewit: You didn’t even know you were retired.
Gabriel Lewit: All right. Okay, next one here. I like this one. “The best way to teach your kids about taxes is by eating 30% of their ice cream.”
Steve Lewit: Okay, I can-
Gabriel Lewit: Said by the one and only Bill Murray.
Steve Lewit: Yeah. So this is so funny. So I’m thinking, folks, I’m thinking of things to do with my grandkids because I don’t see them enough. So I said to Gabriel, I’m going to buy an ice cream machine and we’re going to have an ice cream day once a month where I come and me and the kids make ice cream. So now I have another agenda after we make the ice cream and I make an ice cream cone, I can teach them about taxes. So they’ll love me on the one hand and hate me on the other.
Gabriel Lewit: Well, it could be a valuable life lesson. You don’t know. But you get some ice cream out of it.
Steve Lewit: I do.
Gabriel Lewit: There you go.
Steve Lewit: And they get 30% less. I get 30% more.
Gabriel Lewit: So yes. If you were wondering how do you teach your kids about taxes, you eat their ice cream or generally any other dessert. Cookies. Let’s say they get three Oreos. You take one of them.
Steve Lewit: Take one of them away. Yeah, exactly. Taxes. What a horrible lesson for a kid.
Gabriel Lewit: Oh, man. Let them grow up. Let them pretend life is roses and sunshine and rainbows.
Steve Lewit: Let them dream because those dreams end too early in life.
Gabriel Lewit: All right, well that’s our show for you. If you do have questions for us about investments, investment personality, AI bubbles. Now, look, if you’re a risk-taker… We were talking about investment personality. “Oh, what bubble? There’s no such thing.” But we’ll help you figure those things out if you want us to.
Steve Lewit: There’s nothing wrong with being a risk-taker.
Gabriel Lewit: But it’s how you build it the right way.
Steve Lewit: Just do it wisely.
Gabriel Lewit: Give us a call. We can help you. (847) 499-3330 or go to sglfinancial.com, click contact us. Set up a time. We’ll talk for 30 minutes. We’ll have a phone call. We’ll help you figure out what to do, where to go, things to see, what to avoid, all that good stuff. And we are very much looking forward to that. So we hope you’re doing well. Thanks for listening to the show and we’ll talk to you on the next one.
Steve Lewit: Stay well, everybody. Bye-bye now.
Gabriel Lewit: Bye-bye now.
Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at (847) 499-3330 or visit us on the web at sglfinancial.com and be sure to subscribe to join us on next week’s episode.
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