What They’re Saying: Grading the Gurus

Our 2 Cents – Episode #107

What They’re Saying: Grading the Gurus

Welcome back for another new episode of Our 2 Cents! We’re talking about winning big in the lottery, another round of rate hikes by the Fed, and then we’re having a lot of fun providing our perspectives on the advice of some well-known industry experts. Tune in now, and let us know what grade you’d give to some of these gurus.

  1. The Mega Millions Jackpot Surges:
    • What should you do if you were to win?
    • Should you take the lump sum or opt for the payments over several years?
  2. The Fed is At It Again:
    • The Federal Reserve again lifted interest rates by 0.75%.
    • Why are they doing this, and will it continue to slow down the economy?
    • What could happen at their next meeting in September?
  3. Grading the Gurus & Their Advice:
    • Phil Orlando (an Equity Strategist) says the market will decline further over the summer, and he favors value stocks over growth stocks.
    • Sam Robson (a Financial Author) says the bear market is a fantastic opportunity for long-term investors; long-term being the key phrase.
    • Robert Kiyosaki (an Author) says a market crash is coming and to buy gold and silver.
    • Grant Soliven (Columnist and Financial Advisor) says to beware of making emotional decisions in turbulent times.
    • Chris Orestis (head of a national retirement resource organization) said if it were him and he was about to retire, he would delay it a year or two.
    • Warren Buffett (Businessman and Investor) says “The most important thing to do if you find yourself in a hole is to stop digging,” and “Be fearful when others are greedy, and greedy when others are fearful.”

Tune in now to join us for this discussion!

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Podcast Transcript

Announcer: You’re listening to Our 2 Cents with a 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 to Our 2 Cents. Happy Thursday to you. It’s Thursday, at least here at the SGL Financial podcast studio, also known as our conference room.

Steve Lewit: So normally you say I think, good morning, but this is unusual.

Gabriel Lewit: I’m mixing up the greeting. I’m saying happy Thursday.

Steve Lewit: Happy Thursday everybody.

Gabriel Lewit: Or happy Sunday if you’re getting this on the day that we sent out the podcast. So I hope you’re doing great. It’s a wrapping up of July. Can you believe it’s almost August?

Steve Lewit: No, I can’t. This year…

Gabriel Lewit: I just realized this yesterday. I’m looking at the calendar to schedule a meeting and we were booking for August and I said, “What do you mean for August? It’s not August yet.”

Steve Lewit: So yeah, I did the same thing yesterday. It’s like, I’m booking an appointment for August 19th. And I said, “No.”

Gabriel Lewit: That’s forever away, like months out, right?

Steve Lewit: Let me go back. I must be in the wrong month. This year is just flying by.

Gabriel Lewit: It’s already July 28th.

Steve Lewit: This year is flying by.

Gabriel Lewit: Yeah. Summers go by too fast. And hopefully you’ve enjoyed yours. I don’t know if you were aware, I was out on a vacation myself here just last week. Hence why we didn’t have a podcast. Sorry about that folks. I had to get a little R and R in.

Steve Lewit: With the three little ones there’s not much R and R.

Gabriel Lewit: There was some running and well, running and…

Steve Lewit: Running and running.

Gabriel Lewit: And running, yes. With the toddlers and the six and five year old. So, but yeah, it was a great trip. And Dad, how are you doing?

Steve Lewit: I’m doing good. I’m good, it’s been a, I don’t know, it’s been a tiring week this week.

Gabriel Lewit: Really? I thought…

Steve Lewit: All good, but it just a lot of different things going on. A lot of questions coming in, not worry questions, but more like, “Hey, what do you think is going to happen?” questions. And the good part of that is most of the folks I’m talking to it are not freaking out that the market’s down because it’s kind of built into that plan. But they are just wondering where is all of this headed? You know, we had a good day yesterday in the market. I don’t look short term, and some people call me and say, “Hey, Steve, the market’s turned around.” And it’s like, “Well, we’ll see about that, it’s just one day.”

Gabriel Lewit: Well, yes. Folks, we’ll talk a little bit about that. If the market bounces up a little bit after it’s been down, does that mean that the end of the downfall is here? Or is it just a short blip on the radar? Stay tuned, we’re going to cover that in just a little bit here, but what I wanted to kick things off first with is a very important question. Which is, have you all bought in your lottery ticket?

Steve Lewit: Oh, that is a great question.

Gabriel Lewit: Okay. Now by…

Steve Lewit: I’m going onto the internet and buy my ticket as soon as we’re done here.

Gabriel Lewit: Well, unfortunately by the time you get this podcast, we’ll know if anybody won. But as of the date of this recording, there’s a lottery of $1.02 billion in the Mega Millions.

Steve Lewit: That’s ridiculous

Gabriel Lewit: That somebody is potentially going to win, and Dad weren’t you on, I can’t recall, weren’t you on WGN once about what to do if you win the lottery?

Steve Lewit: Yeah. This is about two years ago and they interviewed and said, “What should I do if I win the lottery?”

Gabriel Lewit: Yeah. So, let’s say one of our lucky listeners wins this thing, what should they do?

Steve Lewit: First, let us know. Well, here’s the deal. Most lottery winners go broke.

Gabriel Lewit: If you go broke winning a billion-dollar lottery, I think there’s some problems there.

Steve Lewit: Folks, men and women, couples that have won 500 million, 400 million, 800. They go broke.

Gabriel Lewit: That boggles my mind

Steve Lewit: It boggles my mind too, but the statistics are awesome against lottery winners actually sustaining their wealth over the period of their life.

Gabriel Lewit: Yep, so certainly we won’t spend too much time talking about the what ifs, because your chance of winning is one in 303 million. But if you do happen to win, certainly give us a call. We’ll go through some of the specifics. Dad, what would you do if you won? Well, the first question I would ask you being the advisor that you are. Would you take the lump sum of 1.02 billion, which then gets reduced down to, I believe it at about 600 million would be the lump sum. Or would you take the $1.02 billion over 30 years.

Steve Lewit: I would take the lump sum.

Gabriel Lewit: Yeah?

Steve Lewit: What would you do?

Gabriel Lewit: I would take the lump sum.

Steve Lewit: Yeah.

Gabriel Lewit: Yeah. But there’d be a very painful tax bill.

Steve Lewit: Yeah. It puts you into… What bracket is that?

Gabriel Lewit: The highest one.

Steve Lewit: Is it 40?

Gabriel Lewit: It’s well, it’s the highest bracket, I’ll tell you that much.

Steve Lewit: Yeah.

Gabriel Lewit: Well, so folks, if I win the lottery, I’ll tell you what, I’ll take you all out to dinner.

Steve Lewit: I think we’ll take a lot of people. What would you…

Gabriel Lewit: Maybe a ballgame?

Steve Lewit: Well, maybe we’ll buy the ballpark. What would be the… How would you think about this money?

Gabriel Lewit: What would I do? Honestly, I don’t know if I would do anything different. I feel like I would just do what we do now. Just maybe add another office or two. And I would move my office to wherever I want to live full time, where there’s no snow.

Steve Lewit: Right. I bet you would set up trust funds for the kids.

Gabriel Lewit: Of course.

Steve Lewit: I bet you would give away money to the rest of the family. Oh, did you hear the silence folks? Did you hear that?

Gabriel Lewit: I’m just kidding because you were looking at me expectedly.

Steve Lewit: What! Did you hear that silence folks?

Gabriel Lewit: I was just kidding, of course I would. At least, I’d give you like a hundred grand.

Steve Lewit: Give your brothers and sisters.

Gabriel Lewit: Like a hundred grand each, you don’t want to give out too much.

Steve Lewit: Yeah. How about charity?

Gabriel Lewit: Of course. Yeah. I once made a pact with the higher powers that be, that if I ever want a billion dollar lottery or any kind of a hundred million dollar, I would give half at least to charity. And I’m committed to that, higher power upstairs, if you let me win.

Steve Lewit: Yep. And you and I are together on that, that’s what I would do as well.

Gabriel Lewit: That would be cool. Well anyways guys, good luck. Hopefully you win. Let us know if you do.

Steve Lewit: Or hopefully you won.

Gabriel Lewit: Won, yes. Well let’s talk about some practical news here, which is yesterday the Fed raised rates by 0.75 points again. Okay, this is now the second time that they’ve done this. It’s a unusually large rate increase. And dad, just because I’m sure some folks here are familiar, but in case some folks aren’t, why is the Fed doing this again? The summary version.

Steve Lewit: Okay, well if you have bought anything in the last six months, excuse me, you know that you’ve paid not more, but a lot more for it and that’s called inflation. So when there’s too much money in the economy, there’s more buyers than sellers and the prices go up. It’s just supply and demand. So when you raise interest rates, it cuts the money available in the economy back.

Gabriel Lewit: Slows the economy.

Steve Lewit: Slows the economy, and less money means less inflation.

Gabriel Lewit: Yep. And so here’s a quote from the article that we are referencing here from the Wall Street Journal says, “Mr. Powell said Wednesday, it was too soon to say whether the Fed would dial down the size of its rate increases to half a percentage point or a quarter percentage point at its next meeting in September. But he did say that at some stage it would be appropriate to slow the pace of rate increases to assess their cumulative impact on the economy.” Which is exactly what you’re saying. And there’s a lag effect, which is part of the challenge here. Is the goal of the rate increases is to reduce inflation, but there’s going to be some time to start to see the impact that’s happening here. Which will be noticeable in a few ways. Anything that has a rate, like a car loan, a mortgage, you’re going to start to see those getting more and more expensive. You’re going to see housing will start to slow as demand slows for mortgages. So there’s a ripple effect that can occur here that starts to slow down the economy and bring down prices.

Steve Lewit: Companies are less apt to invest.

Gabriel Lewit: They can’t borrow as much from long term, so they won’t hire as much.

Steve Lewit: Now, if we have a real recession, you might see unemployment. So what the fed has to be careful of is this lag, like you said Gabriel, effect. Because you could bring inflation down, let’s say, “Oh, inflation is now six and four.” And they say, okay, well we’re only going to do half point, but the lag time to see the effect on the economy is longer.

Gabriel Lewit: Yeah. So, so here’s another great line here ’cause I thought this was a good article, I wanted to share it. It says, “Powell says that the slowdown in economic growth during the second quarter had been notable, citing signs of cooling consumer spending, hiring, and housing activity. And are we seeing the slowdown in economic activity that we think we need? Mr. Powell said, there is some evidence we are at this time.”

Steve Lewit: Yeah. And so it’s slowing down. And then the fed says, okay, we think it’s slowed down enough. But the problem is it may keep slowing down. Even though they said it’s enough.

Gabriel Lewit: Because of this lag effect.

Steve Lewit: Because of this lag effect, and that’s the real problem.

Gabriel Lewit: Yeah. And so the risk that they’re trying to balance here is that they don’t over slow, thus triggering more pronounced or prolonged recession. And they’re trying to get this just right, which is very hard to do.

Steve Lewit: Yeah. It’s like cooking a good chicken noodle soup.

Gabriel Lewit: Yeah.

Steve Lewit: You got to get it just, or Italian sauce. That’s more like it, Italian sauce.

Gabriel Lewit: A good red sauce.

Steve Lewit: Red sauce. So you have to boil your gravy or cook your gravy.

Gabriel Lewit: Gravy.

Steve Lewit: It’s called gravy.

Gabriel Lewit: It is.

Steve Lewit: And folks out there that aren’t to Italian sauces or gravy, know this, you have to cook it at the right temperature for an extended period of time. And if you get it wrong, it doesn’t taste as good.

Gabriel Lewit: In this case is sauce the inflation, the interest rate increases? If any sauce that’s cooking, the gravy that’s cooking.

Steve Lewit: It’s a gravy folks. If you have a good gravy recipe… I had a recipe, can I tell a story?

Gabriel Lewit: Of course.

Steve Lewit: Okay. So when I was an opera singer, I lived in a big building in New York City called The Ansonio, which was full of opera singers. And the reason it was full of opera singers is that it was a cinder block building, so you couldn’t hear through the walls. So we could yell and scream right into the night, it wouldn’t bother anybody.

Gabriel Lewit: You couldn’t hear it through the wall?

Steve Lewit: You couldn’t, it’s cinder block. You know, it’s like eight inches thick.

Gabriel Lewit: Yeah. But you guys sing loud.

Steve Lewit: It does. You couldn’t hear. So my neighbor Luigi Macchio was a famous tenor in Italy, baritone, and we were good friends. And his wife, what was her name? His wife made the best gravy in the world. I mean…

Gabriel Lewit: Did you get the recipe?

Steve Lewit: And I got the recipe and guess what?

Gabriel Lewit: You lost it.

Steve Lewit: I lost the recipe. So folks, I need a gravy recipe.

Gabriel Lewit: There you go. If you’ve got one, send it in.

Steve Lewit: This is more important than rising interest rates.

Gabriel Lewit: So if you’re out there, you’re maybe asking, what does this mean for me? And Dad, as you mentioned, people are now asking you what’s in store as a result of these rate hikes. Does that mean the market is at a bottom now? Are we going to see recoveries? Folks, it’s too soon to know for sure. I think is my quick answer. We’ve seen a little uptick on markets have reacted positively as of today to their rate hike announcement. And you know, a lot of people are starting to say, “Hey, maybe we’re out of the worst of things. Right?” So over the last couple weeks we’ve seen some improvements in the market. Well maybe, maybe not.

Steve Lewit: Well maybe is maybe not. If you look at the diagrams from history, like through 2021, the market starts to go up and all of a sudden it goes back down again. You know, it goes up a little bit and it goes back down again. So we don’t know, the truth is nobody knows. We have these predictions here or our suggestions of a bear market. Are we going to talk about those today?

Gabriel Lewit: We are. Yeah. We’re going to get into those.

Steve Lewit: Yeah. So you’ll see that there are different perspectives on this and what to do about it. But bottom line, nobody knows the trouble I’m in.

Gabriel Lewit: Yeah. So it’s still too soon to tell guys. And if you’re looking for the specific answer, you’re not likely to get it, because there’s just too much uncertainty still. And I think that’s something that’s hard for people to hear sometimes Dad.

Steve Lewit: Well, we’ve been saying this over and over again. You got a war, you got supply chain issues, you still got COVID.

Gabriel Lewit: Kind of like a broken record, right?

Steve Lewit: Yeah, we’re a broken record. Supply chain issues, you’ve got rising interest rates, you got inflation, consumer products like food is rising at even higher rates than the interest rates. Gas came down a little bit. You know, it’s a mess. So we love messes because we plan through them, but you know, it’s still a mess.

Gabriel Lewit: Yep, so yeah folks, no real changes to your planning. If you had a good plan before, it’s still a good plan. If you’re trying to time the market, you still shouldn’t try to time the market.

Steve Lewit: That’s a bad plan.

Gabriel Lewit: And will the Fed keep raising rates? Yeah, probably a little bit. Is the economy going to keep slowing down? Yeah, it’s going to keep slowing down a little bit. Will it be a perfect soft landing? We don’t know yet, but we’ll see. Alrighty. Well with that in mind, I know you mentioned we were going to talk about some different options. So there’s lots of pundits out there, there’s lots of experts out there. I use quotation marks here. If you were able to see me “experts” and everybody likes to share an opinion of what to do. And I think that contributes to a lot of people asking us, “What should we do?” Because they’re hearing a lot of pundits and quote “experts” out there, always giving their opinion of precisely what you should do at a given point in time. And we’re going to pick on some of those here today and digest them with you.

Steve Lewit: Positive and negative.

Gabriel Lewit: Positive and negative, and talk to you about whether or not you should listen to some of these or not listen to some of these. Yay or nays.

Steve Lewit: We should send ear plugs for the non listening sections.

Gabriel Lewit: All right. So let’s go ahead and dive in. And if you have any questions on anything we’ve talked about so far, of course you can reach us here anytime at (847) 499-3330, or go to SGLFinancial.com, click contact us and schedule a time to talk. Okay, so what are they saying? People out there, the pundits, the experts, number one we’ve got, and we just cherry picked some of these from the web. We’ve got equity strategist named Phil Orlando says he expects the market to decline further over the summer, perhaps an additional 10%. And that he favors value stocks in energy, financial and healthcare industries, over growth stocks. And that he says holding cash. Hasn’t been this attractive in more than 20 years. Hm. Phil Orlando,

Steve Lewit: Phil. Phil.

Gabriel Lewit: What say you, Steve?

Steve Lewit: I say Phil, I don’t know.

Gabriel Lewit: Anything you agree with in there?

Steve Lewit: Well, if you have cash, in other words if you’re not selling low to get cash, if you have cash that you’ve been hoarding. Yes, it’s very attractive because the market is low and you should put it in the market. Even if it’s going to go a little lower, you’re still buying low. Value stocks long term outperform growth stocks. So he’s saying, switch your portfolio around in some way. And that’s a form of market timing. I’m trying to figure out over the next few years which class…

Gabriel Lewit: I will say with him in particular, he’s saying energy, financial, and healthcare.

Steve Lewit: Yeah. That’s sector tying.

Gabriel Lewit: That’s where you, the more narrow you go there… Because I actually would agree with him on the value stocks, because if you look at growth stocks, they were overpriced.

Steve Lewit: They are.

Gabriel Lewit: And value stocks were underpriced. And that’s starting to equalize a little bit here, but as he starts to narrow that and say, just buy energy, financial, and healthcare, that’s very much market timing. What if energy has already peaked and you buy right now, because you heard that advice and you end up losing money. That’s the risk that you’re going to see there with that kind of strategy

Steve Lewit: And, and most self-done portfolio, is that a phrase?

Gabriel Lewit: Self-done? Self-made, homemade?

Steve Lewit: Homemade.

Gabriel Lewit: Self-managed

Steve Lewit: Self-managed, that’s the word. Most self-done portfolios are ultra-heavy in healthcare, and are low on financials. So we don’t know. You know, everyone’s trying to guess that out, and guessing ain’t a great investment strategy.

Gabriel Lewit: Yeah. So, how would you rate that advice in summary from Phil Orlando, Mr. Lewit?

Steve Lewit: C-.

Gabriel Lewit: C-.

Steve Lewit: Yeah.

Gabriel Lewit: Okay. I’d give it a C.

Steve Lewit: C, okay. Yeah.

Gabriel Lewit: Well, I’ve got another one now. Actually I forgot to write it down, but this just reminded me. I meant to put it on this list because it’s all over all the news things that I read, it pops up. You ever heard of Robert Kiyosaki?

Steve Lewit: Oh yeah.

Gabriel Lewit: Not one of my… I don’t mind him, he’s not my favorite. But he wrote Rich Dad, Poor Dad, and he’s all over the news right now saying that we’re going to see a recession and an economic crash, unlike any we’ve ever seen before. And a rush out there and buy gold and silver.

Steve Lewit: Yep.

Gabriel Lewit: So, thoughts on that one?

Steve Lewit: I’d like to know what gold, silver companies he’s invested in and that what he owns, because he’s just making. Robert Kiyosaki is a great, one of the best entrepreneurs in the world, and everything he touches is to make money for himself.

Gabriel Lewit: Well, yeah, my issue with that statement and I’d rate that a D advice. Okay, I’d give it a D.

Steve Lewit: I’d give it an F.

Gabriel Lewit: Okay. And the reason for that is it’s so bold in its pronouncement, okay. An economic recession and market crash unlike we’ve ever seen. And the only option for you is to go out and buy gold and silver. Well folks, how does he know that? Come on.

Steve Lewit: Well, he’s saying the U.S. currency won’t be worthwhile if there’s a recession, or market pullback. That’s not necessarily true.

Gabriel Lewit: Well, how does he know that?

Steve Lewit: Well, because he owns a gold and silver company then. That’s how he knows it.

Gabriel Lewit: So you got to be cautious with that one, and that’s also not very diversified. And if you took that advice and you just pour all your money in there, that’s very risky.

Steve Lewit: Yeah. No, if you want to go, you want to invest 10 grand in gold, go ahead and buy it.

Gabriel Lewit: That’s diversification that’s okay. But yeah, that was an interesting one that just reminded me. I wanted to talk about.

Steve Lewit: I didn’t see that one, yeah.

Gabriel Lewit: Okay. Then we’ve got, let’s see, there’s an author Sam Robinson, financial author, says the bear market’s a fantastic opportunity for long term investors. Long term being the key phrase.

Steve Lewit: Hmm.

Gabriel Lewit: That one I like, I agree with that.

Steve Lewit: I don’t know what he means by a fantastic opportunity.

Gabriel Lewit: Oh, he means what the other guy was trying to say, which is valuations are low it’s a good time to buy. It’s a good buying opportunity, but you still have to have a long term time horizon.

Steve Lewit: Yeah, I’d agree with that.

Gabriel Lewit: Yeah. It’s funny. I just had a client that’s that asked me this the other day, they said is now a good time to buy if we want to have money in a year from now? Can we buy and make 20% in a year from today? I said, “Well, that would depend if the market suffered down a year from the today.”

Steve Lewit: Yeah. That’s how it works, doesn’t it?

Gabriel Lewit: Right, but the longer… You have a phrase that you say, which I love at your seminars, which is there’s two secrets for ingredients for success in the market, which is what?

Steve Lewit: Diversification, asset allocation. And the second is time.

Gabriel Lewit: Time. So a year in market time is no time at all. It’s not enough time.

Steve Lewit: Time is 10 years.

Gabriel Lewit: So yeah. Long term…

Steve Lewit: Minimum.

Gabriel Lewit: When you hear long term investing, what that’s designed to imply is you don’t know what’s going to happen in the short term, which is one to two years. Medium term is three to five to seven . And long term’s usually seven to 10 and beyond.

Steve Lewit: That’s correct. So I had, this is interesting, because I had a potential client in yesterday and said, “I’ve got $3 million, I’m going to give you a million. I’m going to give this other guy a million and give this other guy a million, actually another gal, a million.” And I said, “That’s interesting, why are you going to do that?” He says, “Well, after two years, I’m going to compare them.” And I said, “Well, you do understand that you really to evaluate a money manager, you really need to give them 10 years, 10 to 15 years.” Right? Because anybody could have a bad two years or a great two years, lousy two years. It’s the long term in investing that the good managers win long term.

Gabriel Lewit: Yeah. So, that’s an interesting one for Sam Robinson, and I give a B+ to that advice.

Steve Lewit: Sam, I will agree with Gabriel B+. B+ not an A.

Gabriel Lewit: Not an A, let’s see. Okay. Columnist and financial advisor Grant Sullivan. Never heard of him, but I found this up there on the webs, says to beware of making emotional decisions in turbulent times and that making those kinds of mistakes can be more costly than you think.

Steve Lewit: Grant, I grant you an A+.

Gabriel Lewit: A+ advice on that one.

Steve Lewit: A+.

Gabriel Lewit: Correct.

Steve Lewit: Never invest with emotions.

Gabriel Lewit: Yeah. So when he says beware emotional investment decisions, what do you think? I mean, I don’t know exactly what he means, but what do you think an emotional investment decision might be?

Steve Lewit: Yeah. I got a call actually is to the first call I got from a client. This is the first call that was panicking. And this guy says to me, “Sell everything, I don’t want to lose any more money. I am afraid, I’m too old to lose money.” That’s an emotional decision. So then we went through his plan, and I show him where his risk is. And if you look at the total portfolio because… And he was fine, but had I not been there or had he not called me and did this himself, he would’ve emotionally sold at the worst time possible.

Gabriel Lewit: Yep, so that’s a good advice. I think really good advice. You’ve got to beware of your emotions as they can be very hard to ignore.

Steve Lewit: Yeah. You’ve got fear on the one side, and you’ve got greed on the other side. The market turned up yesterday. Over lunch, I was talking to some friends and I say, “Yeah, we’re going to dive in now because the market turned up. It already bottomed out.” It’s like, come on, please. Don’t do that.

Gabriel Lewit: Yeah. So, okay. We’ve got one or maybe two more of these here. Hopefully you find these interesting. I think they’re really interesting to see what you hear out there on the news, because what I find interesting about it is as you read more of these, you know what you realize? There’s absolutely no consensus across all the pundits and financial “experts” that are out there. Everybody has their different tact, and thought, and opinion. So isn’t that confusing if you’re an investor out there?

Steve Lewit: I think it’s very confusing.

Gabriel Lewit: I think it is too.

Steve Lewit: I think the folks that listen to TV or get newsletters and buy/sell recommendations, it’s like, how do you know who to believe?

Gabriel Lewit: Well, I just read something about Cramer, that last Mad Money. And last, I think it was just last November. He was telling people, “No, there’s absolutely nothing to worry about with inflation. It’s transitory, trust me on this one. It’s going to be a nothing burger.” Sure enough. You know, it’s like, that’s certainly the opposite of that. All right. Well, let’s look at another one of these here. We’ve got the head of a national retirement resource organization said, “If it were me and I was going to declare that I’m retired and have my retirement party, I’d look to delay it a year or even two if I could.”

Steve Lewit: Where did you find these? Did you work hard on finding these?

Gabriel Lewit: You know how much time at night? So I put my kids to sleep at night.

Steve Lewit: You never sleep.

Gabriel Lewit: At around 8:00 PM. And then I have to sit in their rooms for about 30 minutes while they fall asleep. Oh, it’s either one or the other.

Steve Lewit: This is what you do?

Gabriel Lewit: And I just browse financial articles on my phone.

Steve Lewit: I’m glad you took a vacation.

Gabriel Lewit: You know what’s funny though, I like doing it.

Steve Lewit: You know, this is ridiculous. If you have a plan and you plan to retire than your plan works…

Gabriel Lewit: Okay. What is your grade of that advice?

Steve Lewit: Oh, that’s a D.

Gabriel Lewit: D? I was going to give it a C-. I think…

Steve Lewit: Why? Why would you just declare work another two years if you don’t have to? If you’re miserable in your job.

Gabriel Lewit: You know what I don’t like about it, I don’t like any real blanket statement.

Steve Lewit: Yeah.

Gabriel Lewit: But let’s say if you have a very high amount of money that you need, depending on how much money you’ve got saved and you saw a bigger drop to that, it could be wise advice. It could be. Now, if you have a small amount of money that you need, it may… I have a lot of clients that have way more money than they need. And they are worried because they hear stuff like this, that they should push their retirement back a year or two. I say, “Why would the world would you do that? Yeah, you’re good.”

Steve Lewit: Yeah. So it’s very individual.

Gabriel Lewit: It is, that’s why I would rank it a C-. It’s not per se bad advice.

Steve Lewit: Its terrible advice.

Gabriel Lewit: But it’s very much not individualized.

Steve Lewit: It’s a D Gabriel, because he should have said each person is individual.

Gabriel Lewit: Do you know what C- and a D are pretty close, right?

Steve Lewit: But it’s a D I mean, my world D is very far from C-. C- says it’s got credibility and it’s okay, but a little… It’s not okay. You don’t just work an extra two years.

Gabriel Lewit: I didn’t know we had a formalized rating system.

Steve Lewit: Definitely we do.

Gabriel Lewit: Got it. Okay. All right, and then there’s of course you’ve heard this one before. It’s not a timely one, but one you’ve heard a classic Warren Buffet, two famous pieces of advice. The most important thing to do, if you find yourself in a hole is to stop digging. The old Oracle, that’s what he says. And then he says, be fearful when others are greedy, and greedy when others are fearful. What do you think about some of this old age wisdom?

Steve Lewit: I think Warren gets an A, because he’s Warren.

Gabriel Lewit: That’s the answer?

Steve Lewit: I’m not sure I agree. Anything he says is like an A.

Gabriel Lewit: Well yeah, it’s Warren it’s got to be an A, right?

Steve Lewit: Yeah. You know, if you’re in a hole, what does it mean stop digging? You know, does it mean, I don’t know what that means really.

Gabriel Lewit: So that’s why I actually, I think it’s funny you mentioned that, I think it’s really, what’s the word? Poignant?

Steve Lewit: Poignant yes.

Gabriel Lewit: Statement. Because you’ll sometimes hear advice out there that’s so like eloquently…

Steve Lewit: That sounds great.

Gabriel Lewit: Verbosely worded. And, and you’re like, “That sounds great.” But then you’re like, wait a second.

Steve Lewit: What does that mean?

Gabriel Lewit: What does that even mean?

Steve Lewit: Right. I’m in a hole I should stop digging. Well, how do you invest in stop digging? I don’t get, I don’t get it. All right. And the second one be fearful when others greedy, and greedy when others are fearful is a, it’s like a timing strategy. It says buy when others are running and don’t buy when others are greedy.

Gabriel Lewit: Well, the first one almost even sounds like it’s a timing strategy, right? If your investments are digging in the hole, going down is you digging the hole? Then to stop digging would mean to sell your investments so they don’t go down. But that’s not a good advice.

Steve Lewit: No, that’s terrible advice.

Gabriel Lewit: Yeah. So I give this a, I’ll give it a C+. A C because it’s Warren Buffet, but I don’t necessarily think it’s great advice.

Steve Lewit: Yeah. I’m giving Warren a D because I don’t think it’s any advice. I almost gave him an F on this, but it’s Warren Buffet.

Gabriel Lewit: You can’t do that.

Steve Lewit: I can’t do that.

Gabriel Lewit: All right. So folks, what advice are we giving? You know this, because we say it on the podcast every week. Trust your plan. You have a plan that we’ve helped build for you. When we build your plan, we’ve stress tested for all the possible negative things that could occur. And you’re still in good shape if you’ve got a plan with us. That’s what’s going to make it your plan, we don’t give you plans that show you in bad shape. And so ultimately when we’ve got that plan in place, you can effectively just put your blinders on or put your earplugs in for all of these different types of pundits that you’re going to hear out there. And just remember that there’s a lot of noise out there. And in many cases it’s wise to just not listen to it.

Steve Lewit: Well, it’s not good music.

Gabriel Lewit: Not good music.

Steve Lewit: Not good.

Gabriel Lewit: Muzak.

Steve Lewit: Muzak, do you remember Muzak in the elevators?

Gabriel Lewit: Oh yeah.

Steve Lewit: Oh my gosh. I haven’t thought of that for a long time.

Gabriel Lewit: All right guys. Well, that’s our show for you today and we hope you had a good time joining with us and talking about some of the news articles. You know what, I liked doing this. I might do this more often. I mean, not like for another six months or so. But you know, periodically to see what the advice that you’re seeing out there and we’ll pick on it in grade it a little bit.

Steve Lewit: Well, you know there’s so many different ideas and different perspectives and different points of view and different arguments. And there are guys out there and gals out there that just market themselves in great ways. So people, like Cramer, he is a great marketing guy and people became think because he’s famous he must know what he’s doing. And he knows how to get famous, doesn’t mean he knows what he’s doing. So I think that.

Gabriel Lewit: Well, there’s even people that argue that what Warren Buffet did to become Warren Buffet wouldn’t even work the same in today’s world.

Steve Lewit: Exactly, sure.

Gabriel Lewit: So, it’s interesting as you see so many opinions out there. Well, we hope you’re doing great. Have a wonderful weekend. If you win that lottery, think of us.

Steve Lewit: No, if you won the lottery, they get this on Sunday, so.

Gabriel Lewit: Okay, you’re right. If you won.

Steve Lewit: If you won, call us, right.

Gabriel Lewit: Have a wonderful time and enjoy, and we’ll talk to you on the next show.

Steve Lewit: Stay well, everybody.

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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