Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly.
Registered representatives, securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA, SIPC, Investment Advisor Representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice.
Now here’s today’s Financial Focus program.
Gary Determan:
Well, Dave Nelson has made it up the hill. He joins me in the studio. I saw you out at the River Queen/Clear Creek-Amana ballgame last week.
David Nelson:
Yeah.
Gary Determan:
We were both impressed by the play of that senior for the Clippers.
David Nelson:
Yeah, again, just a solid ball club. But when you have a girl that can light it up like she did, 38 points. The Queens put up a great fight, and what a great season as far as that they had. I was lucky enough as far as now that I have been in the coaching ranks, I can kind of go around and check out some of the other teams.
I used to think these guys were nuts, some of the retired coaches and whatever. I’d see them show up at my games, and I’m thinking, “Why are you here?” Now I’m one of those guys that’s going out there and really enjoying it.
That club, people have said, “What do you like? What don’t you like?” I said, “I like their energy.” I said, “They compete. Not everybody is willing to do the things that they did.” I said, “The first step of,” and I’m a little biased here, since the father works for me, but the Ferguson girl, I mean, at 5′ 6″, 5′ 7″, real world, her height, and she’s in there competing with some of the bigs and what have you.
There was one play as far as in front of the other team, the Tiffin team’s bench, where she just literally dove. I don’t know if I’ve seen a player do something like that, in just no regard for her safety, and dove for a loose ball. And it was just, “You’ve got to be kidding me.” So, the energy, the effort, it was just there, and it’s fun to have teams like that.
Through the years, I’ve had some ball clubs, and I’ve had some players as far as that, that really go. You love the coaching. Again, those type of players don’t come along every day. The point guard for them, they’ve got another, the off guard, I guess I would probably call her, man, that girl’s feisty. Again, I’m saying this in a very positive way.
I like competing, as far as myself. I like to coach kids that love to compete. That group of girls, they wanted to compete. They’re out-classed, as far as when it’s all said and done. I mean, the odds of them winning that game were pretty low, but you never know. And so, that’s why you play the game.
But yeah, it was a joy to go out there. Again, my expectations were it’s going to be a really, really tough game, and the odds of winning are probably pretty low, but you just never know. So, it was fun.
Gary Determan:
I know why you play. You were talking about it when you were talking with Ferguson, and I referenced on air, it looked like she was diving into a pool.
David Nelson:
Yes, exactly. Exactly.
Gary Determan:
I mean, she just dove for the ball.
David Nelson:
Yes, exactly. There was, I mean, she just flattened out. It’s kind of like that Dennis Rodman kind of famous play, as far as that he had. I’ve described it to people. I said, it’s like a defensive lineman in football, that there’s a loose football, and they’re literally diving at it. But they have pads on. They have all kinds of… She had none. She had to be so sore the next couple days. But anyway, that’s that.
I love the point guard. I mean, that girl just, she’s a grinder, and just a fun team to watch. And so, yeah, I think positive things for them, as far as going forward. I think you’re going to have a nice season.
My old team, Prince of Peace, had a tough year. Hopefully next year we’ve got a decent group of eighth graders that are coming in the ranks, and just happen to have one that is mine, as far as my oldest granddaughter. She’ll be coming into eighth grade next year. Into ninth grade, if I said eighth grade, I didn’t mean that. In ninth grade. She’s currently eighth grade.
So anyway, so we’ll see. So hopefully we have a couple teams in town that can compete, and have some success as far as on the basketball court. And the guys, hopefully the same. But I’m not going to as many of those games as I am as far as the gals are concerned.
Gary Determan:
You’ve got to be careful. Some of those coaches might have you do some scouting for them.
David Nelson:
Exactly. A possibility.
Gary Determan:
We’ll talk one more basketball point.
David Nelson:
Sure.
Gary Determan:
I referenced this to you and you agreed totally. I mean, you get a girl 5′ 11″ to 6′, 6′ 1″, who can shoot, handle the ball, can be a dominant player in girls basketball.
David Nelson:
Yes. Yes. Yeah, very much so. And again, there’s not a lot of them out there. That’s why they stand out when they do. Saw this team warming up, and I had some of the Clinton High fans as far as behind me that I know quite well. I said, “Boy, we’re going to have to get to the hole. We’re going to have to draw some fouls, as far as on these kids, because these girls can shoot.”
I compared it, and I meant it, that I was watching them do their shooting drills before the game, watching their hands, as far as the rotation on the ball, all these little things. And I’m saying, “This looks like a college team. This looks like the Iowa girls warming up,” as far as the number of shot attempts, versus the number that were being made. And I said, “Again, there’s one thing to be said for nobody’s guarding you and whatever.”
I get all that stuff. Been around the game a long time. I get it. But this team I just knew was going to be tough, and that girl in particular, she was not afraid to go three, four feet behind the three point line, and let it rip. She did early in the game, and just set the tone for the entire game. A few of her teammates got into it, and we just had her hands full. But we got it down.
And I say, down. It was roughly, I think 20-ish, give or take, a lot of the game. Got it down to 13, and it looked like, man, maybe we can push this thing to single digits, and whatever. And so, the girls never gave up. Again, leaving that game, I felt pretty good about it. They were probably all bummed, but I said they really, really fought hard, and there’s nothing to be ashamed of, as far as that outing.
Gary Determan:
I was in Des Moines yesterday covering Central Dewitt, and they ran into a player typical of that, a 5′ 11′ sophomore, who averages 30 points a ballgame. Birmingham is her name, for Norwalk.
David Nelson:
Norwalk. Okay. Whew.
Gary Determan:
She took over the ballgame in the second half. She had 10 at the halftime. She ended up with 26 in the game.
David Nelson:
Really? No kidding.
Gary Determan:
She put together an eight point run on her own, in the fourth quarter.
David Nelson:
No. Oh, boy. Oh, boy.
Gary Determan:
So, yeah, that is tough.
David Nelson:
Boy, Dewitt sure has a solid team. I don’t know, again, as far as looking at them, I saw them twice this year, and said that there’s no real size that they have, but they’ve got a lot of just people that play well together. It was a fun team to watch, as well.
Gary Determan:
Got a good coach, and that always helps, doesn’t it, Dave?
David Nelson:
Yes, it does.
Gary Determan:
To have a good coach?
David Nelson:
Exactly.
Gary Determan:
All right. We’re going to take a break for the weather, and then we’re going to talk some business.
David Nelson:
All right. Let’s do it.
Gary Determan:
With Dave Nelson.
David Nelson:
Look forward to it.
Gary Determan:
Our weather brought to you by SKelly’s Designs.
Andrew Stutzke:
Watch out for areas of dense fog early this morning. That will burn off by the late morning, revealing cloudy skies for the afternoon. Temperatures today a little bit warmer as we reach the low 50s. For tonight, mostly cloudy skies. Can’t rule out a shower late. Overnight lows will be near 40. With your Storm Track 8 Weather Impact forecast, I’m meteorologist, Andrew Stutzke.
Gary Determan:
Right now we have that fog lifting. We’re at 38 degrees. Our update brought to you by SKelly’s Designs.
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Gary Determan:
First Wednesday of the month, so we get to continue to the bottom of the hour with Dave Nelson. Well, it would be an understatement to say that things are in flux right now, not only in the financial world, but in the world.
David Nelson:
Really, it’s the ripple effect from the world, as you described it, as far as what’s taken place, is going to make things very interesting, I think, for the next several weeks, and hopefully just a few weeks.
I’ve been asked numerous times as far as since, various publications, various TV segments that we’ve done, “What’s your advice?” And historically, it takes four to six days to kind of sort through this. We’re getting close to that fourth day. Today it was reported by the New York Times, I guess, that after the first day, that there was a group from Iran that reached out to the CIA, as far as to talk about negotiating. I guess the word came that it’s too late.
So yeah, when you see drones hitting hotels, really expensive hotels in Saudi Arabia and other places, it sure makes you wonder. There’s a lot of people that are trying to get out of the Middle East right now and can’t get flights or anything. And who wants to go in the air now, as far as knowing what’s out there?
So, it’s really crazy times. Again, time will tell whether this was a prudent move or not. There’s certainly some arguments for it. This is a horrible regime, and they have been for quite some time. But the ripple effect, as you described, there’s a lot of innocent people that are dying, and it’s unfortunate.
Again, the ripple effect from our standpoint, looking at the investment world, is that account balances don’t look as attractive today as they did two, three days ago. And so, is this the end, and we’re going to ratchet up as far as from here? Are oil prices going to be such that the gas prices go up pretty dramatically in the foreseeable future? That probably is going to happen.
So, it’s anybody’s guess for sure what’s going to take place. I tell people, “We’re financial advisors, we’re not geopolitical experts.” We’re not military experts. So we don’t know. But making rash decisions at this point in time probably doesn’t make sense. So subsequently, we’re sitting quietly right now. Fortunately, we have a few investments in the portfolio that when stuff like this takes place, they actually do okay.
But yeah, it’s going to be a wild, I think, several weeks. And even when it’s done, I mean, what does Iran look like at that point in time? Are we able to get somebody in there that’s moderate? They talk about finding that moderate. Does a moderate exist? Are they still alive if they were a moderate in that world? I just can’t imagine that if you position yourself as a moderate, that you’re still alive.
So, anyway, boy, this is going to be tough. Again, I’m not smart enough to know if this was the right move or not. Again, I love all the experts out there that know. What I don’t like, and I’m pretty vocal about this, is this tough guy mentality that we hear as far as some of the leaders, as far as that they just act like tough guys. Tough guys, it doesn’t cut it, because there’s a lot of ripple effect that affects the small guy, the little man as far as out there. I’m not a big fan of that.
Gary Determan:
And it brings to point the global aspect now of the financial world. I mean, it has been that way for some time, but now you certainly see it coming to the forefront with what is taking place in the Middle East.
David Nelson:
So, big picture, last year, international investments actually outperformed most US, what are called indexes. So, just kind of like the S&P, and the Dow, and the NASDAQ. First year for a long, long time, that that took place. This year, we were starting out having spectacular returns, as far as international investments. Combination of they’re undervalued in comparison to the US companies, one.
Two, the dollar’s dropping in value, which translates into bigger returns as far as abroad. So, you put it all together and it was a really, really good start. I’ll highlight one in particular as far as South Korea. South Korea was up, give or take, like 40% year-to-date. I mean, we’re not talking 10 years, we’re talking about just year-to-date.
They’d been crushed over the last couple years. So, what would look like a really nice investing opportunity, as far as to invest internationally, and more specifically as far as in Asia, and South Korea, even drilling down more in a very short period of time, has disappeared, as far as much of that return. Not back down to ground zero, but getting closer as far as to it.
So, these moves happen and they happen quickly. Again, time will tell, as far as how long it takes to unfold. But the type of investments that we’re big fans of, and I’ll say this, and try to make it as easy to comprehend as possible. Growth investments have worked over the last 10, 15 years. Growth investments are primarily, you’d say technology, generically, is probably a way of thinking about it.
And then you have the other stuff that we call value stocks. And that would be kind of a lot of the other boring type stuff, like companies that aren’t cutting edge and excitement, but they just put out product year after year, and people buy it, et cetera, et cetera.
So, as I would explain it to people, they say, “Well, what’s the main difference that you see in us understanding?” And I said, “Think of value investments as falling off the front porch.” So, the market turns upside down. Yes, they’re going to probably go down, too. But it’s like falling off the front porch. You can kind of survive that one. It’s not going to feel good, but you’ll be okay.
Growth investments, basically it’s like falling off the roof. You’re going to get roughed up, and you’re going to get roughed up in a big way. And generally speaking, in that example, it’s quick. And boy, are we seeing that now, as far as many of these growth investments, the AI type stocks, the international companies that were in technology. These companies are down 20 and 30 and 40% in like two to three days.
So, it’s important to be careful, folks, as far as in investing. It’s important to somewhat understand what you’re buying, and the pros and the cons. We had a gentleman drive over from Chicago yesterday, as far as to meet with us. It’s a friend of a friend that made his way as far as into the office. I spent probably a half an hour telling him everything that can go wrong.
I have one client in particular that likes to refer to me when he comes in for a meeting, as Negative Nelly. “So, what are we going to talk about today, Negative Nellie?” Last name being Nelson. “Nellie, what are we going to talk about?” My response to him is always the same, is that there’s a difference between being negative and telling the truth.
This person said he had spoken to three people as far as in the Chicago area, as far as this was a pretty good size account that this gentleman has, as far as his assets. And said they felt a little slippery. He didn’t hear anything come out of their mouth about what can go wrong. He appreciated, as far as me spending the time that I did, as far as explaining what can go wrong.
So again, it’s not to depress people. It’s basically to try to say, “This stuff doesn’t always go up.” And boy, are people seeing it now if they had the wrong stuff, as far as in their portfolio. Don’t do anything irrational right now. But yes, it could get worse, probably will get worse. It’s just a question of how much worse, and is it worth making a proactive move out, not knowing when to get back in.
And that’s the concern, as far as for the average person that’s out there.
Gary Determan:
I always like how you explain things, as opposed to falling off the front porch as opposed to falling off the roof.
David Nelson:
Yes.
Gary Determan:
I mean, that explains it pretty well.
David Nelson:
I think so. And again, people, stocks, bonds, our analogy there is, bond is like renting as far as a house. What’s nice about it is you don’t have to worry about the toilet’s broken, or the roof needs to be replaced. No big issues. But you don’t have any upside, because you don’t own the house.
Owning the house, yeah, that’s pretty cool over a period of time. That’s probably a pretty good move. But everything doesn’t always go right. Sometimes the furnace needs to be replaced. Sometimes the roof needs to be replaced. So, that’s a good way to think about the difference between stocks and bonds.
Bonds are relatively safe, as far as your principal is concerned. Stocks, not so much. Stocks, over a period of time historically have paid you probably two, maybe even three times what you’re going to make in bonds. Look at those numbers, folks, compound that over a period of time. It’s dramatic as far as the difference.
So most of the folks out there listening need both. It’s just a question of how much do I have in this bucket versus this bucket. And again, to me, I do this literally 24 hours a day, folks, and I’m not exaggerating. I dream about this weird stuff, and I have trouble keeping up.
So when I hear somebody wander in, and think they’ve got a pretty good grasp on things, I haven’t met that person, I guess is the bottom line. This is a tough business. And again, it takes discipline, and it takes an individual where they’re able to remove emotions and make logical decisions. That’s really, really tough for people to do.
Gary Determan:
Again, we’re visiting with Dave Nelson of NelsonCorp Wealth Management. We’ve got about another four minutes left in the program. So how do you convince someone not to take their money, put it in a jar, and bury it in the backyard?
David Nelson:
Yeah. It’s really hard. I’ll give you a very… It’s the worst scenario that I’ve ever experienced in 40-plus years. And it was down at St. Ambrose. It’s a really, really nice couple. I’ve now worked with them for probably about 10, 12 years.
But day one when we met, so we met in 2010. I’ll bring you back, folks, real quick here, 2007, 2008, 2009. The market got the heck beat out of it. The S&P is down, give or take 58%. This individual had his money in stocks as far as through the 401k, like a lot of people. He took the ride down, like a lot of people. He said, “I just can’t take it anymore. This thing’s going to go to zero.”
Sold basically at the bottom, and put the money into a guaranteed account, paying, at that point in time, roughly 4%, and missed out on the massive run that we’ve had, as far as in stocks during that window, after he sold or to the time that we met. And so, there’s an example of not putting the money in the jar in the backyard, but yet again, having a plan, having a strategy.
Most people don’t have a plan. They don’t have a sell discipline. Somebody comes in off the street, one of the early questions that flies out of my mouth is, “What’s your sell discipline?” They don’t have one, clearly. Nobody does, pretty much. But I want to challenge them as far as in that. Then I want to challenge them on the next one. “And what is your advisor’s sell discipline?”
Because this idea of just riding it out is just one of the dumbest things I’ve ever heard. You put your money in over time, you’re going to be okay. I can give you example after example that that’s not always the case. In the US, if you bought the NASDAQ in the year 2000 at the peak, and you took the ride down of 82%, it took you 16 years, folks, to get back your money.
Now, just ride it out. That is just one of the dumbest things I’ve ever heard. So, again, you’ve got to be careful. You’ve got to think about it. You have to have a plan before you invest, and it’s got to be disciplined and you follow the rule set. Again, most individuals in this industry don’t have that. It’s clearly most people that walk in the door don’t have that. And that’s basically, I think, why we’ve had the success that we’ve had. We follow a very disciplined approach.
Gary Determan:
Always been impressed by your passion.
David Nelson:
That, or being a loudmouth. I don’t know which.
Gary Determan:
Oh, no, no. I mean, there is no doubt that you enjoy what you do, and you enjoy helping people benefit from what you do.
David Nelson:
Sure. Yes. True story, yes. A lot of people out there need help. They don’t have an extra, as I put it, an extra million or two sitting around that they don’t need. Whatever they have is really important to them, and we need to understand that. We tell people, I’ll wrap it up with this, Gary, sorry.
But we tell people all the time, “Nobody cares about your money as much as you do, but we’re a close second.” Because we jump in the boat with them. We succeed as they succeed. We suffer when they suffer. So it’s a nice marriage, as far as that we create with our clients.
Gary Determan:
No fooling, we’ll talk to you again on April 1st.
David Nelson:
Oh, yeah. All right. Sounds good.
Gary Determan:
Thanks, Dave.
David Nelson:
Thank you.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly.
Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA, SIPC, Investment Advisor Representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.
Client stories may not be representative of the experience of other customers that are no guarantee of future performance or success.