Announcer:
It’s time now on KROS for Financial Focus, brought to you by Nelson Corp 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 representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member, FINRA, SIPC, investment advisor-representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor, Cambridge and Nelson Corp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Gary Determan:
First Wednesday of the month, so we get to visit with Dave Nelson again, via phone and good morning, Dave.
David Nelson:
Good morning, Gary. It’s great to hear your voice and a beautiful day out there today. Life is good.
Gary Determan:
That is for sure. I had, of course, the opportunity to cover your girls in their season opener. They were scheduled to play last night, but it didn’t get that game in with Central City. We’ll see you again with North Lynn. And you’re telling me both the girls and boys at Prince of Peace, going to run into some stiff competition next Tuesday.
David Nelson:
Yeah, we really are. North Lynn, I don’t know what the deal is out there, but they’ve got a couple of programs that really are rolling and have been rolling and they have momentum. They got excitement at the lower levels with the girls pretty consistently going to state, the guys quite consistently going to state, year in, year out. And it’s a little easier to build the program with that excitement and the younger kids wanting to be part of that and willing to pay the price as far as to get there. So yeah, it’s going to be a tough game. That will be our toughest game this year, no question about it. Will it be, like last year they had a pair of twins that were on the team and the one girl she reminded me, and again, when I say this, I think people think sometimes I’m nuts.
David Nelson:
But if you think of Steph Curry, as far as when that ball hits his hands, it’s already gone. So somebody passed it to him and it’s already gone before it hits his hands. It’s just remarkable as far as how quick his release is. She was very much that way. I mean, she would come off a pick, the ball would be in her hands and it’d be gone before we could get there as far as even with help. So it was pretty remarkable. She’s playing at a pretty high level, as far as in college. I can’t remember off the top of my head as far as the other program, but a real, real nice player. They had a lot of these people that are as good as far as scores are concerned, indoor facility, mom and dad had, she has a younger sister that’s now a 10th grader, so I can hardly wait. I’m being facetious, obviously, to see her because she’s got to be, I’m guessing probably something pretty special too.
Gary Determan:
You know, I did enjoy doing the broadcast, certainly looking forward to that next ball game, but things were a little bit different, certainly restrictions in place. Not nearly as many people in the auditorium there. I could hear the coaches and the players pretty well, Dave.
David Nelson:
I don’t know if that’s good or bad. Yeah. It really is. For those that don’t know, the kids are allocated two tickets, that’s it. And that’s a state issue so we don’t have packed gyms. People spread out, you need the masks on, at least in our facility. We’re trying to find out. As far as the teams we’re playing now, we haven’t had confirmation yet as far as Maquoketa Valley, that’s our next game this Friday. Then Tuesday, North Lynn, where the players themselves are wearing masks. I believe it’s highly recommended, but not mandatory. And I mean, some of these rules and I won’t get too much on my soap box here, but this is serious stuff. And to have people next to each other and banging on each other day in day out or game in, game out, we think the idea of wearing a simple mask is probably a pretty good idea.
David Nelson:
And certainly we’re mandated in our gym, mandating our players, wearing it, fans, all wearing it. And again, it’s a serious problem we have in America and it’s getting worse by the day. And so things that wouldn’t be mandatory, just kind of mind boggling. But yeah, the girls, you saw it. We were pretty ragged, no excuses. I’ve had people, “What you think?” And I said, we literally had one practice where we went up and down the court because we didn’t have enough players. We have that many players that had been exposed to COVID. And so we’re routinely practicing with seven, eight players was a good night where we could go four on four, and we did everything in half court. We just couldn’t get any rhythms. But as I shared with the girls, as far as before the season even began, I said, if it was going to happen in a year, this is the year that I’d like it to happen.
David Nelson:
And they all looked at me stunned. These are mostly seniors. And I said, because we’re not going back to the basics. I mean, you guys already know what we want to do. There’s no change, that essentially we’re making, we just need to improve as far as what we’re doing. We had, I think, an advantage there, that will disappear obviously. By mid-season, everybody will be in full swing, but we’re hoping in the early part of the year, we can use that to our advantage. And I think we did the other night. We did have a lot of confusion. It wasn’t real pretty. We had 13 turnovers, which, relatively speaking for a girl basketball game isn’t bad. But we didn’t get pressured or anything like that and still had 13 turnovers. I wasn’t really impressed with that. Our shooting percentage just wasn’t even close to where it needs to be. But again, we have good kids working hard trying to do good things and through time, I believe it’s going to come together.
Gary Determan:
Yeah. And visiting with Dave Nelson. Now I know your nephew, Brian Peterson, is an assistant coach on the division one level. Have you heard anything from Brian at all, Dave?
David Nelson:
I really haven’t, been kind of in a bubble from that standpoint. Any discussions that we’ve kind of had, family-wise, have just been around mom and dad as far as just trying to make sure people get over there and drop off food and whatever, those types of things. My parents are up in years, so that’s literally been the dilemma. I’m hoping things are okay and they’ll have a season, I guess, that things work out. But I probably know less than you in that regard, Gary. I apologize.
Gary Determan:
No problem. You know, before we do take the break for the weather, of course, just in the news this morning in Britain, they do have the vaccine. They are now going to start implementing that. Possibly next week in the United States, of course, you hear about people looking at Moderna, as far as the stock. What are your thoughts?
David Nelson:
So it’s really interesting as far as to see how this is unfolding. I mean, there is the investment side of it, which I’ve discussed at various mediums, as far as the TV, I’ve addressed it. As far as last month, as far as you and I discussing, and the stocks have continued to go up. I mean, they haven’t gone up dramatically. The big pop took place very early on with speculation. As far as that, these might be some of the winners. The stocks really, really ran hard. And again, as some of the good news is coming out, as far as the speed and getting this out to individuals, the stocks had moved up more. And again, I’m not talking about 50% moves in a week. I’m talking about three and four and 5% in a week, which is still quite amazing when you stop and think about it.
David Nelson:
But the news that you referenced as far as in the UK is just really exciting. They are going to be doing it really soon. Now in the states here, the speculation is still mid-December is I think where people start getting vaccinated here. That too is very exciting. So it sounds like they are a week, maybe two weeks ahead of us, but now it’s who gets it. And again, in the states, it’s been announced as far as the logical people, the nursing homes are going to be the ones getting it early on, older people in general, and people that are interfacing as far as with sick individuals. So physicians, nurses, et cetera. But the big issue is now who’s going to be willing to take it. So the vaccine will be available to the masses it sounds like March, April, next year is probably a realistic timeline.
David Nelson:
Will people be willing to take it? Will all of the medical workers be willing to take, all the people that work in those medical facilities, the people cleaning, et cetera, et cetera. I mean, there’s a lot of heads that need to be protected and the hope is that they’ll take it. And again, most of them I think or all of them at this point, the belief is that it’ll have to be two doses that individuals now have to take. One now, and I think the timeline is give or take 30 to 90 days, depending on the particular research out there. And we’ll get that tightened up in time too. But yeah, this is really, I mean, obviously in your lifetime, my lifetime, and I think probably everybody out there listening, this is the big daddy of them all and getting this right is really important.
David Nelson:
Having people believe that we’ve got it right, is really important. And the Moderna study is probably the one I’m most familiar with. They’ve had a few people that have contracted the COVID and the medication didn’t prevent it. But the bottom line is that the symptoms were almost nonexistent. And so I like the percentages. I will be in line if Dr. Fauci says jump, David’s going to say how high and just do it. And so I hope a lot of other folks are in the same boat, because again, this isn’t just a personal decision. This is a community decision that we all need to make and a country decision we all need to make. And I’m hoping everybody understands the benefits that are going to come from this. And again, it will be a win for all.
Gary Determan:
All right, Dave, we’re going to take a break for the weather, but after that, let’s talk a little bit about November was pretty good for the stock market. How will that affect the Santa Claus rally? And of course, last time we visited with you, we had a presidential election. So we’ll get your thoughts on that as well. All right. 1545 Weather brought to you by Petersen Hagge Furniture.
Eric Sorenson:
Good to be with you here on a Wednesday, halfway through the workweek heading in toward the weekend. It will be sunshine expected for us into the afternoon, 43 degrees. Tonight clear, down to 23. 45 tomorrow. Still mostly sunny heading into the weekend, 47 for Friday and Saturday, maybe a degree or two cooler on Sunday, but we’ll pull into the low and mid fifties for Tuesday and Wednesday of next week. No chance of any rain or snow for at least the next seven or eight days. Our weather continues all the time wqad.com and News 8 app. I’m Storm Track 8 meteorologist Eric Sorenson. Fair skies, sunshine, current temperature right now, 22 degrees. Winds remain light out of the west. Our update brought to you by Petersen Hagge Furniture.
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Gary Determan:
First Wednesday of the month. So we continue to the bottom of the hour with Dave Nelson here on Financial Focus. Well, November, Dave, was actually a pretty good month, as I understand, for the stock market. Now there’s concerns about Santa Claus rally. Let’s get your take on that.
David Nelson:
Yeah, you’re right. I mean, these were bone crushing gains that took place as far as this past month. And again, the Santa Claus rally, for those that don’t know, it, historically, when you look at it on an annual basis, some of the best months are November, December, January, and it basically is built around that idea that people are going to be out, they’re going to be spending money. We’re watching closely as far as how much people are spending. And again, stocks react accordingly. And so historically, some of the best returns have come during this time of the year. Now this year, what’s interesting is, again, when we look at stock market returns and we talk in very generic terms, as far as index, in other words, like the Dow or the S&P 500, it kind of distorts as far as what’s really happening underneath.
David Nelson:
And so without putting people to sleep, I want to really make this distinction that if we go back and look over the last five to 10 years, technology and technology stocks have absolutely dominated, just destroyed pretty much every other stock. I mean, in other words, the returns have been massive or other areas of returns have been good. What is happening as far as with this COVID is we find that there’s some real big, big winners that have come out of this. Again, this is not to apply that people are trying to purposely profit off of this. It’s just to say that you and I aren’t as comfortable across the board going out to maybe a restaurant. And so if we were to look in the rear view mirror, since the COVID event took place, and you’re talking about publicly traded type restaurants. So in other words, the big chains, you would see that those stocks have been hammered. I mean, just really beaten up.
David Nelson:
Whereas if you look at the Amazon world and technology companies that can potentially make your life better, as far as if you don’t have to go out, et cetera, et cetera, UPS of the world that are now transporting a lot of that stuff, and that’s transporting it, those types of stocks have just gone straight up. Now, then it looks like we have a COVID vaccine, which again, I don’t remember, these days all run together, but give or take, let’s go back a month when some of the bigger announcements had been made. What you found is that the rotation, which is, again, a fancy way of saying what’s already worked. In other words, a lot of the technology-type type companies.
David Nelson:
Now we’re kind of lagging as far as the other ones and some of the big winners like the cruise ships, those types of companies, the restaurants that now people believe, investors believe, that in a very short period of time, the people will be back in those venues spending money and with the stock prices as low as they are, it’s a good time to buy. And so basically what’s happened is a lot of those stocks that had these really massive short-term runs. So if we put all that stuff together, we come up with an index composite of a lot of that stuff, basically amounting to about a 10, depending on what index and the 15% return for the month, not for the year, for the month. And those are just staggering numbers. And can that pace continue, of course it can’t continue.
David Nelson:
And again, people are quickly, I mean, the money flooding into the stock market in the last couple of three weeks has just been staggering. And again, that contributing to these prices going up. Well, that’s all rear view mirror stuff. In other words, looking back. Looking forward is the hard job, it always is. As far as to try to figure out what direction do we see these things unfolding and looking like. If I were a betting person, like again, I brought up on this program probably hundreds of times through the years is that I always like to think in terms of buying up on sale. And so if we think about that analogy, there’s a great example to try to illustrate what I’m talking about here. So people say value stocks. What does that mean? Value stocks are stocks that historically have done okay. But now for whatever reason, they’re out of pace, which is basically the period we’ve been in.
David Nelson:
You got big quality companies that for whatever reason, people just didn’t want to own them. They wanted all these high flyers during this period. So I parallel that with you buy a value stock, and if they get roughed up, it’s like falling off the front porch. Now, if we talk about the technology stocks and growth stocks, that example that I would give people when that stuff, because that stuff is hot or cold, that’s like falling off of the roof. So again, most folks out there probably at this point in the cycle, if I were you, I would be probably focusing on the type of stocks that you’d be falling off the front porch. In other words, they still can go down, but they’re not going to go down dramatically because they’re already kind of on sale. The growth stocks, aren’t on sale. I mean, there’s just no getting around it. Those stocks are really expensive. Could they get more expensive, of course, they could. But the bottom line is at this juncture, they’re quite expensive and probably have a fair amount of risks attached to them.
Gary Determan:
Very interesting. I always like the way you put things, falling off the porch or falling off the roof.
David Nelson:
You’ll never forget that, Gary.
Gary Determan:
It’s true. I would rather fall off the porch.
David Nelson:
The difference between the type of stocks. People when they think of the stock market, it’s like it’s one stock. It’s not, there’s all kinds of different flavors out there. And again, the people I work with, generally speaking, are pretty conservative individuals. They are not interested in home runs or strikeouts. They’re interested in singles and doubles. And so it’s a nice visual, again, a way to think about it and understand the difference, in my mind, at least, between value stocks and growth stocks.
Gary Determan:
Very good. We’ve got about seven minutes left in the program. Again, we will have a new man in the White House come the first of the year. Your thoughts on that.
David Nelson:
Yeah. You know, it’s always a touchy subject because again, people, the tribal aspects that have certainly shown their face over the last probably eight years give or take. And we put out a update, a little memo, trying to be as objective as we could, as far as trying to explain to people what’s happening with the election. And somebody responded back and said, this thing isn’t over yet. And as we write to gently and nicely as we can say, it’s over, whether people like it or not, and whether I like it, it’s over. The reality is now, what are we going to do about it? Our job isn’t picking the president or showing favoritism there. It’s dealing with the environment that exists and the environment that exists today is again, we have a market that’s expensive and people can argue that it’s gone up the last three, four months because of the election and people looking at Wall Street now and saying, they like what they see.
David Nelson:
That isn’t just because of the president, that’s where I guess I get a little ticked off when people start drawing conclusions. The president matters in such a small way when we talk about my world, my world being the investing world and people put way too much stock in that. We had two people we came across that said, if so-and-so wins, we’re moving out of the country. They have a lot of money and so they just figured taxes were going to go up. And I just chuckled because it’s such a, in my opinion, a ridiculous statement. What people need to understand is that the House and the Senate matter as much or more.
David Nelson:
So I’ll give you the conclusion of all this stuff. If you look at the Democrat versus the Republican in the White House, it’s close to a push as far as the return. But if you look at and go deeper, which people really need to, when you have a House and the Senate that lean one direction and the president’s the same direction, then you can have, okay returns, but not very good returns and vice versa. The best is when you have a flipped House and Senate and a president that is obviously tied to one. When you have gridlock in Washington, the stock market loves. And people say that’s crazy. Why would that be? And I said, because Wall Street likes certainty. They don’t like guessing as far as what’s going to take place. They like to have a good feel as far as where various parties stand and it’s easy to invest and corporations are more willing to go out and spend money when they have that feel.
David Nelson:
So what Wall Street is basically been saying, and the investing public has basically been saying for two, almost three months now, is that it’s going to be split. The White House is going to change and we’re going to have the Senate dominated as far as by Republicans. Now, whether it’s dominated or whether it’s just one vote, it doesn’t matter. The end result is that they can block what they want to block. So from an investing perspective, I think people should really look at this and say, this is probably, probably, I want to emphasize probably, none of us know for sure, probably utopia here that we find ourselves in as far as for the foreseeable future, at least. Meaning that we have gridlock there. Now, tax issues and all that stuff, as people probably already know, there was a lot of yapping going on about that as well.
David Nelson:
Tax issues are going to be almost status quo. There’s going to be very little tweaking taking place in Washington, as far as taxes. David’s soapbox discussion that I have with everybody that will listen to me and will put up with this is the biggest concern we should all have is the debt that we have. And this deficit that we have just gets worse and worse. And we have no level heads in Washington. And the bottom line is we’ve been spending money like crazy. Do we need to do more stimulus? I mean, if I had to vote on that today, I would say, clearly we do need to, but then we need to get serious about this. We have a stock market that’s been rallying for again, roughly 10 years straight. And yet we’re reducing the amount of inflow coming into the government.
David Nelson:
That I don’t think people understand. The cashflow to the government was being reduced. And that shouldn’t happen. We have got to, when we have good times, make sure that we have our hand out and start collecting more to try to get this debt down. The only way that’s going to happen is we got to be realistic and we have to be open-minded and I hate paying taxes just like everybody else. But the bottom line is we live in a great country that we have lots of social programs out there. We have roads that need to be repaired and it takes money. And so again, we got to be big boys and girls, accept the fact and deal with it. And if we want this democratic society that we all live in to survive, because at this point in time, we want our cake and we want eat it too. And that’s just not going to work.
Gary Determan:
Time has gone by so quickly as it always does with you. But before we do leave, we want to talk about what you are doing once again with the toys and the food donations. If you can explain again how important it is for Nelson Corp.
David Nelson:
Oh, it’s so important for us. It’s so important for so many people out there that are struggling and I know time is tight. So I’ll give you the abbreviated version, Gary. But in a nutshell, what we’ve always done is we do a Christmas party and we ask clients to come kind of the entry fee, if you will, is to bring along some canned goods, potentially something like that, non-perishable, and then a toy if they would, as far as for a youngster, something wrapped and ready as far as to handoff to the various groups in our area, that distribute this and do all the very important work in that regard. And then what we do is we do a match and the bottom line is, we throw cash as far as that all these organizations so desperately need. Well, this year, the party is off. We’re still doing a drive-through. And I think our numbers are just absolutely crushing, higher than we’ve ever had. There’s going to be literally hundreds of cars one night, traveling through looking at the lights as far as up at Eagle Point.
David Nelson:
And we’re hopeful that people either bring a gift up there along with a toy and or we have literally a big wrap box that’s probably four by six feet, that every day we pick up and move out there and people can drop off their stuff, food, toys, whatever here, if they don’t want to bring it up as far as Eagle Point. Again, real crucial, I don’t know how to say it any other way, that the need has never been greater and we need to step up and we need to do our part. And I don’t mean to lecture people. I’m just trying to remind everybody that there are lots of people, we all are going through tough times.
David Nelson:
I should say most people are going through tough times and those people need some help. And this is our small way, trying to make a difference as far as to make some of these people not go to bed hungry every night. And again, maybe to have something for the youngsters to hold on to because mommy and daddy or grandma, or grandpa, or whoever they happen to be with, doesn’t have the financial means to pull it off on their own right now, because they’re in crisis mode. So we want to make a difference and we’re going to make a difference. And we value and appreciate everything that folks out there have done, our clients have done through the years, and we’ll continue to do our part as well.
Gary Determan:
All right, Dave, thank you so much. Merry Christmas and a Happy New Year to you.
David Nelson:
Thank you, Gary. You as well. To everybody else out there, thank you.
Announcer:
Financial Focus is a production of Nelson Corp Wealth Management in Clinton and Davenport. 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 FINRA, SIPC. Investment advisor-representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and Nelson Corp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.NelsonCorp.com.