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 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:
First Wednesday of the month, so Dave Nelson is joining me in studio today.
David Nelson:
Yes.
Gary Determan:
Glad you could make it today.
David Nelson:
Yeah, I came in just behind a big downpour, so I got lucky as far as the timing, as far as coming in here. Sounds like some of the folks that came in earlier got drenched.
Gary Determan:
Yeah, Sarah Harding. Becky from Sarah Harding came in. I mean, the skies just got so black. I know you walk the dogs early in the morning. You said you dodged some?
David Nelson:
I was lucky as far as the timing. I turned on the TV early and I was looking at my phone, and said, “It’s time to go.” And we got out and much shorter than normal. I like to try to get two to three miles in the morning. This was probably a little over a mile is all. But anyway, it was dry, so that was good.
Gary Determan:
So big news over the weekend. Your nephew, Bryan Petersen, is now a Division 1 Basketball Head Coach.
David Nelson:
Yes. It’s fantastic. He’s been an assistant for quite some time. And for those that don’t know, he’s a local kid. My sister Karen, Karen Petersen in town, this is their son. And he played at Clinton High, has several records I think that still stand. He’s in the Clinton High Hall of Fame. I mean, he had a really successful program in basketball.
He was a good athlete all around, but basketball was kind of his gig. And went the Kirkwood route. Two years there. From there, he went to Iowa State, started the last two years. And then went on to the coaching ranks, as far as at a junior level, and then an assistant coach. And then now he’s handed the keys to South Dakota State. He’s been up there for a few years as an assistant coach. And that coach moved on to Drake, and so the job opening came about, and they offered him the keys.
So I was really excited. It was, I think two days prior to him finding out that he was going to be the coach, or could be the coach, I saw it on one of the little runners on ESPN, that South Dakota coach accepts the position at Drake. And I thought, well, he’s either going to Drake or he’s going to probably get the keys. And I guess they hand him the keys.
So we’re really thrilled. Selfishly, we’re hoping he’d be a little closer to home, you could get to a couple games. But nevertheless, I’m thrilled for him. He’s paid his dues. He’s a really level-headed kid. I don’t say that just lightly. I can be very critical, as far as of people. But at the end of the day, level-headed kid, going to do a nice job. He loves coaching, he wants the fundamental part of it, as far as on the floor coaching. He’s not into the politics, as far as behind the scenes and dealing with some of that. But at the end of the day, this is going to be a really nice fit for him.
Gary Determan:
He became a graduate assistant at Iowa State after his playing days, so he worked under Greg McDermott, and then Fred Hoyberg.
David Nelson:
Yes.
Gary Determan:
Then after Kirkwood, went to South Dakota State. And Anselberger was the head coach.
David Nelson:
Yes. Yes, that’s right.
Gary Determan:
That was his first head coach. And then now this Eric Henderson who is now at Drake University. So he’s learned a lot. But he won two national championships at Kirkwood as the head coach.
David Nelson:
Exciting. I mean, again, I love… My career, as far as coaching varsity girl’s basketball, we’d sit around and chat. And I just listened to him. His insight, as far as the game, was so far beyond as far as mine had to be. It’s a very competitive world. And it’s a little different than being a volunteer coach, as far as at a high school program.
But yeah, got a nice resume. And again, I hope that he’s happy, as far as with a position. I hope it works out. Such a different world. You and I know that, as far as players, it used to be they committed to you and they’re going to be there for four years, what have you. Today, it’s who’s going to pay me the most money as far as the next position if I leave here and go somewhere else. And again, there’s pros, there’s cons to that.
I get it, as far as these individuals, again, if they can make a few bucks, many of them don’t have any money, good for them. The other side of the coin is, it’s certainly changed the game forever. And we’ll have to see, as far as from his standpoint, you get somebody at a Division 1, at their level, you build the kid up and whatever, and then the bigger schools have the deeper pockets, and they’re able to attract these kids as far as to come that direction.
And so the last couple of years, I know they had to a couple of really nice players, as far as up there. And one of them ended up over at Creighton, and had a really, really nice career with Creighton this past year. So anyway, hopefully he can get them, and hopefully he can retain them, and do a nice job, as far as for the program, as well as for himself.
Gary Determan:
I was listening to the Dan Patrick show last night. He was talking about, and this is Duke University, he goes, “Maybe the last outstanding four-year player would’ve been Christian Laettner, who went to the Final Four all four years, two national championships.” And now they’ve got Cooper Flagg, who’s going to be one and gone.
David Nelson:
One and done. Yes. Yeah, it’s something else. And this kid is amazing. But again, with the rule set as far as on the guy’s side, they can depart quickly, and many of them are. And this kid, actually, I haven’t watched one game. I’ve seen some highlights, as far as of him. And he is spectacular. I mean, this kid has really, really paid the dues.
Got the chance to watch last night, speaking of that. The deal girl that’s coming from California to Iowa to play for the Iowa Hawkeyes, she had a really nice outing last night, as far as, my son James said, “Hey, you need to turn on ESPN, Deal is playing.” And I’ve never seen any footage of this gal, but I guess she’s the real deal. And she held her own last night pretty well at the McDonald’s high school girls basketball game. So it was pretty cool.
Gary Determan:
Visiting with Dave Nelson, we’re going to go to the bottom of the hour. We don’t like to get too political, but the current administration has got to keep you guessing. I mean, “Volatile, uncertainty, what’s next?” That’s what you hear people saying. How do you folks navigate all this?
David Nelson:
It’s really tough. I mean, the tools that we use, basically, factor in very little, as far as politics. Decisions that we make typically are looking at what decisions are being made, as far as from a corporation standpoint, CEOs, what are they willing to do?
The uncertainty there is probably a bigger concern for us, as far as many of these big corporations have modified plans, put plans on hold, what-have-you, because of the uncertainty. And again, as you said, we don’t want to get political. This isn’t about politics. Both sides do plenty of things right, and both sides do plenty of things wrong.
But this is, and again, people say, “Well, it’s by design.” And other people say, “It’s chaos.” I don’t know what to believe, actually. But at the end of the day, it’s certainly putting some doubt, as far as in people’s heads, as far as out there, as far as what should I do?
Selfishly, again, we use really expensive tools, and these tools have worked quite well. As I’ve shared with you, as far as on prior sessions, Gary, when you and I have chatted, we pretty much sold the bulk of our equities across the board late December. And for a couple of weeks it really looked like a stupid move. I mean, really dumb. And we’re sitting there keeping our fingers crossed that the tools were going to work. And certainly they have, as far as looking at the last. That was the first couple weeks, look at the last several months, it’s been pretty much moving sideways to down.
So we’re sitting quietly on the sidelines with the bulk of the resources that we have been entrusted us, as far as from our clients, and hoping for better entry points than what we have.
So yesterday, pretty big day, as far as from a political perspective, as far as some elections that took place down in Florida. I guess they were to be expected, as far as a win for the Republican Party. They got the wins. And then up in Wisconsin, as far as this exciting election that has to do with Supreme Court. I mean, who’s ever dreamt of anybody about anything like that? Well, people did, and there was millions and millions spent, as far as to try to get it as far as one direction versus the next.
And so, the Democrats were able to grab hold of that particular seat, which again, way over my pay grade. I don’t know at the end of the day what it really translates into, but certainly, it’s Democrats are grabbing hold of it, that this is kind of the start of some backlash, as far as towards the current administration in the White House and the individuals that he’s brought along with him.
Gary Determan:
We’ll get into more. And I know there’s more to get into, but we’re going to take a break for the weather. It’s being brought to you by Kelly Heating & Air.
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Gary Determan:
We get to go to the bottom of the hour with Dave Nelson. Now, Dave, the other day on the news, I heard them say that it was a mixed market. Explain that.
David Nelson:
So for most individuals out there, that probably the most common index that they would be looking at would be the Dow. So the Dow’s been around since the ’20s, so we’re going back a long, long time. And the Dow consists of 30 different stocks. So most of my career, when people have said, “What’d the market do today?” they’re implying the Dow. They don’t know that there’s other indexes. That’s kind of what they think of. Generically, that’s what it is.
Well, again, it’s 30 stocks. So now, fast-forward to another index that we have, which is called the S&P 500. And the S&P 500 is 500 stocks. So it’s a much broader view of the market. And again, the Dow in the S&P typically move in sync with each other. If one’s up, the other one’s typically up. Not always, but probably 90% of the time, the two of those move in sync.
Then you have the other one, which is more current. It’s primarily technology type stocks. Not all, but primarily. It’s called the NASDAQ. And the NASDAQ, again, if you look at those three, that now is what we look at. We don’t look at just the Dow, we don’t look at just the S&P, we don’t just look at the NASDAQ. All three of them really matter.
So yesterday, we had two up and we had one down. Hence, we’ve got a mixed market. And again, there’s overlap with many of these indexes too. So like the Dow 30 stocks, I don’t know exactly, but I’m going to say 10, at least, are in the S&P 500. So there’s an overlap there. And each index is proprietary. Those people spend a whole bunch of money, as far as to create this. They make a whole bunch of money letting people use and make reference to these various indexes.
But at the end of the day, there’s a fair amount of overlap. And with that overlap, oftentimes, you’ll see all three up, all three down. And yesterday was a little different where we had two up and one down.
Gary Determan:
Okay. You were on television the other day and you said you had a pretty nice show. The presentation went pretty well. You got some notes there. I’ll let you go ahead.
David Nelson:
Yeah, the whole concept of the interview piece was what’s happening right now, as far as the volatility, and whatever, and what’s causing that. And so I put together just a couple things just as reminders for me. But I think most people know that there’s a lot of recession talk these days. Are we going to go into recession?
And yes, it was being tossed around a year or so ago, maybe two years ago. Now it’s really getting people’s attention, as far as the likelihood is growing by the minute. And so that’s, obviously, one big variable in creating some of the volatility.
Inflation concerns. Now, inflation versus recession, it seems like there’s a huge conflict there, as far as between the two. And there is. Inflation, typically, is implying things are running really, really fast. Recession is implying, oops, we’re going off the cliff, we’re going the wrong direction, as far as here. But both of those are still front and center as far as discussion points in the world that I exist in. The average person, hopefully, ignores all this stuff, but the world we exist in, these are really, really important.
And then the tariffs, that’s probably the biggest item. Client comes in, “What do you think of the tariffs?” Blah, blah, blah, blah, blah, so we have a discussion as far as that. The most recent one that I’ve brought up, we’ve been chatting about, that’s gotten a lot of attention as well in our world, is the FDA, the Federal Department of Agriculture. Bottom line, the gentleman that was ahead of that has resigned. And many other individuals that are part of his team, basically, have said that they’re going to be resigning as well.
So there’s a lot of pushback in some of the things that are happening now. Some people love it, “We need to fire a whole bunch of people, we need to get rid of them.” Other people are saying, “Hold the phone. These people are really important, as far as the future, making some really important decisions, as far as for our country.”
So again, I’m not smart enough to know who’s going to be right in that discussion, but many of the people on the inside that are in positions that they’ve been in for years, and many of them decades, have basically said, “We’ve had enough. And we’re stepping aside.”
I don’t know what that translates into, but I don’t think that’s going to be good news. There’s a lot of knowledge and brain power that’s gone into that, and that’s now going to be lost. And so, again, we got to rebuild some of this stuff. And again, I’m all for, I’m very concerned about the debt that we have. I’m very concerned about the deficits that we’re running. However, I think there needs to be a better plan.
Now, the plan in the past was let’s discuss this and we’ll make some adjustments. And that hasn’t worked too well because the deficit continues to grow. So I’m not stupid enough to realize that that’s been decade after decade that that’s taken place. So we have to do something differently. But I don’t know if this is the right approach. People say, well, let’s just wait and see, as far as what happens.
But there’s a lot of decisions that are being made that are going to basically be a really important variable as far as in decisions down the road. And that’s what concerns me as far as some of these decisions.
So, again, when it’s all said and done, there’s going to continue to be uncertainty. Today is liberation day, I guess is what we’re calling it. The tariffs are going to be slapped on many countries around the globe. So we’re going to see as far as what’s going to transpire the market, when I left, was down a decent amount this morning. So we’ll have to wait and see, as far as how things unfold.
Gary Determan:
Visiting with you through the years, we’ve always talked about how things have become more global, that it’s not just the United States, it’s all of all the different markets. So with all that going on, and the United States is the lead dog, I mean, how’s that affecting some of the other markets?
David Nelson:
Yeah, it really is. And if you look at the dollar, just in the last few months, as far as these talks have basically grown, as far as the tariff discussion, the dollar has basically started sliding.
Now, again, there’s a whole other discussion there, as far as is that good news or is that bad news? Typically, you want a strong currency so the world looks at you and says, “I’ve got confidence, as far as in putting my money in that particular country.”
The negative is that it costs the people that are manufacturing, it puts us at a disadvantage, as far as selling abroad. So there’s the rub back and forth either direction. What we do know is that the dollar is down. It’s not down massively, but we’re talking about a four or 5% drop, which in the currency world, that’s pretty significant. But again, time’s going to tell. It is a global economy.
Europe, again, by some people’s definition, has been basically ride the gravy train, as far as letting us spend all the money, what have you. But most people don’t understand the importance of the currency of the world, and the positives that come along with that.
And if we start screwing with that, and we start making bad decisions, where people start questioning, and there’s already been some discussion about it, what’s the next currency that the world is going to look to? And the Euro, at this point in time, isn’t in a position, as far as for that. The Chinese market is not in a position. Japanese market is not. So we’re really the only one today. But today could change pretty quick, as far as some of the decisions being made abroad.
You look at it, as far as Saudi Arabia, Russia, many of the large emerging markets are now trading outside the dollar, so they’re trading their own currencies. They don’t use the dollar. Historically, if you were to buy energy, oil, what have you, all of it was traded in dollars. So everybody used the dollar. So the currency that was our currency, gave us huge advantages, as far as because of that. Again, if there’s a question mark going forward, as far as on that, that could really rock the boat, and could affect each and every one of us, as far as in a very negative way.
Gary Determan:
How do you not go crazy? I mean, just listening to you, and I’m not that involved with it-
David Nelson:
Sure.
Gary Determan:
… as you definitely are. But how do you calm yourself?
David Nelson:
It’s not the easiest thing. Sleep is kind of a rare commodity, as far as, I go back to ’07, ’08, I would get up typically at three in the morning, turn on TV, and try to make decisions, as far as that point in time, what’s happening abroad.
For those that don’t remember, ’07, ’08, ’09, the market collapsed in a big, big way. It was down 58%. You had the NASDAQ down 82%. I mean, there’s a lot of stress that was happening, as far as during those periods. Good news, our clients didn’t drop even close to that. Good news is, again, we’re able to shield them from literally, probably, 80% of it. The bad news, we are still down 10%, 15% depending on the client.
So yeah, it’s a reality of the job. It’s part of the job. People look to us ,as far as to try to help them make good decisions. And again, from our perspective, we’re caught up at the same thing that a typical person is, and that is the 24-hour news. And all this stuff is flying out all the time, and it’s tough, as far as to sort through what matters, versus what doesn’t matter.
Hence, many of the tools that we use factor in very little of this yapping that’s taken place, as far as now. And it’s looking at stuff behind the scenes that matters. And hence, it led us to a decision to sell. And we sold at a pretty good time, as far as in hindsight.
Gary Determan:
Do you think that maybe there is just too much information out there for the average person?
David Nelson:
Way too much. Think back to when you and I were younger, as far as Walter Cronkite show up and tell you, as far as what happened during the day. Today, with the various media outlets, what have you, and people can get online, there’s a ton of stuff. And again, sorting through what matters, I tell people, I said, “90% of the stuff that you’re coming across really doesn’t matter.”
People used to come in with magazines, and the magazine would say, “Buy this,” some particular mutual fund, or a stock, or whatever. Then I would have to calmly say to them, “How many people are reading this publication? And how long did it take to make its way to Clinton, Iowa? To really be able to leverage this data, this information, you’ve got no inside info, as far as with this. Everything that they’re discussing in here has already taken place.”
So that’s the challenge, as far as it was a challenge then, and the speed of information moving now, it’s just unbelievable, as far as how fast this stuff gets out there. So markets today have adjusted, as far as to what they perceive to be what our president is going to come up with.
And we’ll see the market is going to be very volatile over the next several weeks. We think there’s a decent amount of downside yet. We, in some ways, selfishly hope there is, as far as, because we’re positioned, our clients are positioned in a very defensive position at this point in time.
Gary Determan:
Well, folks are going to be able to visit with you once again at the Vista Grande-
David Nelson:
Oh, yes, yes.
Gary Determan:
… for the Plus 50 Living Fair.
David Nelson:
Yes.
Gary Determan:
You and Clinton National Bank have been a part of every one of our Plus 50 Living Fairs, and I thank you for that.
David Nelson:
Yes, you betcha.
Gary Determan:
But you could get some interesting questions out there this year.
David Nelson:
There’ll be plenty. Exactly. There’s always uncertainty, as far as in the markets. And uncertainty, again, selfishly, is a really good thing. But this is at a different level. And again, that’s not a political statement, it’s just a reality, that nobody knows right now, as far as what’s going to unfold. And what unfolds today may be different a week from now.
And so, that’s the real challenge that people face. And we’ll do everything we can to try to, again, give people maybe a little bit better insight, as far as then what they currently have. And again, I always bring this up, as far as our job is to, as much as we can, ignore politics, it’s to try to help people grow their money. And subsequently, that isn’t a Democratic statement, that’s not a Republican statement. That’s basically a statement, as far as an investor, and what we’re interested in. So we’ll do what we can, as far as to help people out, out there. And yeah, it’s been a great partnership and we’re looking forward to it again.
Gary Determan:
And finally, before we let you go, and thank you so much for coming in, tax day is coming up.
David Nelson:
Yes.
Gary Determan:
So I would imagine the guys down there are getting ready to wrap things up.
David Nelson:
Yes. Yeah, they can’t wait. Every day I ask, “How you doing? Are you hanging in there?” So it’s been a long few months, as far as for everybody. But it’s part of the job. And you suck it up and we push through. So thanks, Gary.
Gary Determan:
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 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 NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.