Announcer:
It is 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 representative securities offered through Cambridge Investment Research. Inc. a broker-dealer. Member of FINRA SIPC, investment advisor representative Cambridge Investment Research Advisors, Inc. 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 we go to the bottom of the hour. Dave Nelson in studio with me just back from Albany, New York.
David Nelson:
Yeah, that was fantastic. For those that don’t know Iowa Women playing out there. So yeah, it was terrific.
Gary Determan:
So you started this last year.
David Nelson:
Yes.
Gary Determan:
Kind of jumping on the bandwagon. I don’t want to say that, but you are kind of doing that. And now you’re continuing and you’re going to go to the Final Four.
David Nelson:
Yeah, it’s fantastic. Last year we did the circuit as far as probably, I think we did eight regular season games and then Big 10 tournament. And then as the team progressed, we went to Seattle, then down to Dallas, and this year we’re heading out to Cleveland as far as for the next round. Really the limited time that I had to watch them in the past was really enjoyable. I used to take my basketball team out there back when there were seats available.
For those that don’t know, I coached high school basketball. And so the University of Iowa had a really nice deal years ago where you could bring your team out and they get in free. And the coaches get in free. And it was a nice deal because again, they want to put more people in the seats. So I’ve always enjoyed it, but when you coach a varsity basketball team as long as I did, I mean you just can’t get away. I mean, to get to a game is almost impossible because you either have practice or you have a game. And that’s literally Monday through Saturday is the way that we operated. Sunday you had off, but maybe they’d have a game on Sunday, maybe they wouldn’t. So you’re very limited.
And so now that I gave it up two years ago, we said, what have we wanted to do? And now we’re basically doing what we want to do and that is taking in a lot of games. So last year it was just kind of hodgepodge as far as trying to track down tickets and what have you. This year we were season ticket holders, and so we were lucky to be able to pick up several tickets. So we’re able to bring the kids, the grandkids, people from the office at various points in time, some clients. It’s been really, really fun.
And as I said, the shocker for me was when I’m chatting with the gal that cuts my hair, about two weeks ago I guess it was, and she says, what is it with this Caitlin Clark lady that I hear all this about? This is a person that has never participated in sports, could care less about sports that all of a sudden cares about sports and it’s because of one player. That’s Caitlin Clark. And so it’s just thrilling when you get to these locations and what have you, and you talk to people. Even those that are cheering for other teams just absolutely cannot believe what they witnessed as far as what he’s able to pull off. So it’s fun. You’ve been around the game long enough to realize that that type of player that Caitlin Clark is, they call her a generational type player. Even the other coaches have made comments like that.
And I hope that that isn’t true, that there’s some others following up behind her. But of basketball that I’ve seen as far as being able to do all the above, all that’s needed as far as in a game, I’ve never seen a player as far as being able to pull off what she’s been able to do. So we had a great time in Albany. Jumped in the car yesterday morning at about 4 A.M. and started the journey back. We drove out, stopped at Niagara Falls on the way out to kind of break it up.
All my traveling in the past has pretty much been in a bird. You get it in the plane and you don’t see anything. So we’ve said we want to do some of this stuff. But with the demands of the day to day as far as schedule at work and wanting to get some of these games, we just made the determination we’re going to drive out there. So we stepped into Vermont first thing. Back into New York, into Pennsylvania, into Indiana, Ohio, Indiana, Illinois and Iowa yesterday. It was a long day.
Gary Determan:
That was all yesterday?
David Nelson:
All yesterday. That’s the path to get back home from Albany, New York.
Gary Determan:
That is amazing.
David Nelson:
But it was well worth it. 15 hour drive, give or take. So life could be worse. Anyway, we’re very lucky to be able to do it.
Gary Determan:
Now Canisius is in Albany, right?
David Nelson:
Yeah.
Gary Determan:
Canisius College. Okay.
David Nelson:
Yes.
Gary Determan:
That’s where Shauna Geronzin now Shawna Green played. I know Dave and Ann used to take the drive there-
David Nelson:
Yes, exactly.
Gary Determan:
… all the time to watch her. And actually Shauna’s Illinois team is playing tonight in a championship of the WBIT. It’s a new tournament.
David Nelson:
Yes, exactly.
Gary Determan:
And they are going to be playing at the Hinkle-
David Nelson:
Hinkle, yes.
Gary Determan:
… Fieldhouse. And they’re going to be taking on Villanova. So let’s hope they do well also.
David Nelson:
Isn’t it great to see some local talent? I mean, my nephew out in South Dakota state and now as far as Shauna, as far as state Illinois, I’ve had a chance to chat with her last year when we went to the Big 10 tournament. They didn’t have assigned seats, so we got there early, stood in line for literally an hour and a half. They opened the gates and I’m off running, which you weren’t supposed to do, but I did. I apologize folks. But anyway, broke some rules there and I ran. We got to mid court. My wife and I sat there and watched every single game, literally at mid court.
Shauna walks in the gym, she looks over, spots me, gives me a nice little wave. And I walk around and I chat with her parents for quite some time. It was just great to see. I saw dad. I didn’t see mom at this last tournament, but dad was there with some of the grandkids and what have you. And I was able to spend some time with him. So here we have this Clinton High grad that goes off, has great success at college. Now is coaching as far as shortly after, got a head job and it was Toledo, wasn’t it? Does my memory serve me right?
Gary Determan:
She was at Dayton.
David Nelson:
So Dayton and then onto Illinois. So again, for those that don’t know, when you’re a Big 10 women’s coach these days, you’re making big money and it’s a big responsibility. And I’m just thrilled. Couldn’t be happier as far as for the success that she’s having. And I wasn’t aware of this. I am glad you pointed that out.
Gary Determan:
Yeah, it’s tournament.
David Nelson:
That’s the old NIT type, equivalent for guys?
Gary Determan:
I think the NIT is still going on, but I think this is a WBIT, think, I’m not exactly sure.
David Nelson:
Okay.
Gary Determan:
But now Brian Peterson, there is an opening at Drake.
David Nelson:
Oh, is there? Okay. I don’t know.
Gary Determan:
Yeah.
David Nelson:
That’s interesting. Wow.
Gary Determan:
Their coach, DeVries, he has gone on to West Virginia.
David Nelson:
Really? Okay.
Gary Determan:
How close do you think Brian is to getting-
David Nelson:
We’d love it.
Gary Determan:
… head coaching job at that level?
David Nelson:
We’d certainly love to see it. I mean, if you look at the folks that he’s around right now and where they came from and what have you, it’s a similar path. And he would like to get back in the area I know. And that obviously isn’t the area, but that’s about as close as you’re going to get probably to the area. And his wife is from the Cedar Rapids area, so that would be terrific. I don’t know if he’s put his name out there as far as hoping to get the job, but that would be really cool. I wasn’t aware of that.
Gary Determan:
It was great to see. Iowa State played South Dakota State in the NCAA tournament, so I got to see Brian there on the sidelines.
David Nelson:
Yes. A double-edged sword. For those that don’t know, again, my nephew, he played basketball at Iowa State. Now he’s coaching at South Dakota. He’s an assistant coach at South Dakota State. And they played the first round, it was, as far as in the tournament. My sister went out and watched. But she says, this is a tough one. You want to root for the place that he played as far as Iowa State, but my son’s coaching as far as at South Dakota. So South Dakota State. But anyway, they got it handed to them. Iowa State has had a nice ball club this year. They went fairly deep in the tournament and unfortunately they’re out these days.
Gary Determan:
Yeah. And their coach had a hand in getting Brian to Iowa State.
David Nelson:
Absolutely. They’re best friends to this day. They coach together and they’ve got a very nice common bond is what my sister was telling us. So yeah, I’d love to see him. And I am guessing he probably kind of like the keys to the head job too. We really haven’t discussed that specifically, but I think that’s probably everybody’s dream is not to be an assistant, but take the head job and see what you can do.
Gary Determan:
Well, folks, we are going to talk finance-
David Nelson:
At some point here.
Gary Determan:
… at some point. It’ll be coming up right after the weather brought to you by Air Control.
Announcer:
More winter-like weather with a whole lot of wind in your forecast for today. Don’t forget a winter weather advisory continues for our northernmost hometowns through this morning. A couple of slick spots on those roads. Snow showers continue through the afternoon with highs in the mid-thirties, winds up to 45 miles an hour. That continues tonight with a few flurries, we’ll drop to your freezing. With your Storm Track 8 forecast, I’m Meteorologist, Andrew Stutzke?
Gary Determan:
Well, the snow has not stopped. 34 degrees. And again, we do have those northwest winds now averaging up around 25 miles per hour. Our update brought to you by Air Control.
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Gary Determan:
Dave Nelson still in studio with us. So things right now, the market, I got my Nelson Corp market update.
Announcer:
Yeah, perfect.
Gary Determan:
Overbought?
David Nelson:
Yeah. Translation, what it means is that things have moved up pretty quickly and at a good pace. And so the fear and the danger always is that have we overdone it and gone up too fast and too high in this short period of time? The term is the market needs to digest some of the gains that we’ve seen. And so we may be waffling sideways for a period of time here. Our concern is, again, it always is the same, and that is people have worked hard for their money. How do you protect it? How do you grow it, but how do you protect it as well? And so when you’re in a hot market like now, I mean everybody’s looking at statements, they’re loving it as far as what they’re seeing there. But how are we going to hold onto this, because as everybody knows, markets don’t go straight up?
Oftentimes when you have big moves like this, you’re going to give some of that back before you reset and go higher. Well, nobody likes that reset. We always liked that last high that we had, and we want to keep it there. So the challenge for us is trying to recognize as far as when’s the time to start taking a few dollars out and putting it into something really, really safe. A money market account, something to that effect. And we haven’t yet. We’re eyeballing it, keeping a close eye on things. Obviously we can’t impact any 1, 2, 3, 4, 5% change. That we just have to live with. But something more significant, certainly we want to try to dodge and get out of the way as best we can.
Gary Determan:
I would think, and I don’t really know all that much about the markets, but as you say, it just can’t continually go up. You said reset. I mean it almost probably needs to do that, doesn’t it, Dave?
David Nelson:
It really does. And again, we as human beings are very emotional as far as relating to these type of things. And logic kind of disappears oftentimes as far as with people when you’re talking about their money because again, they worked hard for it and they don’t want to see it. Today I’ve got, let’s say a hundred thousand bucks and tomorrow I wake up and I’ve got 90. I mean, that doesn’t feel very good. And that would be a very small correction. The normal correction as far as in a bear market type environment, bear market meaning one that’s going down, is 38%. And that happens on average about every five to seven years. So we haven’t had a doozy in a while. Translation, usually you’re going to have a doozy at some point. And again, we want to take that doozy instead of that 38% average drop.
We want to keep that thing to five or 10% if at all possible. Problem is, again, you get to 5%, you don’t know if it’s going to go low or not. That’s our challenge and that’s where we spend as much money as we do buying research, trying to figure out is this a trigger, an event that basically is going to imply that things are going to go lower? Or are we just going to rally back? And we’ve rallied back. We’ve had some little mini corrections as far as over the last year or so. Maybe 3, 4, 5% has been a buying opportunity, but at some point it won’t be a buying opportunity. It’s going to need to be a sell at some point.
Gary Determan:
I always found it interesting, you talk about the research that you invest your money into. Talk a little bit about getting that research. How did you make that decision, this is what we’re going with?
David Nelson:
So for years, we basically bought into the idea that if we just hand these mutual fund companies our clients’ money over a period of time, they’ll again basically give back that money in a decent return. And again, it’s not to say that mutual funds are bad. It is to say that most mutual funds don’t outperform their index, whatever the index happens to be. So let’s say that’s the S & P 500. It’s a stock fund and it doesn’t outperform the S & P 500.
And so you can make all the excuses you want as far as why not. But the reality is it’s not just a one off that they haven’t outperformed. It’s basically been over an extended period of time. So understanding, again, what our clients are interested in. And that is they want us to grow their money, protect it against the big catastrophes. And again, then try to make our way back in to have that thing grow during the next cycle. And mutual funds don’t work that way. Mutual funds, basically, you hand the money to the team, the money manager team, and their job is to invest it .and they’re going to put it into, if they’re in stocks, they’re always going to be in stocks. If they’re in bonds, they’re always going to be in bonds.
And we feel that there’s going to be times that you want to be in stocks and there’s going to be times you don’t want to be in stocks. And so what we basically do is we tilt portfolios for clients as far as when people, typically their instincts are to sell. We’re going to be buying on their behalf and vice versa. So that’s really the key. Now, in order to pull that off, you don’t just listen to CNBC and say, this one talking head on there says the market’s going to go up or the market’s going to go down. We have to have something to back it up. And there’s very few independent companies out there that basically just sell data. And what we want is data.
And then we’re buying from these nerds and us nerds are going to now try to apply that as far as to a client situation. So every client’s a little different, but I would say the common denominator is everybody wants to make money and nobody wants to lose. Now we have to push them hard on that. What does that mean? How much volatility are they willing to endure in order to get a decent return? And we’ve been very spoiled since the bottom of the crises. In other words, 07, 08, 09 was the crises. If you don’t remember, it was a 58% drop, peak to trough during that period of time, for the S&P 500. And then the NASDAQ, which is a totally different index, that’s primarily technology type companies. That sucker dropped 82%.
So if you were lucky enough to get out of the way and be able to buy towards the bottom, you had a really good run. And the information that we had, basically, that’s pretty close to what we were able to do. Yes, we took a drop, but the drop was probably roughly a third of what the market actually dropped. And as far as the rally, we got most of the rally. So it’s a really good period of time. So that’s the highlight as we share with clients. The low light is probably a year when the market is really, really up. And it was up significantly in 2015, and we are up modestly. And so we really looked stupid that year, but we looked really, really good in the down years, historically. Again, there’s no assurance going forward, folks that this stuff is going to continue to work, but we look in the rear view mirror and we say, here’s what it’s done. Let’s do our homework. Let’s do the best we can.
And again, nobody can prevent somebody taking a plane and shoving it into a building in New York City again, and we wake up and the markets have been destroyed again. You can’t plan for that. But the other type of stuff, yes, you can. And the hard part of our job is the same as the hard part for the client, and that is taking emotions out of it. Because right now my emotions would say, let’s take our money and run, but yet there’s probably still some upside here. And our tools are saying, there should be some upside here. Let’s just sit patiently and wait.
And again, all of this stuff, folks, I don’t want to end up in jail. We’re talking very generically about this stuff and what I can get into and what I can’t get into. I need to basically chat in a very broad scope, not implying that the market’s going to go up, the market’s going to go down. But our tools are essentially leading us in these general directions, and that’s my hope and an objective as far as with this venue.
Gary Determan:
Again, visiting with Dave Nelson of Nelson Corp Wealth Management on Financial Focus. So we’re getting to that April 15th date, and I still see Mike’s car down there when I get to the station at about a quarter to five.
David Nelson:
Yes.
Gary Determan:
He’s already down there. Now will he continue to do that after the 15th?
David Nelson:
He will not. Well, I shouldn’t say he will not. For about a week, he will. After that, he will not. He’s like most people that I guess I’m around. I used to tell my basketball players this. Most people that are professionals, their workday’s done by noon. They get up early, they get started early, and that’s just the way it is. So he’s a four o’clock guy at the office this time of the year. Most of us are four to five o’clock type guys as far as I start from home, as far as workout and hit the books and what have you. The computer these days.
But yeah, it’s a very important period of time for people. And our business, a lot of the individuals that we work with, they have to wait for their documents as far as to come, as far as the disclosure type stuff, if they’re in these various investments. And the deadline is the end of January, but a lot of the stuff is the middle of March. And so yeah, it’s crunch time and they’re working really, really hard. We’re feeding them well. We’re keeping everybody there trying to encourage. It’s an important time and we make sure that we get everything done, I guess the bottom line.
Gary Determan:
But again, what a great advantage it is for Nelson Corp to have not just the bonds and the markets, but to have the tax and the other things that you have now incorporated into what you do.
David Nelson:
Yeah, I get the question from people often as far as essentially our operation’s very unique. And that is what you just brought up as far as having the ability to do their estate planning, have an attorney as far as that’s there that can do only estate planning type stuff. You get divorced, he’s not interested in that. Bottom line, it’s strictly estate planning.
As far as wealth management is concerned. We ask people, and we get probably now about three to four new people per week that are coming in the door that want to be clients. And one of the first questions that flies out of our mouth is, when’s the last time your financial advisor discussed your situation with your tax people? And you get this stare and they’re saying, essentially, it’s never happened. And I said, that’s true, because that’s the business model as far as the world that we live in. That doesn’t happen.
So again, for 20 plus years, that’s what we wanted. And it was just a matter of working out the details. Finding the right fit with the right individual as far as also acknowledging that there’s a lot of rules and regulations and laws that you have to abide by in order to have this marriage take place. It came together, and we’ve had it together for whatever it’s been, I’m going to say 10 to 15 years now. And with that marriage, clients are loving it because we can do a lot more proactive type stuff versus reactive stuff, which is the way that historically people operate. Here’s all my stuff. How much tax do I owe? Well, that’s a bad approach.
And when you think about it, every decision that the financial advisor makes with you pertaining to your situation, all of it at some point ends up in your tax return. So why would you not incorporate the accounting people as far as in that decision? It’s either today it’s going to impact your tax return or tomorrow. So let’s discuss that stuff today and make better informed decisions as far as on all the above.
Gary Determan:
Getting toward the end of the program, you brought up something interesting that to do this marriage, there were certain things that you had to do.
David Nelson:
It was tough. It was really much more difficult than what we anticipated. Again, we’re in the securities business, they’re in the accounting, basically very important to protect identity, what have you, all this really important stuff about incomes. And so if you look at the accounting world and you look at the investing world and bringing that together, yes, it was extremely difficult. Bringing in the legal as far as to have it in our location was much easier, and you would’ve thought that would’ve been much tougher.
So we’ve had that for a long, long time as far as an attorney coming into our office, meeting with our clients. But as far as the accounting side, that was much more difficult. But it’s much more important. The estate planning stuff for most people is a once every five to 10 year type decision. Accounting, and the investments is every day. And it’s really important, again, to have that. And so clients absolutely dig it. The challenge for us is having enough personnel as far as to accommodate and be able to pull off the promises we made.
Just real briefly here, I know we’re almost out of time. The Medicare was the last piece that we brought in, and that piece, we’re just getting all kinds of great feedback. Because what people don’t know is that too should be incorporated with your investment decisions because the higher your taxable income, the higher your Medicare premium is going to be. People don’t know that. They think it’s one premium. So anyway, don’t find out the hard way as far as that, again, seek out somebody that can do the tax planning with you and incorporate that as far as with your Medicare supplement type decisions.
Gary Determan:
And with all that being said, you are going to be at our Plus 50 Living fair on Tuesday, April 23rd, back in the spring for the first time since 2019.
David Nelson:
Oh, really? Wow. Excellent, yes.
Gary Determan:
So I think it’s going to be great to be in the spring.
David Nelson:
Good.
Gary Determan:
Nelson Corp. and Clinton National Bank have been a part of every one of our Plus 50 Living fairs.
David Nelson:
Yes.
Gary Determan:
So looking forward to having you out there.
David Nelson:
We’ll be there. Looking forward to it as well.
Gary Determan:
All right. Well have a safe trip to Cleveland.
David Nelson:
Yep, sounds great.
Gary Determan:
And go Hawks.
David Nelson:
Go Hawks. Thanks, Gary.
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.