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:
Well, we are going to go live today until the bottom of the hour. By phone, we’re visiting with Dave Nelson. Morning, Dave.
David Nelson:
Good morning, Gary. How are you doing today?
Gary Determan:
Not too bad. You get your walk in before the rain?
David Nelson:
Yes, absolutely.
Gary Determan:
Good.
David Nelson:
Got to get the exercise in. Yes, the weather forecast was pretty much spot-on, so you get out early. I’m sure you did as well.
Gary Determan:
Well, I work early.
David Nelson:
Oh.
Gary Determan:
I have to walk in the rain.
David Nelson:
Okay, all right.
Gary Determan:
I’m not going walking at 4:00 in the morning.
David Nelson:
Okay, gotcha, gotcha.
Gary Determan:
There you go.
David Nelson:
No, temperature is nice and a little rain coming down. I don’t know, I guess at some point here we probably got enough. But yeah, it’s a gentle rain, so not too bad.
Gary Determan:
Yeah, that oppressive heat has passed.
David Nelson:
Yes.
Gary Determan:
And actually, we’ve got our golf tournament on Friday. You’re one of our sponsors for the United Way. I think Nate’s going to be doing the golfing for you. Friday is going to be absolutely beautiful.
David Nelson:
Excellent, excellent. Glad to hear it. I’m going to be on the road for a few days, as far as meeting some clients. I think we already know this and probably many of the people that are listening this morning, we’ve got clients pretty much all over the country, I think 40-plus states. Periodically, we have to get in the car or get in the plane, and travel and see them, and walk through some stuff. Nothing beats face-to-face. Anyway, we will be on the road, several of us and unfortunately can’t make it. Certainly, a good cause, and I’m glad Nate’s going to be there and doing our part.
Gary Determan:
You bring that up and I’d like to expand upon that. You do get the opportunity to visit these folks. How important is it to be face-to-face with these people, no matter where they happen to be living?
David Nelson:
I’m kind of old school mentality. People talk about, as far as some of the new technology where you can pull it up, and periodically we’ll do that as far as there’s various programs and what have you, and you can see the person there. But face-to-face is really good. It allows us to be able to do a better job I think reading the environment. Is their health good? Sometimes as far as if all you see is the face, you don’t see them hobbling around, whatever. They’re just trying to be positive and not share all their woes, and whatever. Again, for us, it’s important as far as to have a good feel, as far as mentally how people are doing, financially how they’re doing. Again, it’s tough to pull that off as far as over the phone. It’s tough to pull that off as far as in one of the phone calls where you can see the face.
Yeah, it’s tough because, again, we’ve got, give or take, 1700 clients that we work with as far as on the wealth management side. As far as the accounting side, it’s roughly I think 1800. Again, you want to get with everybody that you possibly can and have that close relationship. It’s key.
Yes. I just got back, I was out on the East Coast meeting with some clients out there. Maine is where we ended. We spent an extra day there as far as just checking that state out. Boy, is that beautiful. That was my first time out there. This trip will be up north from here, Wisconsin, Minnesota. Again, be gone for a few days, so not too long. Looking forward to it, as far as seeing some of these folks.
Gary Determan:
That is a staggering number of people that you work for. That is amazing. How did that number get so big, Dave?
David Nelson:
Yeah, it has. Fortunately, we’ve got some very quality people that are supporting it. You brought up Nate earlier. Nate, I think he’s working with give or take probably 300 people. John, James, I would say probably are 400 people each. I’m working these days with probably, I’m going to say 150 is probably a realistic number. We’ve got Amy Cavanaugh, as far as in the office working with people. Travis Morehead, Mike Steigerwald. It’s a really good team. Some are more qualified than others.
Again, primarily what I’m working with are individuals with a little bit more, and most people would think more assets, but it isn’t more assets, it’s more complexity. We’ve got somebody coming in here, as far as this coming week I believe it is, in the midst of selling a farm and they don’t think that they’re getting the help and whatever. We don’t currently work with them, but that’s the type of stuff. Val will get with me and say, “Who should be meeting with these folks when they come in,” and then we make a determination. She does a really nice job as far as sorting through where are they, what are they trying to accomplish.
I think it’s obviously probably too, from my prior discussions here, is that I’d say probably easily 90% of our clients are probably 55-and-up. That’s our sweet spot as far as helping people, whether it be the wealth management side, whether it be taxes, estate planning. Most of the people we talk to as far as day one, the estate planning is something that they’ve been meaning to get to. It’s almost amazing as far as the wording that people … “Yeah, we did this when the kids were younger and we haven’t updated it. I know we need to, but we just haven’t gotten around to it,” blah, blah, blah. We’re going to be the jerks that prod them and push them to get that stuff done.
In the old days, I used to bring up the importance of estate planning. From the standing of the client, it’s more of the living documents than it is the death documents. In other words, like the power of attorney for healthcare, the power of attorney for property, those are crucial and a lot of people don’t have those type of documents. They occasionally come up, “Well, what are you doing as far as personally?” I would say I travel a lot, and because of the travel, whatever, I’m in planes on a pretty regular basis, so it could go down so I need that stuff. We got to have a good backup plan.
That story has changed dramatically in the last three, four years from my journey as far as out spending as much time as I did in Iowa City at the University of Iowa Hospital, being there, being a patient there, and being totally out of it and not supposed to be here today. The storyline is different now and that is it’s a very real thing. I don’t drink, I don’t smoke, I work out every single day, I eat good food, and yet I spent three weeks, give or take, as far as in Davenport, them trying to figure out. Then out in Iowa City, them trying to figure it out. Then sat in a chair for months, as far as watching stuff fly through the air that really wasn’t there, but my brain was telling me that it was there.
With all of that, I can now look somebody in the eye and say, “You never know.” I did everything right supposedly, but stuff happens. It’s happened to me, it’s happened to a lot of other people. Again, now if something like that were to happen, as far as I’m talking to a client, “Do you have your ducks in a row for your spouse, for the kids,” whatever, whatever. None of this stuff is fun to talk about. As far as estate planning, it’s a difficult conversation. But again, ignoring it doesn’t solve the problem. Again, being proactive and putting stuff together can make things so much easier as far as if something were to happen to you, either through death and/or through my situation, a pretty severe disability.
Anyway, it’s just crucial to get done. Again, that type of stuff is really tough as far as to do over the phone. Again, you bring in the law firm as far as to do the documents. It’s nice to be able to meet some of these people if it’s not somebody that we’re currently working with as far as a law firm. Again, keep putting all the pieces together. It takes time, and again, face-to-face is really, really tough to beat as far as with these type of decisions.
Gary Determan:
How long ago was that health issue for you, Dave? You’re right, it does give you a really different perspective when you talk to these folks.
David Nelson:
Yeah, it goes back during mid-COVID, when COVID was just rampant as far as around here. Again, I guess this is the good news as far as operation, and that was a lot of people never even knew that I was out and that’s because of good people around me that basically take care of stuff. With pretty much every client that we work with, we have two people assigned to that so if somebody’s gone from the standpoint of on a trip, or again, a health issue or something like that, it should be a very seamless transition and that took place there.
The ones that knew about it basically stemmed from my coaching. It ended up in the newspaper that “Coach Nelson missed another game due to illness.” Then that triggered a fair amount of phone calls as far as locally. But people outside of the area, literally they didn’t know until I told them months later. That was because we were Johnny-on-the-spot, we’ve got the people that are taking care of things day-to-day but at the end of the day, everything’s getting taking care of. It’s a really good thing that we had staffed up massively prior to that, probably about three, four years prior to that. That’s the rough timeline when my sons were now aboard with us, and son-in-law was aboard with us, as well as other people as far as on the on tax side.
But yeah, it was in the heart of COVID. Most people, Gary, thought it was COVID that I was probably down and out with. As I’ve told people many times since, I said, “I wish it was COVID.” That would have been a little easier as far as to overcome. This was months. Basically, Val summarized it and said it was about 18 months, as far as from the start to the finish. Yeah, it wasn’t a very pleasant time to say the least.
Gary Determan:
Well, it’s great to have you back, no doubt about that.
David Nelson:
Yeah.
Gary Determan:
Hey, we’re going to be taking a break for the weather. We’re going to of course go to the bottom of the hour and we are live with Dave Nelson. What are we going to cover in the second-half of the program, Dave?
David Nelson:
I think the important stuff these days is tariffs. Again, we’ve talked about it, we’ve talked about interest rates. I’ll drill down a little bit more. I guess I’ll cut to the chase is that people should not be making any rash decisions and I can drill down a little bit more on that, and what we expect as far as going forward.
Gary Determan:
All right, very good. Let’s break for the weather, brought to you by Addington Place.
Andrew Stutzke:
The oppressive heat may be gone, but showers and storms are not. We’ll see several rounds of those today, with some gusty winds and also some heavy rainfall possible. That will limit highs today to the mid-70s. Early shower storm possible this evening, otherwise partly cloudy. Overnight lows in the low-60s. With your Storm Track 8 Weather Impact forecast, I’m Meteorologist Andrew Stutzke.
Gary Determan:
Stating rain at this time, temperatures dropped down to 67-degrees. We do have north winds, 10 to 15. Once again, with rain, our update brought to you by Addington Place.
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Financial Focus presented by NelsonCorp Wealth Management, we are visiting with Dave Nelson going to the bottom of the hour. Well, you mentioned tariffs and they certainly have been in the news for some time now.
David Nelson:
They have been, Gary. I’ll just detour for 10 seconds. I sure hope that weather forecast is right. We’ve got about 500 people coming down to the ballpark tonight.
Gary Determan:
Oh, that’s right.
David Nelson:
To take in a ball game, the LumberKings. I hope this rain disappears and at least by give or take 4 or 5:00 tonight.
Gary Determan:
Yeah.
David Nelson:
Anyway, to get back to your question. Tariffs have been front-and-center for a while now. Again, I try to stay out of the politics part of this. My job isn’t to tell people who they should like or not like, my job is to try to take what that individual and that group, whether it be the Senate, the House, what have you, and make good financial decisions. I think I shared with you before that when some of this stuff was starting to come to the forefront months ago, we had basically made a decision to sell pretty much everything, which was December 29th at the end of last year. Then we turned around and bought back in after there was a lot of blood in the streets, and maybe people remember that.
We sold the 29th of December. The market kept going up for about two weeks and we looked like complete morons for a period of time there, and then the market rolled over. We wanted to get out, we figured early, and certainly we were. Anyway, we bought back in.
Well, again, what’s that have to do with the tariffs? It had a lot to do with the tariffs, and that was how is this going to be viewed by the investing public, whether it be in the US or abroad. The investing public basically wasn’t too keen as far as on a lot of this stuff and the market sold off in a big, big way towards the early part of the year. Again, we used that as an opportunity as far as to buy.
We’ve also spent a lot of time talking to people about interest rates. I had a client in yesterday, we’ve had a really good year. We’re really ultra-conservative with his mix of investments, what have you. He got into what he had anticipated and I said, “Well, all I know is our current president really wants interest rates down and he’s been very vocal as far as about that, hoping that again, interest rates can drop and drop dramatically.” I don’t know if that’s going to happen, but I do know one thing. If it does happen, the dividends flow that people are experiencing today from some bonds and whatever that are maybe short maturity bonds, they’re going to get a little bit of a wake up call if interest rates were to drop and drop a decent amount.
The alternative to that is that if interest rates go down, the actual value of your bond goes up. Again, don’t have time to explain all the details on that. But I explain it to people, you think of bonds, you think of a teeter-totter. When rates go up, the value of your bond goes down, and vice versa. There could be some good news if rates go down. It won’t be good news if I’m a short term investor and I like CDs, and things of that nature. It won’t be good news. That’s something that we’re really, really watching.
Inflation is probably I guess front-and-center as far as are rates going to go down. With inflation like it is right now, most people believe that inflation is somewhat under control now, that the Fed has the ability and certainly the opportunity as far as to lower interest rates. Now, the big money is betting because the announcement comes here within a few hours where they’re going to announce whether rates are going to go up or down, or stay the same. The Wall Street crew that’s supposedly the smart money is betting today that there will be no change, that the interest rates are going to stay the same. Again, depending on what type of investments you go into or that you’re currently in will dictate whether that’s good news for you or bad news for you.
We think the market has factored in a whole bunch of this. When you look at returns year-to-date, stocks are up. Depending on what index you look at, whether it be the Dow, whether it be the S&P 500, whether it be the NADAQ, are somewhere in the neighborhood of five to eight percent as we speak. Already a pretty good year. Most people with those type of returns would be happy if this was December 31st, but it’s not. We’re in the end of July, early stages of August. Can we hold onto that return as far as the balance of the year? Time will tell. But a lot of it’s going to be dependent upon interest rates and what takes place as far as the interest rates, and what comes out of the Fed on this meeting, and then the next meeting is in September.
Gary Determan:
Having hosted this program with you for a number of years and we talk to you live once a month, the thing that gets me is the variables. It seems like there are so many different things that come into play. How do you keep that all straight?
David Nelson:
It’s really difficult. Technology has helped and hurt, as far as that regard. The speed of technology and the decision making of technology, it’s instantaneous as far as when data comes out, as far as how it’s now played out. Jake in the office has been the architect, as far as of our tools that we use. We basically spend hundreds of thousands of dollars buying research out there, and then we have big payroll as far as individuals that are working for us directly, and trying to think that information, put it together, and then apply it to each client’s individual situation.
I brought up the client yesterday that was in, lives up in Mount Carroll. Long story short, very conservative-type individual, not interested in much volatility. Again, that’s unusual. The bulk of people that we work with probably are able to absorb a little bit more volatility. So subsequently, again, in a period of time like we’ve had, it’s been pretty good. It’s worked in their favor as far as the investments have gone up, as far as primarily the stock-type investments.
Keeping up with this, it’s finding a way to merge a lot of that stuff into a decision making mechanism, and that’s been Jake’s issue, a gentleman that we have in Kansas issue that’s an employee of ours. As well as the two sources, we buy data from an organization up in Canada, as well as an organization, these are independent basically nerds like us, that they package the data and then they sell it to people like us. Florida, Canada, Kansas, Clinton, Iowa, put it together. Again, year-to-date, it’s been absolutely terrific. We’re beating the market by a pretty good margin.
Generally, I’ve got to be careful on how I word this, we’re beating it with a lot less risk. That’s the most exciting part of it. Again, beating the market is one thing, but if you have to swing for the fence and you got your neck out there exposed and whatever, that’s not what we’re interested in, our clients are interested in. What we’re interested in is trying to get a reasonable rate of return with as little risk as we possibly can take. This year has served that up for us. There’s been a couple areas that are more non-traditional, some indexes that basically more people probably aren’t investing in, and it’s worked as far as year-to-date.
Again, we’re keeping a close eye on it. Any time we have a good year like this, clients are celebrating, they’re thrilled. It sounds bad to say it, but when people are really thrilled is typically when we’re really nervous because the masses, the bulk of the people, if everybody’s excited, typically that means bad news ahead as far as toward certain things. In our world, that’s investments. And vice versa, when everybody’s running for the hills, and paranoid, and panicky, that’s the good time as far as to buy. That’s basically what took place the early part of this year, we were able to buy back in when there was a lot of panic in the streets. Subsequently, we bought at a good price and today we look like we have a clue as far as what we’re doing.
Gary Determan:
You have a clue, there’s no doubt about that. We’ve been hanging out with Dave Nelson live, we’ve got about four minutes left in the program. We started by talking about the importance of face-to-face. What about the face-to-face with you folks in the office? You mentioned Nate, and Amy, your sons. You guys have to get together face-to-face, I would think maybe once, twice a week?
David Nelson:
We do, we do. Friday morning is a don’t miss it type thing, everybody better be there, because again, we recap a whole bunch of stuff. We recap as far as what portfolios are doing, what is happening as far as out there. Each person brings something to the table as far as depending on their particular area that they focus on. Again, it amounts to about an hour, that’s the extent of it, but in that hour there’s a lot of stuff that’s discussed. Again, trying to make sure that we’re all moving pretty much in sync and we’ve got the latest and the greatest data out there, again, to help make some of these decisions.
Again, time will tell. I guess I’d wrap it up, Gary, and say I don’t think if I’m sitting with a whole bunch of money on the sidelines that I would be rushing in today. But if I’m invested today, I don’t think I would be running for the hills selling at this point in time. We’re in an interesting spot. My wife brought up the other day if these tariffs, if some of these get kicked in, are you guys going to be selling again? Strange for her to bring stuff like that up because she doesn’t really pay that close attention to this stuff, but she watches the news I think like other people. My response was, “No, the market’s already factored that stuff in, as far as in a pretty significant way.” We’re not overly paranoid about that.
What we are concerned with any time you have a whole bunch of people moving to one side of the boat, and that seems to be the case right now, that things can get kind of ugly as far as that environment. But I think it’s a little early yet. Again, our crystal ball isn’t perfect. I think people that have had good returns, I wouldn’t be hitting the panic button. If I am not in currently, I wouldn’t be hitting the panic button about getting in. Do everything gradually and use your common sense to make some of these decisions.
Gary Determan:
As always, we appreciate your time. Hopefully, the rain will subside and you get your ball game in tonight. That’d be great.
David Nelson:
I hope so, too.
Gary Determan:
At NelsonCorp Field.
David Nelson:
Yes, yes. Yeah. Sounds great, Gary. Thank you.
Gary Determan:
Thank you.
Announcer:
Financial Focus is a production of NelsonCorp 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 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 NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information visit our website at www.nelsoncorp.com.