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 indices mentally. 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. Now, here’s today’s financial focus program.
Gary Determan:
Always a pleasure to have Dave Nelson in studio. Here he is on July 8th. The first Wednesday of the month when it’s the first always makes it a little tough.
David Nelson:
It does make it tough. And again, timing wise, as far as just trying to get together and your schedule, my schedule, what have you. And anyway, so it’s great to be in here. Got back. We spent a couple days as far as had the whole crew together. We went up to Minnesota, spent some time as far as up there and busy, busy, busy place with 13 grandchildren and then spouses and all the kids, whatever. It was just a really good time.
Gary Determan:
You’re up to 13 grandchildren now?
David Nelson:
13 grandchildren.
Gary Determan:
Oh, my goodness grace. What are the age ranges, Dave?
David Nelson:
So the oldest will be going, he’ll be a junior this year.
Gary Determan:
Oh, okay.
David Nelson:
And then the youngest just turned a year. So anyway, yeah.
Gary Determan:
So what’s it like when they all get together? That’s got to be fun because I can’t imagine it happens that often.
David Nelson:
It doesn’t happen very often and we look so forward to it as far as Christmas we’ll get together for an afternoon, something like that and maybe a few other dates. But it’s tough because many of them are at ages where they’re in sports. And so, today the world that exists as far as sports is so much travel stuff that takes place and subsequently that makes it difficult. But it’s pretty rare. We had literally everybody together. I think the goal was a full week, but one daughter, my oldest daughter, her mission is I think to pretty much take care of every animal on the planet and cats in particular. So she brought up five little kittens that somebody dumped at her house. So she brought them up and she’s literally feeding them with a little tube, whatever, to try to keep these little babies alive. And it’s just really sad as far as what people do.
And so, she just can’t sit on the sidelines and watch that so people know that. So they dump animals on her constantly. So to get away to have somebody back here take care of them on her behalf is really tough to do. So she was only there literally like three days and most of the other people were there as far as four, six, seven days. So it was a great time. We had photos of the family. We hired a person up there as far as to take some family photos. And so, it was special. My favorite week of the year without question.
Gary Determan:
You mentioned briefly before we went on air that you just realized it was maybe an epiphany, how you can relax by just dropping a line into the water.
David Nelson:
I have a longtime friend client as far as from the area here. He also on the side had a little resort as far as up in Minnesota and he leaned on me year after year to come up and come up fishing, relax a little bit, whatever, whatever. And anyway, put it off. Too busy I can’t do this blah, dah, dah. Well, one year I finally said, “Yeah, let’s just do it. Maybe he’ll get off my back as far as this and we could be a one and done.” But I grabbed the poles. We went down, jumped in this old crusty old boat that he gave us and the poles that he gave us. Everything was just old and borderline junky. But as soon as I dropped that line in the water, it was life changing stuff. And I said probably to this day. So we’re a little resort, little cabin, nothing special about it whatsoever, but probably to this day my favorite vacation because it was life changing stuff. I’m kind of wired if people can’t tell.
Gary Determan:
You need this kind of relaxation, no doubt, because what you do on a day-to-day basis, I mean, so many things are thrown at you.
David Nelson:
I had a client yesterday that she was really kind and been a long time client and she’s had a lot of issues as far as in recent times, family members passing away, what have you. And it’s been tough. And so, we were chatting about that and she got to a point and she said, “Nevermind me.” She says, “I just can’t imagine your job the last couple years as far as what you guys have gone through.” And I said, “It’s been tough to say the least. And after the break here, we can get into kind of talking a little bit about markets and what have you as far as what’s taken place, what might take place, what have you.” But she’s right. It’s decision times have been very, very difficult. Fortunately, we don’t use our… I talk to clients all the time about these expensive tools that we use and spend all this money to buy this research, what have you, then try to apply that stuff.
And I said, “All of us are troubled with the way that we’re wired is that a lot of decisions are made by our gut, not by our brain.” And I said, “In the world that we live in, it’s really easy to let that gut come into play and it could be a good decision, but more often than not, it’s going to be a bad decision.” And I said, “If I would’ve listened to my gut the last, say, three, four years, we’d be sitting in cash and we would’ve made virtually nothing. Instead, we’ve had really three, four really, really good years for our investors as far as that work with us.”
So it’s tough. But her point was that again, it’s got to be just brutal. And I said, “I wouldn’t use the term brutal, but I would say that it’s been very, very difficult as far as to stay the course and to stay calm in a period of time when we’ve got as much going on around the globe.” I use the term oftentimes chaos that’s going on around the globe. And so, fortunately we didn’t have David’s gut make the decisions. We had the expensive tools making the bulk of the decision and subsequently clients are financially in much better shape today than they would’ve been otherwise.
Gary Determan:
Again, visiting with Dave Nelson of NelsonCorp Wealth Management, you’ve been doing this for some time. You talked about the last couple of years. I mean, does it seem like every year things get a little more chaotic or a little more hectic for you, especially with the progress in technology?
David Nelson:
It is. And you look at the AI as far as the quick decisions that are being made. I mean, just instantaneous decisions can, again, move things in a good direction or it could move things in a bad direction. And so, there’s no question as far as the importance of people using a little common sense and hoping that other people do the same because this AI can really… I mean, you just listen to some of the experts out there as far as what could potentially take place as far as with this. And this could be really, really earth-shattering type stuff. I mean, I look at, and I can’t talk specifically about anything like I repeat on here all the time. I don’t look very good in stripes being in jail. So I got to be careful. But cryptocurrencies as a whole, again, people bring it up, they’ll ask, “What do you think?”
And I’ll just tell them as bluntly as I can that I don’t think anybody understands it. And I sure don’t. And I’ve got a lot of education as far as background, as far as relating to money. And I don’t get it. And I don’t think I’ll ever get it. And so, we’ll see if this stuff exists. You’ve got the proponents of it as far as believe that this is earth-shattering type stuff. It’s going to change the world. And then, you got other people that see it as a big, big hoax. And I can’t figure out how you can put a price as far as on this. And in particular, some of the prices at these so – called tokens that people pay for it. And so, we had this hysteria of some of the same concept as far as the metaverse and whatever relating to famous paintings and what have you. And this stuff was selling for a gazillion dollars as far as going back probably five years ago.
Today doesn’t exist, folks. It’s totally gone. And so, how many people got shook down by this? How many people have been shook down with a cryptocurrency? Early on, the bulk of the trading was taking place abroad, primarily in North Korea. And yet people fell in love with this. And then again, we hate it. And then, we’re falling in love with it again. Common sense is really, really important as far as relating to your money. And so, Warren Buffet had a great quote that again, I’ll just summarize it, but if I don’t understand it, I don’t invest in it. And I think again, most people should follow that rule of thumb relating to their finances because we don’t have a lot of people that have an extra million or two sitting around that if they lost it’s no big deal.
Most people, the money that they have is important. Subsequently, they need to use common sense and my opinion, work with individuals that have been around the block more than once and can help them make some of these tough decisions and non-emotional decisions, which is again, as I brought up earlier, very difficult to do.
Gary Determan:
Just real quick before we take a break for the weather, good advice there from Warren Buffet. What’s he doing nowadays? I know he stepped aside somewhat, but-
David Nelson:
So he still comes in the office, what he has admitted to, but not as on a regular basis as he used to. And on top of that, he’s not managing a company type money. He’s managing his own monies. So the guy’s wired too. So he’s not going to slow down. So long as he has this Dairy Queen, which he owns as far as the company owns and Coca-Cola, which he invests a boatload of money in. He’s a happy guy. It’s a pretty simple man. You see the house that he lives in. He’s lived there for 50, 75 years, something like that. I mean, what an inspiration. I mean, what a great individual this person is.
Gary Determan:
So you can have a Coca-Cola float, Coke and put a dip of Dairy Queen ice cream into it.
David Nelson:
Exactly. Black cow or whatever they refer to those as, yes.
Gary Determan:
So the Oracle of Omaha, right?
David Nelson:
Yes, exactly.
Gary Determan:
We have to come up with a nickname for you.
David Nelson:
Yeah. That’s what I need. Yes.
Gary Determan:
Let’s take a break for the weather brought to you by Frary Lumber.
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A little more heat and a little more humidity, what we’ll be tracking for your Wednesday. Mostly sunny skies continue and temperatures reaching up to near 90 this afternoon. With the added humidity, it’ll feel more like the mid 90s. For tonight, increasing clouds, stray shower and thunderstorm warmer. Overnight lows near 70. With your Storm Track 8 weather impact forecast, I’m meteorologist Andrew Stutzke.
Gary Determan:
Right now, sunshine, 80 degrees. Our update brought to you by Frary Lumber.
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Gary Determan:
We are going to the bottom of the hour with Dave Nelson of NelsonCorp Wealth Management on financial focus. So let’s get into the markets.
David Nelson:
Man, again, the last couple days just getting crazy. We’ve got a few events. I stopped over and was speaking to my mother this morning, just drop by, say hi, whatever, bring a couple items. And I said, “You’ve been watching the news?” Well, you can see some of it as far as that’s taking place. And you see what’s happening in New York City as far as the building that could potentially make its way down. And so there’s just a lot of… And she just shakes her head whenever. She’s turning 90 here in a matter of four or five days.
But anyway, there’s a lot happening and things were calming down. We started seeing energy prices dropping. A barrel went from 100 plus. We’re now back in the high 60s. Things look like they’re coming together. And then, Iran decides that they’re going to pluck a couple of big boats as far as over in their neck of the woods. And so, now we’re underway again as far as bombing and what have you. And so again, oil prices up, stock price is down. Are we going to go back to where we were as far as in March, late March, April, as far as with prices of energy or a barrel of oil going over $100? We’ll have to wait and see. But my take is right now, I’m not panicking on it. Hopefully, there’s enough individuals that can talk this thing through. But when you have a country over there that is bound and determined to worry about their own livelihood, the people in charge don’t care about the 90 million other individuals. It makes it a very precarious type situation. And so, I don’t know. We’ll see as far as the impact.
Oil is definitely the trending now up. That’s probably going to continue at least for a while. Generally speaking, stock prices are moving down. We came off the lows early this morning when we’re looking as far as what’s happening abroad, as far as Europe and China, et cetera. Things were selling off pretty hard. By the time the market opened here, things had calmed down a little bit, but you got some big, big companies, some in our backyard that have really run up big time as far as the price of the shares that had been thumped the last two, three days. So some of the people that work for a company that makes a lot of farm equipment are having a rough couple days here as far as in the Quad City area. Well, all over the place. It’s a big, big company.
So anyway, but again, general rule of thumb is never let something like this make your decision for you immediately in a panic type situation. We’ll keep an eye on our tools as far as what they’re telling us as far as we’re going to have a wind in our face or is the wind at our back going to continue? At some point here after this massive run up that we’ve had, there’s going to be a wind in our face. And again, people are going to have to play a little defense or they’re going to watch some of their money disappear.
Gary Determan:
Again, visiting with Dave Nelson, listening to you talk there, and I know you’re the type of person who likes to be in control, like to be on top of the situation. You’ve got the tools you say to help get you in that direction. But how much does it bother you that you really maybe don’t have control?
David Nelson:
You don’t. Markets are going to do what they’re going to do. The control that we have is limited, but again, it allows us to shelter as far as best we can as far as clients’ monies. So in other words, I mean, the control we have is we sell and we sit on the sidelines. We’re in an industry that’s obsessed with this term and I know I’ve chatted about this probably through the years, hundreds of times as far as on this program, that being that you just put your money in, you fall asleep and over time you’ll be fine. And again, I love pushing back as far as on that, but that’s not always the case. And people talk about it’s temporary, the market will go up. And I said, “Where do you see that?” I don’t see that in writing anywhere. That may or may not happen.
So there’s a company that used to get back to, again, playing this silly game, but they were over in Morrison. They closed down years ago. That was one of their locations. It’s this massive, massive company. And that massive, massive company was a $64 stock in the year 2000, give or take. I think it was 63 and change. Okay, so 64 bucks. Fast-forward from the year 2000 to 2009, so give or take 10 years later. So now keep in mind ’07, ’08, ’09, we had the pullback in the market, very substantial pullback of this crisis. So this $64 stock in the year 2000, now in 2009, March of 2009 to be exact, is under six bucks. $64 to under six bucks.
Now there’s been some reverse splits. The company’s busted up, it’s done this, it’s done that. But when it’s all said and done, that’s roughly a $40 stock today. That was $64 back in the year 2000. So that’s one example that I bring up to people. The other is this tiny little country of Japan that was the second-largest economy in the world for years that if you took a snapshot in 1989, the stock market there, the Nikkei index peaked. And it was at roughly 38,000 and change. So again, let’s round it off to 40,000 for easy math. That that stock in 1989 was 40,000. That if we took a snapshot, give or take about three years ago, it was still under 40,000. We’re talking about basically 30 years later that it’s still underwater from where it was in 1989.
Now, it’s increased the last couple of years pretty dramatically. But when people say that it always goes up, maybe that’s true over a 50 or 100-year period of time. But the people that we work with are interested in a year from now and two years from now and five years from now as far as where they’re going to be. So this idea of just shove it in there and trust all these other people that they’re going to do the right thing and they’re going to make all these adjustments and whatever on your behalf and you’re going to be okay, we don’t buy it.
And so, the bottom line is we basically took the lead back about 20 some years ago to say there’s times we want to be invested and there’s times that we don’t want much exposure as far as to stocks. And so, our goal and our objective with clients is to try to mute as best we can these 30 and 40 and 50% drops that do happen folks. People I think forget that those magnitude of those drops do happen. Just go back to 2000 through 2002. It’s about a 48% drop there for the S&P. Fast-forward to 2007 through 2009, it was give or take 58. The NASDAQ dropped 82% during that same period of time. So when people act like, well, just a little drop here and there. Well, think again, some of these drops are really, really significant and can alter one’s retirement lifestyle or when they retire, be able to retire that they have to work extra years.
So again, it’s a big responsibility. We don’t know the day, we don’t know the month, but if we can get the quarter right, we can get even the mid-year right, we can help people protect their capital while at the same time growing it when things are working. Again, markets go up more than they go down. I get that, but there’s periods of time that it’s better to be sitting quietly on the sidelines with very little exposure to the market.
Gary Determan:
We are a society it seems like instant gratification. I mean, things got to happen to us or for us instantly. So with your direction that you’re talking here, how hard is it sometime to convince these people we know what we’re doing?
David Nelson:
Yeah, it is. And again, in good times like now, we’re prepping people constantly. I use the term beating them up as far as we’ve had this big run and things are going to change here at some point. Don’t know when exactly, but at some point. So we need to again, recognize that this run has taken place. And history says that stocks pay 6, 8% over long periods of time. Today, what people are experiencing the last several years is double-digit returns for probably a three, four-year period of time. That’s not going to continue. So again, trying to get people to recognize that in advance so that when it does happen, that people don’t panic.
And our goal is to try to take a 50% drop and keep it much less, maybe a 10, 15% drop. But even 10 to 15% is a big number as far as for most people because most people, again, don’t have that extra million or two sitting around that they’ve got nothing else to do with it. So what they have, they need and subsequently, again, we got to do our job in this as well as we can, trying to capture as much of the upside as we can while minimizing that downside.
Gary Determan:
Getting toward the end of the baseball season down there at that ballpark that you have that you got to keep up on a regular basis.
David Nelson:
You betcha.
Gary Determan:
How’s that flag looking?
David Nelson:
Yeah, the flag’s looking better. For those that don’t know, we don’t maintain the property and whatever. Gary’s giving me a hard time here. We get calls periodically from people about this or that.
Gary Determan:
The hot dogs.
David Nelson:
The hot dogs are cold. The flag is tethered and it needs to be changed. It’s a privilege to be part of that organization down there. It’s a great honor as far as that we have to hopefully be part of the reason that it still exists as far as down there. And again, we’ve been blessed in such an unbelievable way as far as from a business perspective. And Clinton’s been so terrific to us that we took that on and we said, “We got to do our part as far as to try to help out here and support this.” A great, great offering that we have there. The showboat’s fantastic. We love to support that.
There’s a lot of community events. The arboretum, what’s taking place and the trolls. When I first heard about this, this doesn’t sound so good. But man, I tell you what, I’m in love with this stuff. And I have people that I talk to that have gone and seen other ones all over the United States, what have you. It’s just really, really cool stuff. And we’re lucky to be part of it and we’ll continue to do our part to try to financially make sure that some of this stuff continues on.
Gary Determan:
Isn’t that incredible? I get the mail for the radio station, so I go to the post office and right across the street-
David Nelson:
Sure.
Gary Determan:
… where one of the trolls is taking residence.
David Nelson:
Yes, exactly.
Gary Determan:
And it is incredible, there’s always somebody there.
David Nelson:
Exactly. I’m on my bike early in the morning and I try to get… I’m on the road by about 5:30 and I start, I’m kind of out in the country and I make my way in and I get up on the and I’m right on the as far as coming through. They’re heading towards Eagle Point Park. And the one that’s up by the old McEleney’s, I call it the lumber mill as far as up there. There’s always people there snapping some pictures and whatever. And I holler at them and say, “Isn’t it great?” Or something. And just try to pump people up a little bit. And we’re glad you’re here and some common. And we’re pretty fortunate. The gentleman that put those together, I don’t know if you were at that event down at the ballpark where he spoke. Oh man, that guy’s inspirational too. It’s just really, really cool stuff. And thank you for coming to Clinton and thank you for the people that helped cause that to take place. And again, we’ll do our part to continue to support it.
Gary Determan:
Always great to have you in. Thanks so much.
David Nelson:
You too, Gary. 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.