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 show, aren’t tended 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. Now here’s today’s Financial Focus program.
Gary Determan:
And welcome to the program. It is the first Wednesday of the month. So Dave Nelson joins us and we continue to the bottom of the hour. Good morning, Dave.
David Nelson:
Good morning, Gary. How you doing today?
Gary Determan:
Not too bad. So you already got your ashes. I’m going to be doing that at noon today.
David Nelson:
Yeah, something new as far as at church. I guess the ashes are distributed in a different manner, pretty much throughout the globe and we in the States have done it a little differently and we’ve now gone to their path. It’s no longer on the forehead. It’s on your … it’s on the top of your head.
Gary Determan:
Okay.
David Nelson:
That was different. Father took a little time and explained it as far as the, ahead of time. He said they’ve been doing it way in Rome pretty much forever, but I learned something new. I don’t know if you knew that. I didn’t know that, Jerry.
Gary Determan:
No. I can’t recall if they did it that way last year or not. I don’t think so. But I can recall, I went to a public school and then on Ash Wednesday, you would find out who the Catholic kids were on Ash Wednesday.
David Nelson:
That’s right. I’m a public school guy, myself. Even though I coach now at [inaudible 00:01:49]. It was Whitier school to Washington to Clint High so I can relate very well to that.
Gary Determan:
Yeah. I went to [Horsevan Lions 00:01:57] and then onto Clinton High School. Okay. Yeah. I was out in Des Moines yesterday for the girl state basketball tournament back down, seated by the floor. Got a close look at the action. Cedar Rapid Xavier. They just had a little too much depth for Central DeWitt yesterday.
David Nelson:
Yeah, it’s just a real solid team. I saw some of the staff and whatever on them and again at this level, typically you don’t have two good players. You probably have three or four really good players. And, again, DeWitt just year in and year out, they seem to be extremely competitive and making a run. And would’ve loved to see them as far as advance, but you’re right. The competition out there. I mean, anybody can win at this level. You’ve got the top tier or teams and any given day night, whatever. A lot of those are day games. What have you. But yeah, it’s fun and enjoyable. Isn’t it? As far as to go out there, I really encourage everybody to, you got to do a time or two as far as in your life.
David Nelson:
I went out there as lucky enough, as far as to bring a team. That was just a real rush as far as I would experience. But also a few years back, we brought our kids out, trying to convince them that this is something that you want to do. And darned if I didn’t go down on the mat. We couldn’t help finish the season. But that year, they got pretty close as well. My kids did and which was last year, and it’s such a great environment. I mean, I just actually love it.
Gary Determan:
Yeah. And of Central DeWitt saying goodbye to a couple outstanding seniors, four years starters in Allison Meadows and Taylor [Veet 00:03:35]. And of course you saying goodbye to Lily Eisenhower, the last of the Eisenhowers, another four year starter.
David Nelson:
Yeah. Yeah. They’re going to really miss those girls. I mean, they were dynamic players. Last I heard at least, they were going on and playing college ball and playing at a high level as far as college ball, Lily is going down the path. She’s going to opt out of basketball as far as in college. I think she could play. She just chose that she really likes volleyball. And in the Eisenhower family, basketball’s a religion. I mean, far as most of those kids and the parents. And yeah, it’s going to be tough as far as for Andy. It’s going to be tough as far as for POP not to have an Eisenhower as far as on the bench and/or on the floor. So it’ll be different and I’m losing [Kaylin Goodsman 00:04:27], just an unbelievable ball handler, unbelievable athlete, probably the fastest player.
David Nelson:
I’ve had some quick players through the years, but I think she’s the most dynamic as far as first step. And she grew a ton as far as just in confidence as far as through the years, and she didn’t start all four years, but she played a ton all four years and she’s just going to be a massive loss as well. Lily, I think maybe I brought this up before, but she accomplished something that, I don’t know. Maybe we’ve had a few people in this area, but a thousand 1,000 points and 1,000 rebounds. I mean, that’s just numbing statistics. You get one of those, it’s pretty remarkable, but getting both 1,000 points and 1,000 rebounds is just astounding. So she’s going to be missed to say the very least.
Gary Determan:
Yeah. That is pretty phenomenal. No doubt about that. Now, what about you? Have you made a decision yet, coach?
David Nelson:
I really am trying hard as far as to make the decision. This past year was extremely difficult as far as from the standpoint of just headcount. I’m not [inaudible 00:05:34] as far as that. People don’t want to hear that out there, but just trying to lay the groundwork a little bit. And I said, if we have seven, eight, nine players far as next year, and I think we’re at about nine or 10 right now, hoping for 11 or 12/ I said at 12, I’ll consider coming back, assuming that people are willing to put in the time of the off-season. It’s getting harder and harder as far as to have people willing to put in the time and what have you. And the competition is I think the telephone, as weird as that sounds as far as to get people to get up and get out and do some running, what have you, and stay in shape and be competitive.
David Nelson:
I’ve gotten really spoiled through the years. We’ve had good program. I mean this year, making it to the third round again, which is my opinion pretty incredible as far as with the group that we started with. We got kicked to the side of the road by a team that beat us by 40 and changed. I think it was 44 to be exact early in the year. And we had a six point game as far as going in the fourth quarter with this team. So we improved a ton, but we’re losing really two big, big outstanding players as far as that contributed. So again, I’m kind of laying out my wishlist and I’m trying to be realistic, and I’m trying to be honest and blunt with people. That I really enjoy coaching, and I would be happy to return as far as to coaching.
David Nelson:
I just need some commitment from people that I’m not going to put in more time than they’re going to put in. And number two, we need the head count because with seven, eight, nine players in a normal night, this past season, we did everything half court and subsequently our kids weren’t in the shape that they could have been and should have been. And the bottom line is that at the end of the season, that hurt us. And in their defense, we just didn’t have the heads as far as to get up and down. So the 12 is where I’m drawing the line in the sand, and we’re going to have a chat tomorrow night. We’ve got our banquet as far as to wrap up the season and we’re going to see who’s going to be out. We’re going to see who else is going to be coming up as far as through the ranks and what have you.
David Nelson:
So we’ll see. It’s probably right now, Gary, I’d say probably a 50/50 shot. I love coaching. And I think, again, I’ve gotten better as far as through the years at it. Early on, I don’t think I brought a tremendous amount of talent to the table as far as [inaudible 00:07:57]. I had the ability to get people jacked up and play hard, but I didn’t have the other tools. I think now we’ve got both and I like to support the program and keep things rolling as far as that we’ve had. We’ve won five conference titles in 16 and a half years. I think that’s pretty darn good, and again, we’d like to keep that going.
Gary Determan:
All righty. Well, you keep us posted. Well, coming up, of course, we go into the second half of the half hour as it is the first Wednesday of the month. A lot of things happening in our world right now, Dave. What are we going to be talking about?
David Nelson:
Yeah, it will be that. I mean, we spent a ton of time talking to clients. We spent a ton of times, we’re doing some call in type stuff. Keep people current as far as what’s happening in Russia. I mean, it’s all over the news, but the Ukrainian people, and I was planning getting in there. But as far as to the studio, I’m sporting the colors of Ukraine today. I got really loud bright blue slacks, and I got a yellow sweater on. Basically sending the message in a very obviously small way, but Ukrainians are being thought of as far as in this office. I know that.
Gary Determan:
All right, very good. Let’s take our break for the weather. It is brought to you by Kelly Heating and Air Conditioning.
Andrew Stutzke:
The warmest day of the work week itself, still on track for today. Gorgeous conditions by this afternoon. As we see, a mix of clouds and some sunshine and light winds. Temperatures will be into the mid-sixties for this afternoon. Don’t get used to it though because more winter-like weather will return for Thursday temperature-wise. Mostly cloudy skies and highs only in the upper thirties. We do make some progress back to the fifties and sixties though for the end of the week. Friday, mostly cloudy with highs in the low fifties. And then Saturday, upper sixties, likely going to make an appearance with windy conditions. Could feel some strong to severe thunderstorms later Saturday. We’ll keep tracking that very carefully in the next couple of days. With your Storm Track 8 forecast, meteorologist Andrew Stutzke.
Gary Determan:
Well, we do have a mix of sun and clouds right now. Temperature is made its way to 40 degrees. Our winds are light and variable. Our update brought to you by Kelly Heating and Air Conditioning.
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Gary Determan:
First Wednesday of the month. So we continue to the bottom of the hour with Dave Nelson on Financial Focus. So, Dave, what have some of the things that your clients have been saying to you about this situation?
David Nelson:
Well, the good news is we’ve had no panic, no fear. Literally I went around the office yesterday. I was asking everybody as far as what feedback they’re giving, getting as far as from clients that are coming in. I think throughout the office, we’ve got roughly 1,500 clients that we work with. And I think we have four phone calls as far as from people that were a little nervous. So we consider that a win. We try to do our best as far as to prepare people in the good day days about the bad days ahead, and the bad days to be there holding hands. And we’re able to get out a really nice letter as far as talking about it. Basically looking throughout history as far as events like this and how things have unfolded. Again, who knows exactly. What’s going to take place here?
David Nelson:
We’re all guessing at this point in time. But if we look at the history books, what we find is that there’s been unfortunately many events like this that have taken places throughout over the last 50, 60 years. And historically, what it’s meant as far as markets are concerned is pretty significant potential selloffs as far as upfront. And then things seem to ease and 12 months down the road, oftentimes, and I want to emphasize often, not, not always, but oftentimes things are back to kind of normal. And again, it’s a callous type approach. And I was very careful yesterday when I was on TV as far as talking about these issues. That I do not want to have people view this, that this person doesn’t care about human beings and the suffering that’s taken place. My role is not to talk in those terms. It’s to try to help our clients make good decisions.
David Nelson:
And so we have to temporarily at least move that aside while we’re trying to make these tough decisions, as far as do we offload some stuff? Do we go in cash? What do we do? And so again, if history’s a guide and the only real guide we have to try to see how markets have reacted in the past. Initially, it can be frightening and is frightening, but in a relatively short period of time, historically things have come back. Now having said that, I use the example of the Cuban missile crises back in ’62. And we had a 14-day period that we believed we as Americans believed there was a great possibility that we could have a nuclear war. And the shocking thing about that during that period of time was that the stock market actually dropped very little. We’re talking under 5% during that particular window.
David Nelson:
And if we looked 12 months out, the stock market was actually up north of 15% during that particular period of time. So again, the human aspect of this can’t be ignored as far as how tragic this is. We’re trying to get organized around here and figure out what we want to do. We’re thinking about doing some type of matching campaign as far as we’ve tried to do in the past when there’s been a crisis like this. But if we just look at the raw numbers, historically things have done pretty well as far as again coming out of it.
David Nelson:
Now, there’s been other situations. And again, this is the other part of what’s taking place right now. We have two big things on the menu that we have to pay attention to now. One is obviously Russia, which we’ve been chatting about here. The other is an increase in interest rates. And so if we now factor that variable into our discussions as far as markets and what the expectations are, as far as trying to as best we can read the tee leaves, far as what’s going to happen going forward. When you’ve had multiple things at the same time like now, the economy is exploding in a big, big way on the upside. That’s great. We have this runaway inflation and subsequently the Federal Reserve has made it clear that they’re going to get on top of this inflation issue, which translates into many increases as far as interest rates, which then you roll in the Russian issue could spell big time trouble.
David Nelson:
Now I want to break out two important things, and I’ll try to make it as simple to grasp as possible for the folks out there listing. And that is that there’s patterns that take place when the Federal Reserve is in the process of increasing interest rates. It’s very simple from the standpoint if you have a slow increasing pattern and process. That would mean that the Federal Reserve has meeting here coming up. Maybe they’d increase interest rates now, but then they’re going to step back and maybe they’ll increase down the road. Maybe they won’t. So you have maybe a stair step where they did it at, one meeting. Then the next meeting, they didn’t increase rates. Then they did the next meeting, et cetera. When things aren’t too out of control, that’s generally the pattern, and the stock market is really done a good job of digesting that in the rear view mirror. In other words, in the past, that hasn’t caused the markets to come unglued.
David Nelson:
Now, the other path is what’s called the fast path. And that fast path is where they’re going to make it clear that we need multiple increases as far as to try to get on top of this issue. And we’re probably going increase every meeting and betting people out there, the Goldman Sachs of the world and the Bank of America are saying, we’re probably looking at five, maybe upwards of seven interest rate bumps. In other words, most of them would be probably a quarter percent. So quarter percent increase, three meetings, meetings, five meetings, seven meetings in a row. Stock markets historically have sold off and sold off pretty hard in that environment. And when we look at the data two years down the road and the market is actually lower than it was when that process started. That’s what keeps us awake at night. That’s probably the path that we’re looking at as far as going forward.
David Nelson:
That’s why when we talked to people and have been chatting with people were saying, “Why do you think you saw all these trades made about two months ago as far as in your account?” Where we were selling off investments and we’re going to face stuff. So a typical person that we work with today, Gary, is sitting on a boatload of cash. Probably low end 25% top in probably 35%, depending on their portfolios.
David Nelson:
It’s looked great obviously the last month, month and a half, but there’s been a few days in there where things rocking it up. And you’re saying, okay, is this thing over? And clients have probably felt the same. Is this over? Our belief is that this going to be over for quite some time. With increasing interest rates and with the crises in Russia and day by day just gets uglier as far as the techniques that are being used by the Russians, this is a bad, bad situation. And again, the world is rallying around them. And the bottom line is we think we’re in for, we’re going to have to slug it out as far as the investing world probably for quite some time.
Gary Determan:
Again, visiting with Dave Nelson. It is the first Wednesday of the month. We continue to the bottom of the hour. We got about six minutes left in the program. Of course, State of the Union was given last night by President Joe Biden. His first State of the Union. Did you get a chance to catch any of that, Dave?
David Nelson:
Yeah, I watched the whole thing. And again, as an American, this is what just drives me crazy. We’ve become so divided. And when we’ve had situations like this in the past, it isn’t good as far as you know for the growth of of the country. And I don’t know when it started, Gary. I guess I started paying attention, really paying attention probably 25 years ago, give or take. And it didn’t seem to be nearly as bad back then as we find it today and we have extreme leftish type, we have extreme righty type views, and we have very few people that find themselves in the middle. And I can truthfully say, I’m one of those in the middle. I find good as far as in both parties, and I can acknowledge the good as far as in both parties.
David Nelson:
And I’m sure people didn’t tune in today to be lectured, but I’m saying as a country, I think we all got to put on our big boy pants and we need to listen to the other side and stop blocking them out and thinking they’re a bunch of idiots because both sides have some good ideas. Again, the world that we live in has to do with money and it has to do with helping people make good decisions pertaining to their money. It also entails a lot of tax planning, which again, we all realize that nobody likes paying taxes, but we all I believe understand we need to pay our fair share, whatever that is. I don’t know who defines that, but we all need to pay. I mean, the roads don’t get repaved by hoping that they do and all the other infrastructure that’s in place.
David Nelson:
At the end of the day again, we’ve got to look at what’s best, not for the next 10 minutes. That’s my biggest gripe. I mean, when a politician wins, they literally are starting to campaign for the next time as far as the next election. Drives me crazy. We can’t make decisions as far as that are going to be good for the next 10, 20 years, we’re looking at the next 10 minutes. That is really hurting us as a country. We’ve got to focus on education. We got to get people better educated. We got to understand as far as our role, as far as in the world. And if it isn’t clear now, as far as in the last month, as far as the importance of our role in this world, it never will be. So we’ve got to keep a level ahead. People got to communicate. We got to talk. Again, I don’t believe and I don’t accept both sides as far as everything that comes out of their mouth.
David Nelson:
We got to work together and stop this extremist stuff. I mean, I’m so sick and tired of the media grabbing a hold of some of this stuff and basically acting like it’s viable and important information to get out there. It isn’t. There’s a lot of idiots that exist in this world that are out there yapping. And unfortunately, we got some people that buy into some of this craziness. Again, it’s both sides. So our objective, as far as here again, getting back to the core issues is to try to take all that out of there and help people make informed decisions to have a better life going forward. And again, unfortunately, politics comes into play often in those discussions.
Gary Determan:
Couple minutes left in the program. Of course it is still tax season. And I know you folks are doing a great job down there at NelsonCorp tax services.
David Nelson:
Yep. Really important function. For years we talked about it, Gary. I think I brought this up maybe in a prior program, but the idea of having somebody down the hall when we have a client in, and there’s a complicated issue, we NelsonCorp Wealth Management don’t give tax advice. Tax solution side does. We don’t. So it’s nice to walk down there, be able to talk to them. Clients love it from the standpoint of they can come into one building and get that important stuff taken care of. We’ve got really good relationships as far as estate planning attorneys that can also help. But boy, this time of the year, yeah, it’s crazy. You look at the parking lot down here. I mean, it’s just one after the next coming through the doors. Everybody wanting to get their taxes done, get them behind them. Hopefully they got a few dollars coming back in the mail, and the bottom line they’re a happy camper when it’s all said and done.
Gary Determan:
I know they’re busy. When I get here at 5:00 in the morning, I can see Mike’s car down in your parking lot as well. So I know he’s putting in some hours, of course. [crosstalk 00:22:31] You guys always do.
David Nelson:
Yeah. He gets here typically at about 4:00 AM. He leaves, I don’t know this time of the year. I’m going to say, it’s 6:00, 7:00 in the afternoon, early evening. And then Andy takes the opposite a time as far as … He’s not here that early, but he stays really, really late. Yeah. It’s part of the job description when you’re in the accounting profession and you’re doing taxes. It’s a heavy load to carry as far at this time of the year.
Gary Determan:
Of course, as you have always stated, you work half days, 12 hours.
David Nelson:
Yes. Yes. Exactly. Yeah. Clients, when you first bring that up to them, “You only work half a day?” Yeah. Half day, 12 hours. That’s reality. You you got to accept that. That’s part of the job description on both sides. That’s the way it is.
Gary Determan:
All right, Dave, thank you so much for your time. You have a good day now.
David Nelson:
You as well, Gary. 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.