Upticks: Buyer Beware, Boomer Candy, and Retirement Crisis
By Jake Falcon on July 11, 2024
This week on Upticks, join Jake and Cory as they discuss ‘boomer candy’, a so-called retirement crisis, and how past performance doesn’t even indicate past performance.
Could paying cash end up costing you extra? How aware are you as a buyer?
Thank you for joining us this week! If you have a topic that you would like Jake and Cory to discuss or debate live on Upticks, please email it directly to me at luke@falconwealthadvisors.com and I’ll be sure to ask them to bring it up on the show!
Read a summary of the conversation below:
Personal Update
Jake and Cory begin with personal updates. Cory shares about family visits over Independence Day, including his baby’s reaction to fireworks, while Jake talks about settling into a new home and enjoying outdoor space with his wife and dog.
24-Hour Response Commitment
Jake emphasizes our commitment to client service, promising a 24-hour response time to client inquiries via service@falconwealthadvisors.com, highlighting the importance of accountability and responsiveness in client relationships. They pledge to take clients to lunch as an apology if the commitment is not met.
When Past Performance Doesn’t Even Predict Past Performance
They discuss flaws in traditional market indices like the Dow Jones and S&P 500, critiquing their outdated methodologies for reflecting current market conditions and advocating for focusing on individual financial plans and real-world investment returns instead of historic market indices or hypothetical returns.
Quarterly Review in Charts
Cory presents a chart showing the decline in publicly traded companies and the rise in private equity assets over the past few decades. They speculate on reasons for the decline in public listings and express concerns about the potential bubble in private equity due to less transparency and regulatory oversight compared to public markets.
Is There Really a Retirement Crisis? Most U.S. Retirees Say They’re Doing Just Fine.
Jake discusses findings from the Retirement Confidence Survey, revealing that 71% of retirees are confident about their financial security for life, primarily relying on Social Security. Despite concerns over its sustainability, many remain optimistic. However, contradictory data shows that while 53% believe they need $500,000 in savings, 64% haven’t achieved this goal. Debt and emergency expenses remain pressing concerns for a significant portion of retirees.
Source: Barron’s [https://www.barrons.com/advisor/articles/retirement-crisis-survey-d3308aca?refsec=advisor-center-retirement&mod=topics_advisor-center-retirement&mod=djem_WealthJournal]
These Hot New Funds Are ‘Boomer Candy’ for Retirees
Cory highlights a Wall Street Journal article on ETFs that use derivatives, attracting $31 billion in the past year. These funds, often employing options to generate income or limit losses, appeal to retirees seeking equity exposure with downside protection. However, concerns arise regarding their complexity, fees, and untested performance under market stress, akin to historical market failures with similar products.
Source: Wall Street Journal (6/23/2024) [p https://www.wsj.com/finance/investing/retirees-boomer-candy-investing-fund-62454210?st=cp5ih2ftn9rr4zk&reflink=article_email_share]
Want to Pay Cash? That’ll Cost You Extra
Discussing a trend at venues like Yankee Stadium and amusement parks, Jake reveals a practice of requiring patrons to convert cash to prepaid cards via reverse ATMs, often with fees attached. While convenient for vendors due to security and operational reasons, it raises issues of financial inclusivity for those without bank accounts or reliant on cash payments. The practice also draws comparisons to schemes like Dave and Buster’s bucks, where unused funds benefit the venue.
Thank you for tuning in, we hope you have a great week!
