Upticks: Chiefs’ Playoff Hopes, Wall Street Myths, Portfolio Alternatives, and Budgeting Tips
By Jake Falcon on January 24, 2025
On this episode of Upticks, Jake and Cory cover a range of topics, from the Kansas City Chiefs’ playoff prospects to the introduction of a new team member, Catalina Florez. They also delve into the volatile world of Trump Coin, discuss the pitfalls of Wall Street’s market predictions, debate the relevance of the traditional 60/40 portfolio, and share regrets from Americans over 80.
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!
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Read a summary of the conversation below:
Jake and Cory kick things off with an exciting discussion about the Kansas City Chiefs’ playoff prospects and their hopes for a Super Bowl victory. Cory confidently predicts that the Chiefs will not only make it to the Super Bowl but also win it. Jake shares his dream matchup for the Super Bowl: the Chiefs versus the Washington Commanders, highlighting the impressive performance of Washington’s rookie quarterback and the team’s unexpected success following a change in ownership.
They introduce Catalina Florez, the newest member of their team, who will be taking on the role of Jake’s executive assistant. Additionally, the hosts delve into the intriguing yet volatile world of Trump Coin, a cryptocurrency named after President Donald Trump. Jake and Cory highlight the risks and lack of intrinsic value associated with such speculative investments.
How You Can See Through Wall Street’s Ritual of Wrong
The first discussion starts with the topic of Wall Street’s often misguided market predictions. They explain that every year, analysts and strategists make market forecasts that frequently miss the mark, leading to misguided investment decisions. Jake and Cory advocate for focusing on long-term investment strategies rather than getting caught up in short-term market predictions.
Jake argues that adopting a long-term perspective can lead to more stable and potentially higher returns. By not fixating on short-term market movements, investors can help avoid the stress and anxiety associated with market volatility. Cory adds that while ignoring short-term forecasts might mean missing out on some gains, the potential benefits of a long-term approach outweigh the potential downsides.
They continue to discuss the importance of not oversimplifying investment strategies. They acknowledge that while long-term strategies are generally beneficial, they might not account for significant market shifts that can impact portfolios. Jake and Cory emphasize the importance of a balanced approach that considers both long-term goals and short-term market conditions.
Jake shares that during this time of year, he reduces his reading of the financial press to avoid getting caught up in market predictions. He encourages listeners to maintain a long-term focus and not get distracted by short-term market movements. Cory agrees, noting that while it’s important to be aware of market conditions, it’s important to stay focused on long-term investment goals.
The 60/40 Portfolio Isn’t Doing Its Job. It May Be Time to Ditch Bonds
Jake and Cory explore the debate around the traditional 60/40 portfolio, which allocates 60% to stocks and 40% to bonds. They discuss an article suggesting that bonds no longer offer the value they once did for retirees and that investors should consider alternatives like annuities.
Cory highlights the pros of the 60/40 portfolio, such as diversification and reduced volatility. He explains that balancing the growth potential of stocks with the stability of bonds can create a more stable investment portfolio. However, Jake points out the cons, including the potential for lower returns due to the conservative nature of the portfolio. He also discusses the impact of rising interest rates on bond prices, which can lead to losses for bondholders.
The hosts then explore various alternatives to the 60/40 portfolio, including higher allocations to international stocks, annuities, real estate, commodities, private equity, and peer-to-peer lending. They weigh the pros and cons of each option, emphasizing the importance of aligning investment strategies with individual financial plans
For example, higher allocations of international stocks can diversify geographic risk and provide the potential for higher growth. However, this can come with currency risk and potential political and economic instability in foreign markets. Annuities can provide a stable income stream and reduce reliance on market performance for retirees, but they are complex and often come with high fees, and can be costly to exit.
Real estate can generate rental income and potential property value appreciation, but it requires significant capital and involves property management challenges. Commodities like gold can hedge against inflation and provide diversification, but they lack intrinsic value and can be volatile in price. Private equity offers higher potential returns and access to different investment opportunities, but it is often illiquid and requires high minimum investments. Peer-to-peer lending can diversify risk and offer higher returns than traditional savings, but it carries credit risk and is not heavily regulated.
Jake and Cory conclude that while there are many alternatives to the 60/40 portfolio, it’s important to consider the specific needs and goals of each investor. They stress the importance of a diversified approach that balances risk and return, rather than chasing the latest investment trends. Jake emphasizes that investors should determine the rate of return needed for their financial plan to work and construct a diversified portfolio designed to achieve that target while mitigating risk.
The Financial Regrets and Wisdom of Americans Over 80
In the final segment, Jake and Cory discuss the financial regrets and wisdom shared by seniors over the age of 80, as highlighted in a Wall Street Journal article. Many seniors regret not starting to save earlier and not investing more aggressively when they were younger. They also emphasize the importance of seeking professional financial guidance and maintaining a diversified portfolio.
Jake and Cory highlight the benefits of starting to save and invest early, such as the power of compounding, which can significantly grow investments over time. They use Warren Buffett as an example, noting that his wealth has grown substantially due to the power of compounding over many decades. Starting early allows for more time for investments to grow, building a substantial nest egg.
They continue on to discuss the value of professional financial guidance, noting that while it comes with costs, it can provide valuable insights to help individuals make informed decisions. Jake mentions that their team at Falcon Wealth Advisors includes five financial planners who look at financial plans every day and seek opportunities to help enhance their client’s financial plans. He emphasizes that working with a competent wealth advisor can pay off in the long run.
Cory adds that maintaining a diversified portfolio is important for managing risk and achieving long-term financial goals. He points out that while some people have become wealthy through concentrated investments, it’s not a strategy he likes due to the high risk involved. Diversification helps spread risk and can lead to more stable returns over time.
The hosts also touch on the challenges of maintaining a strict budget and living within one’s means. They acknowledge that budgeting can be difficult, especially for those with families or those who are retired and living on a fixed income. However, they emphasize the importance of aligning spending with personal values and goals to help ensure financial stability.
Jake shares his experience with budgeting, noting that successful budgets often fall into two categories: those who live well below their means and those who are meticulous in their record-keeping. He invites listeners to track their spending for three months and compare it to their values to verify alignment. If further help is needed, he encourages booking a meeting with their financial planners.
Thank you for tuning in, we hope you have a great week!
