3 Reasons a Bear Market Could Be Looming
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Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein. Good afternoon, fellow investors, and welcome back to InvestTalk. This is our March 11th, 2025 edition. And I am here for you this hour to help you navigate through these challenging times and

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Helping you have the right frame of mind so that you are avoiding the pitfalls that many people fall prey to because they use emotions to make decisions versus facts. And I also want to help you find opportunities, opportunities that often are not in plain sight. The best opportunities are hidden. They aren't on the front page of a newspaper or a magazine. They aren't being talked about by your cousin, brother, or neighbor.

Okay, and so hopefully using the mindset that I help you with, you can continue to search and find ones that fit your risk tolerance level and your goals. So it's about once again, avoiding pitfalls and capitalizing on opportunities. Now in just a bit, we'll talk about today's market performance and run down some show topics. But as usual, we'll tackle our first caller question now.

This is Brandon in D.C. Looking for your thoughts on Meritage Homes Corp., ticker MTH. Just wondering if this is a decent stock. So I'll look forward to listening on the podcast. Thank you. All right. Looking at Meritage Homes, MTH is a symbol, $5.3 billion market cap, and it builds single-family homes, mainly to first-time and move-up buyers.

in central, western, and eastern regions of the United States. So kind of all over. About a 2% dividend yield based on current price. Earnings are supposed to fall 12% this year to $9.39 and go to $10.77 next year. Now they're in $10 next year and it's a $74 stock. It's about a seven and a half times

p multiple which is typically pretty good but we'd like to look at more cash flow than just earnings and cash flow has been kind of all over the place and it's actually now negative and if you go back 10 years it's actually actually been negative about half the time so i don't love that and then when i head over to its profitability is return equity right now is 16 that's pretty good

Now it dips in 08, 09 into negative territory, but it's kind of hung around 11. And it kind of it's called the mid teens. Okay. In profitability for the past decade or so. But it peaked back in 2022, around 30%. Now down to 16. It's definitely had to lower. That worries me a bit. Good balance sheet, not a lot of debt, but it's in a downtrend like a lot of the homebuilders.

Now, generally, I think home builders are going to do fairly well over the next three to five years, mainly because there's a dearth of homes out there and a dearth of housing, whether that's single-family detached homes, condos, apartments, et cetera. There just hasn't been enough building nationwide. And this is in a downtrend. And I think there's opportunities within more the home remodeling space. So we have companies that

sell into that. Think of companies that sell paints and cabinets and things like that for remodeling current homes, as well as sell into the new home market. So we like those type of companies. This would be more of a pure play. It's in a downtrend now. I don't get excited about it at this point, but it's not bad. But I think you have better home builders out there

This is kind of middle of the pack of the home builders that are public. So I wouldn't get excited about this. I'd pass on it. I'd look for a better one that has more consistent profitability, better cash flows, et cetera. So that was Meritage Homes, M-T-H. Now let's take a live call. Jason from Illinois wants to talk about taking a loss. Hi, Justin. Thank you for taking my call, and I appreciate everything you do in helping us become better investors. No problem.

I had a question recently with the market pullback. I sold a stock that I trade throughout the year, and it flattened out, and I made the mistake of getting back in, and then it took another downturn, and I just completely got out of stock. My question to you would be what

The first sell be a wash since I'm going to stay out of it now for 30 days or with the entire loss amount. Could I apply that to capital gains next year or is it just my most recent selling loss? Yeah, it's the most recent loss. So you don't touch it for 31 days and then you can take that loss. Okay. Okay. But that would not apply to the entire amount I lost on that stock than just the most recent sell. Okay.

No, it should – as long as you don't have any wash sales, you take a loss and then buy it back within 31 days, you can apply that loss to a future gain. Okay? So I'm not sure – I did do that. I just don't –

I sold it and bought it back within three weeks. And then I sold it again. So I don't know if that first sale is a wash. You know, I'd have to look at all of these, you know, exactly. You know, buy, sells, all of that to really tell you. Now, your broker will tell you that, though. I don't know if you know that. But you'll get, on your 1099, it'll say whether it was a wash sale or not.

So it's not something you have to figure out. Okay. Your broker will tell you. Okay. Um, so, you know, in this forum, it's hard for me to, I have to really, if you want to send me your, you know, your trades, I can kind of, uh, figure that out for you. Uh, exactly. If there are any wash sales in there. Um, but yeah, don't, don't worry about figuring out yourself. Your broker will figure it out for you. Thank you very much. No problem. Thanks for the call.

Now we're going to a short break and on the other side, I will touch briefly on today's market activity and run down the show topics and then play more of your questions here on InvestTalk. My phone lines are open and waiting for your finance and investment questions right now, live at 888-99-CHART.

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Now the clock is ticking. And if you're going to join the fun in our second annual InvestTalk Market Madness competition, you'd better hurry because the entry deadline is just less than a week away. It's March 17th. That's this coming Monday. And the first matchup is on Tuesday. Okay, so a week from today. And that's right.

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Now, we have a lot of ground to cover over the next 45 minutes or so, and time permitting, we will cover all of it. Our main focus point is about three reasons a bear market could be looming. What are the main culprits here? We've already seen a downdraft over 10%, so we have a correction officially in the NASDAQ. We almost got there today on the S&P. I have to look at it. I think it was over 9%, 10% is official correction.

I think we're nine something at the low. I'd have to take a look at that. But for all intents and purposes, we've had a solid correction in markets. Will that turn into a bear market? We'll talk about that. In addition, we have other topics on the docket. One is in regards to the rotation into foreign markets. And what is the catalyst there? Is it just the sell-off in U.S. stocks? We'll talk about that. And then saving for retirement.

Research says it's more than just putting money in your 401k. It goes beyond that. And part of it is truly having a vision for your future. So we'll take a look at that. And then the insurance industry, if you have time, it's a good time to be in insurance. And we'll talk about why that is.

We also have voice bank questions. One is on Shutterstock and the other is on BWX Technologies. And we have some comments that came in via the YouTube comment section as well. So we'll get to those. But of course, we welcome your finance and investment questions right now at 888-99-CHART.

Let's go take a look at the market today. It was a red day still. If you look at the broader indices, the Dow was down over 1%, S&P down three quarters of 1%, and the NASDAQ down about a quarter of 1%. Now, those numbers right there will tell you something's a bit different, right? The NASDAQ has been leading the market lower over the past all three weeks. And today was the relative winner, even though it was still red. But it was a different quarter.

tenor to the market. We had a major support level around the 5,500 mark. Part of that was, I'll try to keep it in simple terms,

There's a dealer unwind of what's called gamma hedging. Basically, dealers have to hedge when they sell call options. And that's reflexive in both directions because when the market goes up, they have to buy more of the underlying and it kind of keeps that momentum going. But when there's some sort of spark to the downside, well, they unwind those positions. I mean, they don't have to hedge as much. And so they sell the underlying. When I say the underlying, that's the stock, right?

whether they're selling options in Apple or Nvidia or whatever, they're selling the underlying stock. So that's one of the big reasons why the NASDAQ has been underperforming so much because there's most speculation, most option activity in those big tech names. And so

That's the driver, big driver of that unwind. Well, the unwind based on the volume of options and analysis here is that around 5500, they are pretty much mostly done with selling the underlying stock that they've been holding to hedge their exposure. And so.

you you got down to i think it was uh was a loaded around 55 12 or something like that in that range and so it's not a shock that we got a bounce up to 55 what do we call today it's 55 72 okay yeah what was the load today the load today was 55 28 there we go so it was in the 55 uh 55 to 5500 level and we got a bit of a bounce like i said and another change was that some of the

non-cyclical areas of the market that were getting a lot of money flowing into them. Think consumer staples, utilities, healthcare, communication services. Those actually did poorly today. You had T-Mobile down 4%. Same with AT&T. Verizon down 6.5%. So all of those names, which had really been crushing, certainly didn't do that well today.

The consumer non-durables, the staples, you had Procter & Gamble down 2%, Coke down 0.5% there, Pepsi down 2.5%. So a lot of those consumer staples certainly struggled. And then the healthcare stocks, you had Amgen down 2.5%, Abbott down over 3%, Johnson & Johnson down over 1%. So those sold off as well. You also had Visa and MasterCard down over 2% each.

Nvidia bounce that was up abroad. Com was up. Meta was up. Netflix was up. Amazon was up. A lot of these names that have really been selling off. They were up on the day. Only Apple and Google are the mag seven really struggled. Tesla had a nice little bounce 3.7% on the day, but still, you know, it's down a lot over the past couple of months. So that was the market today. You have the dollar continuing to be weak. You had gold continuing to be strong. So that was kind of similar to what we've seen as of late. But once again, a lot of this is just

the market hitting some support here around the 5500 level in the s p could you get a bounce i do think we are set up for some sort of a bounce probably throughout the week

you know is it a strong bounce you know it's hard to say at this point it could be very meager and then we roll over and you know a week or two uh and and break 5500 that certainly is possible or we get a more durable bounce we'll know a lot whether we can break above yesterday's highs there will be a better tell of whether this that bounce is durable or not now we're going to take a break and on the other side we'll answer trey from san francisco you are next

InvestTalk, now with more than 60 million downloads. Justin Klein and Luke Guerrero are ready to answer your finance and investment questions 24-7, 888-99-CHART. Let's go talk to Trey in San Francisco looking at MKSI.

Hey, Justin. Thanks for taking the call. Of course. Do you own this or are you looking to buy it? Yeah, no, I own it and I'm down about 30%. It's now at like the one year low and I'm wondering if this is like a double down opportunity or it's just dead money. Well,

For everyone else out there, MKSI is in the semiconductor equipment business. So manufacturers and supplies instruments and components used to control and analyze gases in the semiconductor production process.

So this is a name that earned a lot of money in 2021, $11.36. Earnings went down to $4.42 in 2023, then bounced back to $6.60 last year. So it's earned $7.06 this year. But those earnings estimates are expected to continue lower. And that's why the stock is broken lower. And one of the big issues here is the debt.

$5.3 billion market cap, but they have about $4.5 billion in long-term debt on their balance sheet. So leverage is really what is killing them.

And their free cash flow, while it has improved recently, it's still down from its high in 2021 of over $500 million. And it looks to have weakened, especially over the last couple of quarters. Not in a major way, but the trend is certainly lower. And I think that's a big issue here. So while it's definitely oversold, it's in a downtrend. It's likely headed back to the mid-60s. Those are the lows from a couple of years ago, 2023 and 2022.

two. Okay. So you're going to see some sort of triple bottom. Whether that triple bottom holds is another question. Now, that's the area if you're going to double down, that's where you'd want to double down. And if it breaks that, then you're out. You've already taken a lot of pain.

you know i i just think it's a very still very risky the semiconductor industry was doing well now it's you know it's it's certainly slowing in a big way and you're seeing that with the sell-off across the space so you know i just think i i think of capital the opportunity cost what can i do with this money and a lot of people want to just break get back to even

And frankly, you know, I don't think this is worth holding onto. I think there's better opportunities out there in the market. So I would personally just sell it and move on. Great. Thank you so much. No problem. Thanks for the call.

Now, we've been telling your friends and family that you can find us over on YouTube in video form, and we had questions submitted via our YouTube channel as well in the comments section. So let's go answer one of those questions. Mystery Man says, "I keep viewing that tech sector has been downside. However, I've been following up with Dell and I wonder if this is a good chance to pick it up or we expect to see more downside in that area."

All right, looking at Dell, a name that most people know what they do, right? Make computers. And their business boomed, especially during the pandemic. And business, the stock went from the mid-30s in early 2023 all the way to a high of 180. And now we're down...

to 91 and change. Now this is support. This is pretty good support actually right at this level. So from a trade perspective, it's actually a very good spot. If it breaks this, if it breaks, you know, call it $87, yeah, $87, $86 with any gusto, you're out. Okay. So less than 10% out from here and it certainly could bounce back. Now Dell, it's a good company.

It's still very profitable. There's obviously a lot of demand for servers due to AI. But that demand, once again, is waning just a bit. At least that growth in demand is waning just a bit. You're seeing that with earnings estimates for this year and next year coming down slightly. But it's entering $10 to 51 cents next year on a $91 stock. Nine times earnings for a company that has a, let me see, does it have a good balance sheet?

Pretty good. $19 billion in debt on $63 billion market cap. Pre-cash flow about $1.8 billion. That's not bad. So I think from a risk-reward standpoint, this is a good spot. Now, is it guaranteed to hold? No. Obviously, we're in a more volatile market. If demand for PCs takes a significant leg lower, this will...

Certainly, probably break those levels. But once again, from a risk-reward standpoint, I actually like this level. But no, you need to have that out, kind of around that $86, $87 level. Thanks for the call, or thanks for the question. And let's go tackle another one of those questions, but this one via iTunes. And we always put these usually as fast as possible on the show. So if you want to get a question quickly,

Head over to iTunes and leave us a review and put your question in there. And ADL 141 says, can you look at ticker love L O V E? This is love sack L O V E small name, $255 million market cap. Certainly considered a micro cap. Okay.

And let me look at the debt levels. Always use small names. They don't have as easy access to capital as some of the larger names. So they typically don't. If they have a lot of debt, that's a big issue. But this one doesn't. It has zero long-term debt. Actually, it has a bunch of cash on its balance sheet.

And free cash flow right now is $28 million on an enterprise value of $193 million. So you're talking about a 15% free cash flow yield. I like that. Earnings are expected to fall, though. That's the big issue here from $1.45 last year to only $0.45 this year. Now, it is approaching some support down here from the lows back in, when was that, 2023? Yeah.

no 2020 there we go uh around oh actually yeah 15 yeah it's it's it's pretty much at support so this is a good one of those other good risk versus rewards if it breaks fourteen dollars to any gusto i'd be out on it but pretty good resource versus reward right here now we're heading into a break i'm ready for your calls at eight a day 99 chart

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888-99-CHART, 888-992-4278 is how you get through and ask your question on today's show. Now, our main focus point is about the bear market and whether it could be looming. Now, we've already had about a 10% drop in markets, right? We're about six from the high at 61.50, okay, on the S&P. We

and the low today uh about 61 or 20 something it was about 620 points 625 points from the high so we've had that correction 10 now okay but can it turn into a bear market that's really the true question right is this a blip in the radar like the yen carry trade unwind of last summer or is this something more protracted like a 2022. now there are three catalysts here

that we'll talk about and the main one is inflation we know that tariffs are inflate are inflationary simple as that i've talked to many of other business owners and c-suite executives in my network and anybody that deals with physical goods they're having trouble

And it's going to cause them to raise their prices in order to maintain their margins so that they can continue to pay their workers. And they've instituted a hiring freeze. They were going to hire, they were probably going to grow their staff anywhere from 4% to 6% this year. Now it's nothing. So clearly this is a problem for the broader economy, but once again, for inflation. And

you know he's already talked about you know 20 on china now that canada mexico ones were most of it is exempt so far uh you know anything that was under usmca which is pretty much everything um so that's one that one's been kind of held off a little bit and but reciprocal tariffs are likely on at some point and so if all of his tariffs are put into effect

it would compromise 4.8 percent of us gdp now by comparison the smooth holly tariffs of 1930s which everyone said worse worsened the great depression that was 1.4 percent of gdp now i do think it's a bit overblown that the smooth holly tariffs were the word that was the real culprit for the great depression i think it definitely hurt but there was there were a lot of other

policy decisions that caused that to be much worse than it had to be. But nonetheless, this is clearly a potential catalyst for a Fed that maybe won't be as dovish. Now, the expectations for Fed rate cut are increasing, though, but it's still only one rate cut between now and June. That's pretty much what's priced in. There's a little decent chance there might be two, but one to two over the next three meetings.

And then it will all be about QT. Are they going to continue with QT? Most likely they'll wind it down. So there's likely a dovish pivot here. But the question is how much can they really pivot if inflation does accelerate? So that's certainly the main catalyst. Now, second is how that feeds into consumer sentiment. Now, the conference boards...

Consumer Semiconductor Index fell 10% in February. That's the steepest one month decline since August of 2021 and the lowest level since 2022 when the S&P was near its lows after that bear market. So consumers are becoming more pessimistic about business conditions, less optimistic about their income.

And we know consumers are not confident, even if they have the capacity to spend. I think that's something that remains is, you know, there's still a lot of equity in homes, stock prices, while, you know, they're down 10%, they're still way up from where they were just a few years ago. So there's still a lot of balance sheet wealth out there that consumers can fall back on. And oftentimes when they feel less pessimistic,

It's more in words than actions. So it's not always 100% correlated. So understand that. So while I think this matters, I think it matters far less than ultimately what inflation looks like and how that manifests in monetary and fiscal policy. Now, the third pillar here is valuation. Now, I don't love I think I want to highlight this because a lot of people will call that out. And I do think

Generally, there's a lot of overvaluation in these tech equities that are trading at just very high cyclically adjusted P ratios. But there's still a lot of pockets of opportunity. Now, right now, the CAPE ratio is the second highest level ever outside of 2000 and similar levels as we were before the sell off in 2022, late 2021.

and so there's that catalyst that you know when things get well usually what happens is when the market's going up stocks are going up people don't really care about valuation it's when they start going down and they look up and they say oh you know what should this be trading at 45 times earnings probably not right there's no there's not the justification there's not that underlying dividend that it's paying or underlying you know

cash flows that it's creating that makes the valuations worthwhile. And so that's why I've said this for the past couple of weeks here, when people call about these big tech names and growth names that are down 30, 40% from their high, what I always say is it can go much further. Usually they go down 60, 70, 80, sometimes 90% because the valuations are just so egregious. So valuation does matter, but it's also not a catalyst for a bear market.

it's just something that can kind of be fuel to the fire when a bear market does occur which is usually driven more by fiscal and monetary policy and i love this quote as one of my favorites is what's the it's there's what's the difference between a stock that's down 80 percent and 90 percent well it's 50 right stock that goes down 80 percent to get down to down 90 needs to go down to 50 more right so a lot of times it looks like the low but can easily go down

right 30 again 40 again it's not uncommon and so that valuation can certainly build on itself so that's where we are with this market we're in a uh technically we're at support there are some dealer positioning things that means the pressure to the downside at least for the short term is probably going to abate a bit but there are plenty of catalysts out there that can push this into a 2022 type market

but that also means there's a lot of opportunity in 2022 it was mainly the big tech names that drove down the market just like it was over the past couple of weeks and there were plenty of Industries that were up I think energy I believe that year was up and so they're likely to be sectors like they already are that are up on the year even though the broad indices are down look at consumer staples health care I'm seeing materials looking better especially if the dollar goes down a lot of the hard assets are going to continue to do well

So don't think that just because you have a bear market that you have to sell all your stocks. No, there are still great opportunities in the markets right now. Now let's pivot back to the Investstock Voice Bank for a question that came in earlier from New York.

Hey, Justin and Luke, this is Marlo in New York. Love the show. Keep up the great work. You help us a lot. I have a question on Shutterstock. I know a company that you guys have talked about and liked in the past. I own it. And Getty announced an acquisition to buy Shutterstock. And the price that they have committed to is almost $29 a share.

Since that announcement, the stock has dropped from 32 down to 20. At the same time, they've released earnings. It seems like a solid company. It pays a good yield. Of course, I know the deal could not go through, but it was a solid business beforehand.

So is this like a good arbitrage opportunity to buy now? The stock's currently at like $20. And then obviously if it closes, that's a significant upside. And then if it doesn't, again, it's a strong business in an area that could see growth. I know there's competition as well with AI and all those things, but I think a risk worth taking. I'm guessing other listeners might be thinking the same thing since this is a company I know you've liked in the past.

thanks guys i'll listen on the podcast have a great day all right looking at shutterfly okay so this i'd have to look at the deal let's see here let me get the information here i haven't looked at this in a while this was back in what was the date on this buyout january 7th okay and they're merging

okay and both stocks went up but i would imagine here that this deal here you go deal terms shutterfly investors receive twenty eight dollars and eighty five cents per share in cash for each share they own however shutterfly stock and it can receive getty stock or a combination of cash and stock it looks to me that that's that's interesting if it's all cash

that makes sense that this that doesn't make sense that this is dropping so much because it should be you know you should be getting that 28 dollars per share so it does now i will say that in the face of it it looks like yeah i i i rather just

I'd rather buy it. You get my $28 and that's what I elect for. Getty Images stock has come down dramatically. So that's kind of an issue. If this is an all stock deal, I could understand why that was the case. But it looks to be the option of cash. Now, because it's gone down, tells me that's likely to fall through. That's what this is telling me.

Getty stock is down that they maybe thought they had lined up the financing, but they didn't. And so this would be a big bet that they can actually line up the financing. Now, I'd have to dig into this a little bit more. I haven't looked at this one in particular, but that's the signal here that the market is telling me. So I probably wouldn't buy it. Let's see. Yeah. Getty Images just did a refinancing of a billion dollar loan.

Yeah, I just would pass on it. You know, that's your bet here that this is going to actually go through. But it's this is a clear signal that it won't. And it doesn't shock me because both are very small. And, you know, in times like this, it can be much harder to get these type of deals through. Thanks for the question.

let's keep things moving and get a get to a fresh question submitted via the comments section over on youtube channel peter pavlodeki says question on tko earnings recently came out with a profit for the first time as well as dividend how however if i'm not mistaken they've been paid that payout is more than the reported earnings per share why would a company do this well remember a earnings per share is an accounting metric okay it's an accounting metric but dividends are paid out with cash flow

So that's number one. So maybe cash flow looks a lot better than earnings. And earnings are expected to rise. While they were only $2 last year, earnings are expected to be $2.82 this year, $5.14 next year. Now what does TKO do? This is the UFC and WWE combined. So that's TKO Group Holdings.

The business of professional wrestling as well as UFC, it's doing well. It's headed in the right direction and it's probably very predicated on ad revenue or in pay-per-view. And so clearly the market is seeing or analysts are seeing, hey, there's probably ad revenue deals that are coming through this year and next year, maybe big fights that are likely happening, etc.,

And so that's what you're seeing is, yeah, they're paying a dividend because they're expecting earnings to go up, cash flows to go up. And that wouldn't shock me, right? Both tend to be growing in popularity. I'm not sure about wrestling, but I know UFC is. And their cash flow last quarter, 12 months, is $508 million. On a $11 billion market cap, it's about a 5% free cash flow yield. And if earnings continue to go up, I'm sure those cash flows will go up as well.

So that's how they pay it. It's not with earnings, it's with cash flow. And so that's why when we look at the dividend payout ratio, we don't just look at that. We look at the cash dividend payout ratio, which means how much cash flow is the business creating to pay out that dividend. And based on that, the cash dividend payout ratio right now is 13%. Plenty of room for them to pay that dividend, which looks to be about 1%. So it's not a big dividend yield currently. Now we're heading to a break.

Blake from Seattle, hang on. You'll be next here on InvestTalk. Every investor is working to build a secure financial future. The more you learn about how the market works, the better your chances for success. InvestTalk 888-99-CHART. Let's go talk to Blake in Seattle looking at GAMB, which is gambling.com group. Do you own it or looking to buy it?

Hi Justin, yeah looking to buy it. Okay, what do you like about it? Yes, so from a PE perspective it looks like it's in around 15 and the Ford PE is looking even better and From what I see it's a UK based company

And so non-U.S. exposure right now seems like another good idea. So I'm looking to get your thoughts. Well, I generally like your foreign exposure idea, but I'm assuming, do you know if the majority of their customers are U.S.-based? I don't. Okay. I would definitely look at that. Now, one issue is, yeah, they have good earnings, but their free cash flow is now...

turned basically flat over the last 12 months, and it peaked out at about $15 million in 2023. This is a small company, $425 million market cap. Now, very little debt, so I like their balance sheet. Return on equity is 24%. I like that. That's good profitability. However, I don't like that cash flow situation, and I worry that if...

If most of their customers are US-based, that's what I would try to find out. The gambling industry in this country is growing. And...

I would worry that other bigger names like an MGM are going to usurp a company that is offshore. This is a Channel Islands-based company. And so I would imagine that's why it's trying to get around the gambling laws nationally. And I could easily see a trend change from governments throughout the country on the federal level.

So that would be my biggest worry in the fact that it's, it's profitability has, um, has come down and it's cash flows come down. Now, from a technical perspective, it's that support right around support here between call it a 11 and, uh,

Now it's at $12. Now it's at $12.06. So it's into that support zone. But to me, it would be a trade only. The MACD is now turned in negative territory. So I would imagine, I don't think this bounce is probably going to last. So it would be a trade only. I wouldn't be buying it for an extended period of time. Thanks for the call. Thank you very much. No problem. Now, Leslie, let's talk about saving for retirement. And at the top of a lot of shows, they talk about mindset. And

You know, mindset is important when it comes to investing, to avoid, as I said, the peaks and valleys of the emotions, but it's also important when it comes to saving. Most people put saving for retirement off too long. And the main reason is because it's hard to really imagine what it is, what it looks like. But studies show that when you do that, when you start with that end goal in mind, you are much more likely to be successful.

Now, one experiment, this is a Swedish fintech company, and they had people think about the future first when they're making an investment decision or making a financial decision. And they were 14% more likely to invest in long-term savings products when they were prompted to think more about the future as opposed to the present. Most people talk and think about the present. What can I afford to save? What's happening in my life today? What's my income? What are my expenses, et cetera?

But when you pose the question like, think of year 2034, what do you want your life to be like? And what do you wish you did today in 2025, for example? And so it's about keeping that end goal in mind. That's what I do with clients, right? What does your retirement look like from a lifestyle perspective? Are you spending more in retirement, less in retirement, the same? Are you traveling a lot? Are you spending time with kids? Are you playing golf? What are you doing?

And once you do that, then it feels more real. When something feels more imminent, feels more like, hey, that's not too far off, you're more likely to make those tougher decisions to make that situation better. So this goes always back to have a plan. People get caught up in the minutia of investing portfolios and things like that. And that's fun. That's interesting. But when it comes to reaching goals, you need to set goals first. And when you do that, you're more likely to be successful.

Now I'm Justin Klein, this is another InvestTalk program. We thank you for listening. We encourage you to tell your friends and family about our free podcast downloads, which you can find anytime at iTunes, Spotify, Google Play. Be sure to rate and review on iTunes as well. And our second annual InvestTalk Market Madness competition is underway and you can enter to play and win $1,000 by showcasing your investment skills. Just visit investtalk.com to join the fun and view additional details. Registration does close.

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