How to Lower Health Costs in the New Year
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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 Thursday, February 20th, 2025 edition of InvestTalk. And I'm excited for this hour with you as usual to give you perspective and data that you can hopefully understand

Bring back to your situation, make better decisions with your money day after day, week after week, year after year. That's what the show is about each weekday. And more importantly, it's about your questions. And when you bring your questions to the show, you not only help yourself, you help your fellow InvestTalk listeners as well. Because guess what? If you have a question about something, there's a very strong chance that you're

tens, if not hundreds of other InvestTalk listeners are asking themselves the exact same question. So I always encourage everyone, if you have any question money related, don't hesitate to pick up the phone and give us a call at 888-99-CHART. Now in just a bit, we're going to talk about today's market performance and run down the show topics for the hour. But first, as usual, we'll tackle this caller question now.

Hello, InvestTalk. This is Matt calling again. I have a question regarding Toro Company, ticker symbol TTC. I own it. It's about 2% of my portfolio. I'm down about 15%.

Just wondering if it's still a good company to hold long term or should I sell and move on? Thanks a lot for everything you do. Thank you for the call. Looking at Toro Company, it's a name we actually own for a client. It's not a huge position, but it's small. But we really like the business.

Overall, now, valuation historically has been, you know, a bit above average, but you're going to pay a premium to some degree for a business that is just this consistent return on equity is 26 percent return invested capital, 16 percent over the long term, though, it tends to have a return on equity in the mid 30s. And now, you know, the question is, is it is performance or is profitability structurally different?

lower than it has been in the past that's a big question but it's still very very profitable with solid a solid balance sheet very minimal debt and it's balance sheet free cash flow of about 466 million on a market of 8.2 billion that's about a five percent free cash flow yield that's pretty good and what are they doing with that cash flow well they're paying about paying out a dividend about 30 that cash flow is going to a dividend but the rest is just buying back shares and that's

a very good idea when you have this high of return on capital, return on equity, et cetera. So what now? No, let me back up. What does Toro do? They manufacture turf maintenance and landscaping equipment, irrigation systems. So think of commercial and residential lawnmowers and, and you know, those type of products that are used to maintain land,

Maintain your garden, your turf, the football fields, et cetera. Okay. So great business, well run. And, you know, it's as cheap as it's been in a while, really since 2019. Enterprise value to EBIT is around 16 times. It was recently as high as 27, 28. Now it's at 16. I think it's undervalued here.

you know the momentum is not there relative strength is about 25 you know not great it's you know been kind of in a downtrend since peak in 2023 but not a strong downtrend just to pull back to where it was uh in early 2022. so you know we like it uh you know does need to firm up on its uh you know chart it's not a great chart right now uh it's kind of neutral near support but if you're looking as a long-term hold

I would hold at these levels. Great business at a fair price. Now, thanks for the call. Now let's get into what we're going to cover over the next 45 minutes. And our main focus point is about how to lower your health care costs in the new year. I know we're about six, seven weeks into the year, but it's never too early to start to kind of, we're never too late to start to prep, right? So we'll look at what can kind of create a financial surprise for you and much, much more.

We'll also dig into some other topics. One is the stagflation. Nobody's really talking about it. Nobody has talked about it in a little while, but you're starting to see a scenario where that could happen, where you have strong inflation, above average inflation and tougher economic growth. So we'll look at what kind of signs there are and what that might mean for the market. Also kind of in conjunction with that, Trump is looking to add tariffs on lumber.

and what this could mean for certain slices of the stock market as well so that's on the docket for me we also have voice bank calls one is on senior living and the other is on gilt g-i-l-t

galette satellite networks and then we have some questions submitted via our youtube channel comment section over on our youtube channel so we have a lot to cover on today's hour but of course most importantly what we need to cover are your questions so don't hesitate to pick up the phone and give us a call at 888.99 chart now we're heading into a short break and on the other side i'll take a look at today's market activity and then play more of your questions on invest talk

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Your questions are free. The answers are unbiased. Justin Klein is here now, ready to take your calls live. InvestTalk, 888-99-CHART.

Now let's go take a look at the market today. It was a bit of a mixed day, but mostly down. You have the Dow down about 1%, the NASDAQ down about 0.5%, S&P down 0.43% on the day. Some big losers, Tesla down nearly 2%, Amazon down a little over 1.5%, Netflix down 1.8%. Nvidia up a little bit, about 0.5%.

two thirds of 1%. The big losers really were Walmart down 6.5%. Good earnings, but as I've said before, market expectations a bit higher than what really came in. And then the banks, the banks struggled. JP Morgan down 4.5%, Bank of America down 1.5%, Morgan Stanley also down 4.5%, Goldman Sachs nearly 4% as well.

UnitedHealth then 1.7, but outside of that, most other healthcare companies did fairly well. A lot of the drug companies had a bit of

balance. So that was where the strength was in this market for today. It was really in the healthcare space and the consumer non-durables. So consumer staples, think of Philip Morris, Pepsi's of the world. Nike actually did fairly well on the day, Procter and Gamble, et cetera. That's where the strength really lied. And if you look at the other

The dollar was down nearly 1%, 0.8% on the day. Really, this is yen strength. Could this be the start of another yen carry trade online? Potentially. Gold finished up again, 7 tenths of 1%. Bitcoin was up 2.7%. And WTI crude settled up half a percent on the day. So a lot of other assets certainly were stronger than the broad indices and equities as a whole. You had the Fed.

You had the Philadelphia Fed Manufacturing Index that came out 18.1 positive, but down dramatically in the 44.3 in January. You had prices paid were up a little higher than expected. So you had that kind of stagflationary type of economic news on the jobs front.

Initial claims were a bit higher than expected, but you had continuous claims a bit lower than expected and revised downward for the previous month. So the jobs market is kind of hanging in there overall, whereas if you look at, like I said, the manufacturing index, what's happening in the broader economy, demand is starting to wane just a bit. Nothing bad, nothing to show a recession anytime soon.

And credit markets are hanging in there. And so I think what you'll see is markets generally hanging tough in the first half of the year, especially we're hitting that debt ceiling. Okay. And I've said this before. There's called the Treasury General Account. It's basically the checkbook of the Fed. When you hit the debt ceiling, the Fed, even though Doge is in there, maybe preventing some payments to go out.

The vast majority of payments are still going out and they use the Treasury General Account to spend out of when they issue those checks. And so when the debt ceiling hits, they can no longer issue more debt to fill up that checkbook, their checking account, the TGA.

And so there's money going out of the system, but no money being pulled out of the system via debt issuance. And so that is net positive for liquidity. So as long as the debt ceiling fight goes on, that's actually net positive for asset prices. So we talked about today a little weakness.

But the backdrop still remains relatively positive and relatively robust in really the first half of this year. You get into the second half, things could change. But right now, things are just kind of hanging in there. You're seeing some market rotation and it's becoming more of a stock picker's market right now. Now let's pivot over to a question that came in via the comment section on our YouTube channel.

AD-CY7WX, I don't know who that is, but says, thanks for reviewing my portfolio by Luke last week. Happy client. I guess he's a client. Talked to Luke last week. If you can, I have a large position of the WPC. I'm in the red in share appreciation over the past six years. It's had a good run in this past week. It's solely a long-term income producing position. Thoughts on this diversifying holding reposition over the next decade. Any warning signs? One day I'll just admit your portfolio beats mine.

that I still manage and turn it all over to you guys. Well, we're excited for that day. But in the meantime, happy to help. And this happens with clients. Some clients want to hold on to a small percentage of their portfolio and kind of do their own thing. And this is WP Carey. Now, historically, WP Carey has been a good performer. It is a global REIT. This is down pretty dramatically from its 2021.

2019 high, excuse me, around 91. It fell during COVID, rallied back to about 87, 88. And that range fell recent lows in late last year, right around 50-ish. And now we're at 61. It's had a really nice rally, actually, over the past couple of weeks going from about 55 here to about 61.

So you've had a nice little rally, about 12, 13% over the past couple of weeks. Nice little bounce back. Now, what does WP Carey do? Let me pull this up. One of my other systems. This is a fairly large REIT, $13 billion market cap, manages 1,555 commercial properties, both domestically and internationally. And that's the interesting thing with WP Carey. And as the

As the commenter mentioned, it's well diversified. It's not just focused on one subset in the REIT space. It has office properties, industrial properties, warehouse and retail facilities around the world. So it is very well diversified.

I think one of the reasons you're down is duration risk. It's a bond proxy. REITs in general are bond proxies. And so if you get rates rising dramatically, that's going to hurt any type of bond proxy. It's also going to hurt companies that have debt on the balance sheet, which WP Carey does. It has $8 billion in long-term debt and a $13 billion market cap. That's not atypical for a REIT. But like I said, it's a well-run REIT.

So I wouldn't be in a hurry to get out of it. The only issue to me is that does have those office does have office exposure around the world. And it varies depending on the

region of how strong the work from home drive is, what downward pressure there is on rents, et cetera. So that's probably my biggest issue. But as a diversified REITs, I think it's definitely one of the better ones in the world. So I would continue to hold it as long as you understand that it's a bond proxy at the end of the day. And if rates do continue to go up, it will find some pressure to the downside. But near term, I think it's fine.

Now we're moving into a break, second break of the day, but still to come. My main focus point on health care costs and how to get those lower and more answers to your voice bank questions. Those questions drive this show. So don't hesitate. Your call will be first. We'll get to those voice bank questions, but if you call, you get to the front of the line. So don't hesitate to call me right now at 888-99-CHART.

Got a question for Justin or Luke? You're the best person to ask it. Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stocks? InvestTalk is ready 24-7. I would really appreciate if you could give me an entry point for a company called Medtronic MDT. Call InvestTalk, 888-99-CHART, or post your questions on the InvestTalk YouTube channel.

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2025 rolls on and you might have some fresh questions for Justin or Luke. Call InvestTalk 888-99-CHART.

Now we're a handful of weeks into the new year, but it is never too late to start thinking about health care costs. It's one of the main drivers of bankruptcy in this country. Unfortunately, probably a lot of the reasons why a lot of people want a public option to resolve that. But until then, you have to be prepared. So you avoid unexpected bills and things that can

really derail your financial picture. And your healthcare costs overall continue to rise faster than inflation. And so the more you're exposed to that, the bigger bite of inflation will take out of your investments and your nest egg.

Now, how do you keep health care costs down in the year ahead? First is obviously get covered through your work. 164.7 million Americans get covered by their work, but 21 million Americans get covered through the federal healthcare.gov portal. So make sure you head over there. That's the simple thing. And then it's about understanding whether your provider is a network.

So just because it was in network last year doesn't mean that they're going to be in network this year either. So you want to double check. And you can usually do that on your health insurance company's website. And this is very important because the cost can be dramatically different. And so you don't want to be blindsided that, oh, I spent this much last year. And then suddenly it goes up, you know, sometimes three, four, five fold if you're out of network in the next year.

Now, what's great is that there is something called the no surprise law, and it took effect in 2022. What this does is it limits when you are in emergency situations, when your doctor might be in network, but you get, for example, an anesthesiologist that's out of network, and then you're charged dramatically for the anesthesiologist when you had no real connection.

say in that, right? You're just blindsided by some practitioner that is working on you that is out of network. So that's the good thing. But it's very often that the insured actually bills you in the wrong way, overbills you, or even denies you coverage. And you can appeal. You're entitled to appeal. Just because you get that bill doesn't mean that's set in stone. So don't think that you

have no recourse or any actions you can take to stop it. You do. It's called the appeal and don't hesitate to use it. Next is review your medication. Once again, this is because it's covered one year. Doesn't mean it's going to be covered the same amount next year. Now there is some government pressure for these PBMs, pharmacy benefit managers that are raising insulin prices and

driving out cheaper generics in order to make more money so the good thing is there's some political pressure here but you always want to check with your pharmacist in the new year if your prescriptions remain covered now the good news is for Medicare patients you have a new two thousand dollar annual cap of out-of-pocket prescription drug costs this is because of the inflation reduction act

And it was mainly to target cancer patients saying, you know, if you have cancer, you know, a lot of those cancer drugs are extremely expensive. You're on Medicare that's capped at $2,000 annually. So that's a good thing. But make sure you check those costs. And then lastly, look at your deductible and how much that might change from year to year, because you might keep the same plan, but the deductible can change. And a lot of people will focus on silver plans, cheaper plans.

But you really have to align your healthcare needs with what's covered. And once again, that changes every year. It's kind of like the tax code. You know, the tax code can change from year to year. And you need to kind of stay up to speed on those changes. Now this is InvestTalk. Let's pivot back to your questions from 888-99-CHART.

Hi, guys. Big time listener here. My name is Niamh. I'm from Boston. And I have a question about GILAT, tickle symbol G-I-L-T. I already have this company in my portfolio, thinking to add more. Please let me know what you think. Thank you so much for what you're doing. Really appreciate everything. Thank you. All right. Looking at G-I-L-T. This is an Israeli satellite company. And for...

Many years it was losing money, went profitable in 2021, and now it's supposed to earn 56 cents this year after earning 49 cents last year, and then 75 cents next year. This has been a rallying nicely. Its relative strength now is 94, but at 75 cents per share in earnings next year, out of $7.69 stock, it's about a 10 forward PE. That's pretty reasonable.

One thing I do like about this is it's foreign. A lot of foreign names are undervalued. They're starting to rally. And this has a great balance sheet, good valuation. Enterprise value to EBIT is around 12, very cheap. And the chart is good. I have no issue with it. Momentum's good. Valuation's good. Trends and earnings are good. I like it. This is Galat Satellite Systems, G-I-L-E.

Now, the next InvestTalk, we'll look into this topic. Warren Buffett stocks. What's insider Berkshire Hathaway's portfolio? That story tomorrow. But for now, I'm Justin Klein. I'm ready to take your calls now on 888-99-SHARP.

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Hey, Justin and Luke. This is Frank from Los Angeles, a long-time listener of the show. Thanks for all you guys do. I have a question about senior living and skilled nursing facilities slash streets. I was reading an article online and an analyst was arguing that the Doge and the new Trump administration and agenda may have an impact on these streets, especially senior

those that derive a larger percentage of the revenues from tenants that are reimbursed through Medicaid and Medicare, which is, I think, a fair argument, although I don't fully understand the full extent of it. What do you guys think about it, and how would you look at this space in general? And second question, I was down looking at a specific name.

which is Omega Healthcare Investors, OHI. Seems a good name in the space with a good dividend, fair valuation level, but I wonder what you guys think of it. Thanks a lot for all you guys do again, and I'll be listening on the show. Well, let me speak on the nursing home industry as a whole. Now, first off, there's been a bit of overcapacity built out.

uh part of its anticipating baby baby regeneration as well as the medicare reimbursements as you said and if doge comes in and tries to cut those reimbursements obviously that will impact this industry dramatically so there's certainly some risk there that may be why uh ohi omega health care investors like you asked has been down so dramatically well

dramatically for REITs down from 44 back in October to about 46 and change today. Now, part of that are rates rising. You know, we've said that before. Higher rates means pressure to the downside for REITs in general. Now, Omega is one of the better run health care REITs that are out there. OK, and it primarily focuses on long term care facilities. But

there is that risk there. Now, could this be overblown? Could those cuts be minor or not material? Absolutely. But that does throw a little extra wrench in the risk factor here. Definitely more than normal. So if you want to invest in the long-term care facility business, then Omega is, like I said, one of the better run ones out there. Return on equity around 10%.

That's pretty high for a REIT, to be honest with you. So I like this one, but I don't love the space because that overhang of supply as well as potential changes to Medicare reimbursements. But I would keep it on my watch list for potential turnaround. I just don't see that happening in the short, short term. So I'd be patient on it. Thanks for the call. Now let's talk a little bit about stagflation. Now this is something, this is the buzzword in the 70s.

And it really took down markets in a big, big way. And this was talked about in 2022 that we're going to have stagflation. And we did for a short period of time. And you saw equities correct dramatically in that time period. Inflation, depending on your metric, went into high single digits, 8%, 9% or so, where the economy was growing, but at 2%, 3%. And that is a stark difference.

Stagflation is really when the economy is growing below trend and inflation is persistently above trend. And that happened for a handful of quarters around the 2022 timeframe. Now, right now, you're starting to see inflation reaccelerate. CPI is around 3% and it's likely to continue to accelerate really through the year, more towards the back half of the year than the first half of the year. But so far,

Inflation is actually reporting higher than we were expecting for this time in the year. And then you have the tariffs that could pile on to this inflationary problem. And then you have potential deportation. Deportations are a shock to supply, supply of labor. Tariffs are a shock to supply, which is the ability to economically import supply from abroad.

And both of those are supply issues. So many people focus on demand, but supply is equally as important in the supply-demand curve to determine price. And that's what inflation is, looking at prices. Now, in the 70s, the supply shock was in oil, right? The oil, around oil embargo, et cetera. So these are different catalysts for stagflation, but they are certainly potential catalysts for stagflation.

So I think the upside potential surprise of inflation is certainly there and I think is growing by the day. Now, then you have to marry it with an economy that is growing below trend. It doesn't have to be negative, but if you're inflation at 4%, 5%, 6%, but the economy is growing at 1% or 2%, that's not a great environment for risk assets for just investors as a whole and the economy as a whole.

And so that part is less likely for a couple of reasons, because the consumer and the corporate balance sheets are relatively strong. Consumers have ton of equity in their homes. They have mortgage rates locked in 3% for the vast majority of them. Unemployment rates remains relatively low. Most consumers are in a very good position to maintain their lifestyle and their spending. Now, some of them are

dipping into credit cards a little bit more, but it's from a very low level. Delinquencies on credit cards and mortgages are going up, but once again, from a very low level. So that's not really an issue. So consumers will likely continue to spend. Now corporations, a lot of them have termed out their debt at very low levels back in 2020, 2021, and 2022. But now a lot of them are going to start to refinance later this year and into next year. And that's where I think the risk to the economy would be, that those higher debt costs suddenly

cause corporations to lay off workers. And then that creates more of a snowball effect. But once again, that doesn't really happen until later this year and into next year. So while stagflation is an increasing risk, it's not a near-term risk in my mind because you're going to still have growth and inflation hovering around the same level, 2%, 3% or so. It's when they start to diverge

And there's a clear difference where inflation is materially higher than economic growth. That's where you get a 2022 scenario where the Fed has to get more hawkish and that feeds into economic growth and the downside, the cost of capital goes up, et cetera, and you get a 2022 scenario. So it's on the radar. It's a risk that's out there, but it's not a near, near-term risk. It's more of a medium-term risk in my mind.

Now let's keep moving and get back to a fresh question from the comments section over on our YouTube channel. Lawrence Myers says, "I have held BBY for just over a year, so it's now long-term gains. Is it time to sell or is it a hold at these prices?" Looking at Best Buy, Best Buy, I was actually in a Best Buy yesterday. For everyone out there, we're actually moving into new KPP Financials, moving to new office. So I had to go there and get some equipment for the new office. But we actually own this for clients. We've owned it for...

over a year now, and it's been an uptrend. It bottomed back in late 2023, around $62 per share. Hit a recent high, a little over $100 per share, but now it's pulled back to around 90 and change at the close today. Earnings have come back down from a high of $10 per share in 2022.

but still earning about $6.18 this year. It's supposed to be $6.59 next year and puts you at a mid-teens multiple. So lower than market average. But if you look at other factors like profitability, like their balance sheet, it is, I don't want to say glistening, but it's looking very good. Return on equity, 42%, very high. Not down from the 2021 high of 61%, but 42% is very,

Gangbusters knocking out of the park. Return on invested capital, 30%, also knocking out of the park. And next, the no debt on its balance sheet. Dividend yield 4% with a payout ratio of only 63%, so some room for that to go up. Free cash flow of about a billion dollars, which puts it at about a 5% free cash flow yield. And what are they doing with that cash flow besides paying out a dividend? Well, they're taking that and they're buying back shares.

So good stewards of capital, good business. It's kind of one of those things. It's like the Philip Morris. I would say, you know, long term, the cigarette companies have been great businesses. Why? Because who wants to get into it into a cigarette company? You know, especially after the late 70s, we realized that cigarettes really bad for you.

Nobody. They kind of left a duopoly between, you know, RJ Reynolds and Philip Morris. And, you know, nobody really wanted to get in the cigarette business. And so they just kind of printed money. And I see the same thing kind of here with Best Buy. Who wants to compete with Amazon and open a brick and mortar electronics company or electronic retailer? I don't see a lot of new ones like that coming out.

So they're kind of the dominant player within the space. And that's why they have this high profitability. Then you have the geek squad on top of it. Where do you go to get your TVs hung and electronic help? They're kind of the one that's out there. And so that's why we own Best Buy. I would continue to hold it. Like I said, it's pulled back.

from about 100 to 90, but it's still in a very good position and a long-term uptrend, good business, buying back shares, paying a dividend, et cetera. So, still like Best Buy. Now the InvestTalk Voice Bank never closes, and that's a good thing. So let's play another listener question from 88899 Shark. - Hi there, Duncan from New York. Thank you for all that you do. I'm calling on stock ticker Kelly Partners Group Holdings, KPGHF.

I know that this is an Australian stock. This was actually in part of my growth portfolio emails. What they are saying is that EBITDA was up 13% to $17 million, representing a margin of 28%. Return on equity for quarter one was 37%, and return on invested capital was 22%.

I tried to triple check it. I looked on Fidelity Brokerage. I don't really see any information, just like a chart of it too. But I was looking to hope to see about your information. I think the sector is industrials and it is a microcrap. So I'm looking for this as a long-term part of my growth portfolio. Very small position in it. Thank you very much and looking forward to telling me what you think. Bye.

Okay, this is Kelly Partners Group, $386 million market cap. So it's an accounting firm. Like you said, it's out of Australia. These foreign names are always, I always go to a different place.

data provider that gets a little better information, laid out less well than some of my other data sources. But that's why it takes me a minute. But this operates an accounting business. It's just small and medium sized businesses. And it does say sector industrials, but I think it's more financial. It's a CPA that helps with wealth management activities, accounting, taxation, audit, et cetera.

it's certainly in a nice uptrend uh let me take a look here at yeah i mean the trends are very good like you said it's australian name markup about 584 million dollars trying to get the data i hate these it's always new ways to lay this out i mean the trends are good i have no issue with with with this uh name to be honest with you i like the foreign exposure i'm starting to really like foreign exposure the dollar is starting to weaken and

yeah everyone's talking about the dominance of u.s stocks and so far this year foreign stocks are doing much better and everyone's allocated to the mag 7. everyone's in love with them and usually when i think there was even a recent i think it was economist or barons about how the dominance of america and usually that is a mark of of a turning point so

I like the foreign exposure here. I like the growth. I love the business. These are the type of businesses that are typically very healthy and strong and consistent. So I'm going to give Kelly Partners a thumbs up. Now, are you ready for this market change? As I said, starting to see outperformance in parts of the market that haven't done very well. Starting to wake up. The better value parts of the market are starting to outperform.

And so serious investors need to adjust their thinking in this inflationary environment. Like I said, inflation is likely to continue to accelerate into the back half of the year.

That likely means a Fed that shifts their policy to more hawkish stance, liquidity potentially drying up. And if you need help understanding whether your portfolio is exposed positively or negatively to those trends, don't hesitate to reach out to investhawk.com, schedule a portfolio review with me or Luke via Zoom, and we can go over your portfolio, your broad financial life, start to set out a plan that tells you where you'll be in 5, 10, 15 years based on your spending habits and your investing habits.

your savings habits, et cetera. All of this is vital for you to reach financial success. If you're just making a decision here, buying the stock and doing these random things here or there, you don't have a plan. You're just shuffling around in the dark. And our job on these is to shed some light on your situation. So don't hesitate to head over to investtalk.com. But give me a call now at 888-99-CHART.

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Now let's fit in one more listener question today from our YouTube channel. And Joey Lombardi 12 says question. I currently hold a small allocation of bond ETFs, BND and BNDX in my portfolio for diversification. At 38, does it make sense to continue holding them or would it be better to cut my losses and explore other investment options in this space? Well, the first, the simple answer is it depends.

Depends on what type of risk you have in your portfolio and you're willing to take. You said it's a small allocation. Small is relative. Are you talking about 2%, 5%, 15%? What does small mean? Now, I'll tell you about these individually. These are just bond ETFs. One is the Vanguard Total International Bond ETFs. That's BNDX. And then BND is the U.S. Total Bond Market ETF. Now, with the U.S. one, you're going to get a lot of

treasuries in there but you also have duration risk effective duration is 8.3 years bndx effective duration is 8.7 years so a little bit longer and that's my big issue is the duration risk here so i would sell them now the question is do you put them into other bonds with shorter duration is what my first change i would make if you want to keep it in bonds once again the issue here is the long duration that's why you're down probably so

If you want to keep the same risk profile, just lower your duration risk with an ETF or individual bond with much lower duration than eight years. Or you're 38, you have plenty of room, plenty of time before you probably need this money. I would take more risk with it.

Now I have to do look at your other portfolio, the rest of your portfolio. If you want to do a portfolio review with me, these are the things that we talk about. What does it make sense to do? What is your risk number of this entire portfolio? Is that 50? Is it 60? Is it 75? And what is your risk tolerance level? How much volatility are you willing to take? Do those things align? So these questions are always difficult without more context. So I encourage you to schedule a portfolio review.

Now, lastly, let's talk a bit about tariffs again. And Trump said on Wednesday that he will announce fresh tariffs not on imported cars or semiconductors or pharmaceutical companies or some pharmaceuticals, but lumber and forest products. And this is where the pressure to the downside in on the home builders is really coming from. This is a big problem.

And now it also could be opportunity, right? That this is just bluster. It's his way to get some sort of concessions. And this is just a minor blip for these home builders. And they bounce back. But I get the feeling that he's serious. And that's why I would be a bit weary of some of these home builders.

And why you're seeing underneath the surface and markets more volatility. As I said, I think I said it on Tuesday, on the surface of the markets, things are calm. But underneath the surface, there's a lot of volatility because of this tariff situation. So don't be shocked. But know that a lot of times that volatility can mean opportunity. And in many instances, this whole bluster around tariffs will mean opportunity.

but there will be ones that really take a much bigger dive than they already have around new policy. Now that could mean around RFK and HHS and the pharmaceutical names and healthcare drug companies and health insurance companies. It could also mean in the industrial space,

Auto companies, semiconductors like NVIDIA. NVIDIA is kind of whistling past the graveyard. What if there are 20% or 5% tariffs on imports from Taiwan, for example? What does that do to TSMC? So understand that as this year goes on, as tariffs become more of a reality than just talk, there is more risk creeping into the markets. Well, that about does it. I'm Justin Klein with another InvestTalk program.

We appreciate you tuning in and liking and subscribing to our YouTube channel. You head over there and you can get your podcast anytime at iTunes, Spotify, Google Play. Be sure to rate and review on iTunes as well. Remember, we can help you better understand your full financial picture as well as your portfolio risk and aligning that with your risk tolerance level and aligning it with the current trends in market by heading over to investstock.com and scheduling a portfolio review with me or Luke.

Independent thinking should success. This is InvestTalk. Good night. InvestTalk is a trademark of KPP Financial. Because of the nature of the interactive dialogue inherent in the format of this program, it's important for the listener to understand that not all comments made will apply to them. Specifically, nothing said shall be taken to be investment advice.

or shall statements on this program be considered an offer to buy or sell security? Because such advice is rendered solely on an individual basis and at times will require that the investor review a prospectus before investing. InvestTalk is a copyrighted program of Klein, Pavlis, and Peasley Financial, a registered investment advisor firm which retains all rights. For more information regarding KPP's investment advisors, call 1-800-557-5461.

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