America's Economic Paradox: Wealthy Spending Surge Meets Rising Credit Card Debt
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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 Monday, March 3rd, 2025 edition of InvestTalk. Yes, the first trading day of March was...

quite the doozy and we'll dig into the details a little bit later but as usual this show is here to help you become a better investor to now help you navigate these complex times and seek out opportunities and avoid the pitfalls and more and more

As each year passes, more pitfalls present themselves. And our goal is to keep you your eyes wide open and abreast of the risk and rewards that are out there in markets and help distill reality and the facts on the ground versus hyperbole and headlines that don't mean much.

So that's what this hour will be dedicated to, which is answering your finance and investment questions and helping you take that next step in your own journey to financial freedom. Now, in just a bit, we'll talk about today's market performance and run down the show topics. But as usual, we'll tackle this caller question first.

Yeah. Hey, Luke. Hey, Justin. Yeah, I'm just calling to find out about Valero. I've held it for a while, and I'm wondering if I should sell it and take profits. I've had it for about four years. Thanks a lot for all you do. You have a great show, and I appreciate all the help you give us. I appreciate your help. Thank you very much. Bye. No problem. Thanks for the call. Looking at Valero Energy.

And this is one of the largest refineries in the country. $40 billion market cap. They do about $30 billion in sales every single quarter. But...

Their profits are waning. They made $29 plus per share in 2022, then down to $25 in 2023, and last year all the way down to $8.44. And this year earnings are supposed to drop again to $7.71.

Now, with that big drop in earnings, you actually haven't seen a massive drop in the stock price. In fact, it's up 30% from its two-week high, which seems like a lot, but it's still well above its lows from 2020 when it was around, what was that, $35, $40? Now it's at $128. So it's in a downtrend. Real strength is 27, definitely low, but not a catastrophe.

And analysts do continue to lower their estimates going forward. And one thing I don't like about Valero, even though it's historically pretty profitable, but the profitability just vacillates dramatically because of what's called the crack spread. And that is basically the profit that you get from buying raw oil and refining it into diesel and gasoline and petrochemicals, etc. And

That's why I'm not a huge fan of it. Valero's free cash flow did peak out around $13 billion. Now it's at about $5.7 billion. On a $50 billion market cap or enterprise value, that's about a 10% free cash flow yield, so that's good. However, return on equity is only 9%. The crack spread does not look like it's improving anytime soon. And a lot just depends on your time horizon here.

I am not optimistic that crack spread will turn around in the short term. And so I do think this will continue to head lower. But overall, it's a good business. It's just a very volatile business. And you need to be prepared for that. So no volatility is likely ahead, especially in the short term. And if you can see through that, then you might want to hold on to it. But

For me, I think there are better opportunities, at least in the market today. And that's probably why I would let go of it. Keep on your watch list. See if things turn around on the crack spread front and you start seeing some upgrades to earnings estimates. That's when I would probably want to own Valero.

Thanks for the call. Now, right here at the start of the podcast, let me tell you that we are excited to announce our second annual InvestTalk Market Madness competition. That's right. You could win $1,000 by showcasing your investment skills. Here's how it works. All you have to do is head over to our website and look for the Market Madness competition.

competition page and you should see a prompt there and you fill it out you pick your matchups there's there's a 32 matchup 64 teams and we're going to have various rounds and that starts i believe on the or the 18th remember correctly yeah the 18th will be the first day of those matchups and the person who most accurately predicts

The winners as this tournament goes along, well, you win the $1,000 prize. You can head over to investtalk.com and find more details. Registration does close on March 17th. So go sign up.

Now, we've got a lot of ground to cover over the next 45 minutes or so. And here's some of what we have planned time permitting. And my main focus point is about how the American economy is a bit of a paradox. Wealthy spending continues to surge, even though credit card debt also continues to surge. So we'll talk about kind of this K shaped economy that we are in and what is

What is keeping the economy afloat for the short term? So we'll look at that. I also have some other questions that need to be answered. One is analysts. Analysts, are they good at their job? Meaning if you follow what analysts do and say, excuse me, what do they say? Buy, hold, sell, et cetera. Will that make you more money? Are these analysts good to follow? Should you put any credence in what they say?

Well, S&P Capital IQ actually did this study over the past 20 plus years, and we'll look at that data. In addition, tips, Treasury inflation protected securities, the yields are at multiyear highs. And so we'll look at what they are, how you should think about tips as part of your portfolio or the pros and cons, et cetera. And then lastly, if we have time,

Talk about how a lot of capital is huddled into the US stock market and especially the Mag 7. Is it a bubble? Not just domestically, but globally. So we'll look at that story as well if we have time. We're heading to a short break. Actually, we'll also get to some questions, voice bank questions. One is on Palantir and the other is on developed markets, ETFs, as well as some questions that came in via our comment section over on our YouTube channel.

And of course, we welcome your live calls, 4 to 5 Pacific time at 888-99-CHART. And we're going to head into a short break right now. And on the other side, I will unpack today's market activity and play more of your questions here on InvestTalk.

InvestTalk is made better when listeners add their voices. My name is Robert, and I'm from Florida. Great show. I learned so much from just listening to you. Hi, this is Susan from New Jersey. I'm calling about AXOA. How much of the information that came out today on the whole AI play with DeepSeek and all that, how much of that information can you really trust?

And Justin Klein and Luke Guerrero are always ready to provide unbiased answers. I am very much a person that does not trust Chinese data. Net income is growing and margins are staying pretty steady. Let's go take a live call. Paul from Palm Desert. Let's go to George from San Mateo who has a question about index funds. Tell your friends, live a little, live a little. Call InvestTalk weekdays from 4 to 5 p.m. Pacific time.

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Now let's go take a look at the market today. It was a decidedly red day overall and that had almost entirely to do with what looks to be implementation of Trump tariffs on both Mexico, Canada, and an increasing amount of tariffs on China going from 10% to 20%.

And that created a decidedly, once again, a risk off day. You had the, I don't have the numbers on the major indices, but you had Nvidia down 8.6% on the day that really led the market to the downside. And here we go. Yeah, Dow was down 1.5%, NASDAQ down 1.75%. And

sorry that was sp down one and three quarters percent s&p was down 2.6 on the day once again nvidia down nearly nine percent apple continues to be the strongest of the max seven but did still have it down day about one and a half percent amazon down 3.4 tesla down nearly three percent continues its weakness and microsoft google meta all down around two percent as well you had some sell-offs in some of the

Big banks as well. JP Morgan down one and a half. Morgan Stanley down 3%. Wells Fargo down about one and a half. American Express nearly two. Really strength continued in healthcare, consumer staples, as well as utilities. And some of the telecom companies, Verizon, AT&T, T-Mobile, those all were strong. But the rest were negative, especially in energy, because you did have OPEC look like they're increasing production starting in April 2020.

So that weighed on oil prices overall. And a lot of the industrial space continued to be weak on top of that because of these new tariffs. So clearly the market is not liking what the Trump administration is doing. I talked about this before, how it's really an order of operation. You know, they want to extend the tax cuts,

But that is not really on the table at the current time. Right. There's not really much discussion about that. It's more about, you know, ending the Ukraine war. It's about the tariffs. It's about the budget, about Doge, right, cutting more spending. And that is obviously a drag on the economy. So from an order of operations standpoint, the Trump administration is not going in the right direction.

Now, maybe that's because they need to get through this other stuff before they get to the more stimulative impact of potentially industrial policy or tax cuts, etc. But right now, that is nowhere being discussed.

And the market is not a big fan of that. And there's a lot of crowded trades. We know the MAG-7 is very crowded. And this rollover in them, I think, is just the beginning. There's so much money that needs to come out of these trades. And I don't see a catalyst besides Trump reversing these tariffs that could spin these MAG-7 names back into a bullish trade scenario.

And now Trump is notoriously volatile in his rhetoric, in his actions. You know, he talks about tariffs one day and, hey, it has a good conversation with somebody. And suddenly those tariffs are put on hold and gone.

That's the case for a lot of different topics. And so, you know, I've said before, I said this a couple of weeks ago, I'm starting to get more bearish on the market, not outright bearish that we're going to go into a large crash or anything like that. But, you know, the market was overbought. It was due for a pullback and it just needed a catalyst, frankly. And so this is certainly a catalyst that will will bring growth.

I think sentiment back in line and you could potentially get a good buying opportunity over the next two or three months. But near term, I don't see any major...

Support that is going to prevent us from continue to slide probably until we get to the 200 day moving average on the S&P, which is to what that's at. The 200 day is down around 5700 on the S&P. Today we closed around 5850. So, you know, that's.

The 3% or 4% down from here would not shock me before we get some sort of durable bounce. And the fact that that rally on Friday was sold off again continues to put the current market trend bearish.

So no real sign of a turnaround quite yet, but I'll keep you posted. Now we're moving into a short break still to come. My focus point, more answers to your questions and our YouTube questions as well. And maybe even, and maybe even you can call me. I would love that at 888-99-CHART.

2025 rolls on and you've got finance and investment questions for Justin Klein and Luke Guerrero. Call InvestTalk 888-99-CHART.

Now, my main focus point today is about the broader U.S. economy and the fact that there's a bit of a paradox. We have a very much a K-shaped economy. Some are doing very well, mainly those that own some type of assets, usually homes, stocks, even cryptocurrency, and they're doing well. If you don't own a lot of that, well, then you are likely struggling to some degree.

And that is really a story that our economy is really propped up by a lot of these assets. And official data continues to show that overall, the economy is doing quite well. The top line number is you have relatively low unemployment. Inflation has come down, but still elevated from where we were pre-pandemic, hanging around the 3% level.

but not where we were in a high single digits just a couple of years ago. And what the data is saying is that if you make over $150,000 roughly, you're doing most of the spending that's driving the broader economy. But the fact that most of that spending is fueled by a wealth effect of the equity in their homes and stock market returns and so on,

cryptocurrency returns, all of that is vulnerable, right? You see that today or the past couple of weeks, how much of the sell-off and not just equities, but cryptocurrency could suddenly change the sentiment. You're already seeing sentiment wane a bit over the past couple of months. And if that turns and thus the sentiment from the wealthy turn, that will absolutely spin us into a recession.

because if you make less than $73,000 per year, you're kind of already in a recession, despite the fact that most of them have jobs, but they don't have a lot of those assets that have appreciated. And you see this in the delinquency rates. Overall, consumer debt delinquencies are the highest level in nearly five years. Now, one caveat there is that this is from very low levels. Talking about the pandemic,

and massive amounts of stimulus that kind of spun everybody out of much financial stress because they were getting checks from the government there were forbearances on mortgages and student loans etc and just made carrying day-to-day life a lot easier from a financial perspective when you don't have the weight of those uh two types of debts really pushing on the lower income consumers but now the moratorium on a lot of that is up and

people are going to go back to pay those those bills and the share of credit card accounts showing delinquencies of at least 90 days or longer is now over 11 that's the highest level since 2011 okay so you're starting to in some instances get above pre-pandemic norms and that's where i think the worry really lies okay so it's the credit card debt

And the share of active credit cards making just the minimum payment up to the 12-year high, at a 12-year high. And pre-pandemic, the growth in spending was fairly well distributed. But since the pandemic, because of the equity in people's homes, all these asset value increases due to stimulus, it has really driven that K-shaped economy.

and you can see that in fico scores as well the percentage of credit scores now 750 or higher is at a record high and those credit scores 600 or lower is creeping up after many years of decline so laws people are getting checks and once again forbearances they that weren't smart with their money or didn't have enough uh income they're the ones that are sliding once again uh into poor credit

now there's no sign there's an imminent problem here but clearly our economy and the spending around the economy is predicated on equity valuations cryptocurrency valuations staying relatively elevated and i think that's the biggest worry here is that it's so driven by those factors and that's why while the gp now figure is negative i think that's mostly export driven or import driven excuse me

But you certainly could see if you get a larger equity pullback. And that's why I think Trump is playing a fire here is if there's too much volatility, it's going to be hard to spin us back out of this downturn. Now we're moving into a short break and coming up, more answers to your questions. We're going to go talk to Dean from Georgia in just a bit right after this break. But you can call me right now at 888-9UniHR.com.

Invest Talk, 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 Dean from Georgia asking about a 401k rollover. How you doing, Dean? Good. How you doing? Doing great. How can I help you?

Yeah, I kind of had a two-part question. What are your thoughts in terms of, I mean, I've done a 401k rollover until Roth IRA before, but it was a small amount of money. But when you're looking at a six-figure rollover and the tax implications on that, what are your thoughts in terms of, I guess, stomaching the tax on it, but in hopes that it's going to grow taxable?

Well, whenever you're putting money in any type of Roth account, it's always about the tax rate today versus the tax rate in the future. So I'm not sure what your particular tax rate is. Now, you can always roll over your 401k into a traditional IRA, and there is no tax implication from that.

And then a future date, you could do Roth conversions, converting part or all of that, especially in times where maybe you're in a lower tax bracket for a particular reason. Maybe you switch jobs or took a hiatus or you're out of work for a while and you can do you can do those things.

tax those Roth conversions then. A typical good time also is to do it between retirement and taking Social Security that five, six, seven, eight, 10 years, however long it is in that gap. That's a good time to do Roth conversions as well. So if you are unsure, then just throw it into a traditional IRA. It's very simple. We do it all the time.

I got you. And then my next one would be, if you have IRAs and brokerage accounts, what would be your strategy as far as capital gains tax in terms of what would you hold in one versus the other?

That's a great question. It depends on your strategy. Obviously, in a Roth IRA, you want the most upside because if you capture that upside, then you're avoiding a lot of tax. And so I would be looking at my more aggressive portfolio in the Roth IRA, most likely. Right. Okay. Well, thank you so much. I appreciate it. No problem. Thanks for the call.

Let's keep things moving. Get back to a fresh question from the comment section on our InvestTalk YouTube channel. Taylor Mickelson says, I'd love to hear your take on Buckle BKA. I know you said you liked in the past and I just run in 2024. Since that is at about a 20% drop, curious if it's a buying opportunity to increase my position or if you see something fundamentally that has shifted that no longer makes this a good position.

investment all right looking at bke buckle we actually do own this for clients we have owned it for a while and it's you know it's up and it's been up and down but generally in an uptrend it bottomed in 2020 around 14 per share rallied all the way to 57 and then pulled back to around 26 and its recent high though has been around 54 now pulling back into the high 30s

And Buckle historically has just been a very, very strong business. And a couple of things we love about Buckle is just that they usually pay out a pretty strong salary.

quarterly dividend right now it's about 3.6 percent but they pay a lot of special dividends as well because they have such strong cash flow now one of the reasons it's pulled back is earnings are expected to go from 440 last year to 374 this year and

You know, that's not atypical to have the business slow a bit. Now, what do they do? They operate 444 buckle and the buckle men's and women's apparel stores in 42 states. Once again, not a big company, about $2 billion market cap, but great balance sheet, high return on equity, which we really like, and strong cash flow, trying to increase 56%, very, very high.

So it's not the sexiest business, but it's one of the more profitable businesses out there. And so while it has been in a trading range over the past few years, it's paying out hefty dividends because they produce such cash, such strong cash flow, $4.77 per share in free cash flow, which is over a 10% free cash flow yield. So I do think you are into some support here in the high 30s. And I do think it is a good buying opportunity after this pullback.

Thanks for the call. And I'm going to get to one of my talking points in a few minutes, but first let's play another voice bank question.

Hey, guys. Really like the show. Wanted to give you a call and ask you about Palantir Technologies. I was listening to this lady talking about how this particular company may have an edge with government contracts going forward. I know that it's been falling. The ticker symbol is PLTR. I know you get a lot of calls about this stock. Could you write it down for me? If I want it, I don't own it, but if I wanted to buy it, what's a good starting price? Appreciate the show. Thanks. All

All right, looking at Palantir, P-L-T-R is the symbol and pulling up the data real quick. So Palantir has been one of the most hyped companies I've seen in a long time. You know, outside of Tesla, it's probably one of the most overvalued names and it's

It's starting to reverse in a big, big way. It's already down 33% from its 52-week high. Earnings next year are supposed to be 68 cents from 54 cents this year. And it's an $83 stock.

So and the what I don't like about it is the CEO has talked about, you know, how, you know, he kind of plays to the retail crowd and how he's building all this wealth. And it kind of it kind of reminds me of GameStop where they kind of kind of do the same thing.

And instead of and focusing on that part of price appreciation in the stock, as opposed to running a strong business and just focusing on that. And their business is strong. It's good. Revenues are up 36% last quarter, earnings up 75. And they do have some important technology, especially when it comes to cybersecurity and being able to really

dial in their uh countries uh you call it espionage you know digital espionage shall we say and and big data and ai and all of that and there's a lot of buzzwords around it but historically we've seen these buzzwords are a lot of that just buzzwords and if you look at the valuations here it's just egregious enterprise value to ebit is 625 i mean it's crazy price sales around 71

I would say anything over 10 is expensive, over 20 is egregious, and this is at 71. So like I said, it's probably one of the most overvalued names I've ever seen. So it's just a momentum play at this point. Problem is the momentum, like a lot of these big AI plays or just sexy retail plays, it's coming undone. Momentum has...

not completely reversed on pounds here it's still above its 100-day moving average as long as that's the case it's still in a relative uptrend even though it's already down 33 from its high um so you know there's some support if you think it's going to hold then you know you continue with this momentum play but once it breaks that 100 a it's probably headed much much lower so it's extremely speculative it's all about momentum and

that momentum is threatening to break to the downside and i would pass on it i wouldn't be jumping in front of this potential major break now let's talk a little bit about price targets from analysts there are upgrades or downgrades and a lot of people put credence in what these analysts are saying but s p capital iq did a study and they followed the sell side analyst advice and

Basically, the summation is they have no value to investors. What they did was they looked at the summary score of sell-side analysts' recommendations between one and five, measuring how loved or hated they are by analysts, these big bank analysts. What does Morgan Stanley, those Goldman Sachs think about a particular name? And they looked over the last 25 years, and the best-performing stocks were

were in the lowest quartile meaning they were the most unloved by analysts and over the past 24 years if you bought the stocks rated most highly by these analysts and shorted the ones that they hated the most you would have lost money about 30 percent in total over those 24 four years with a lot of volatility now what if analysts are changing their mind though right that's not the absolute value of their their rating you know buy sell hold etc price target all that

what if they upgrade or downgrade right they go from buy to sell or buy to hold or sell to hold or hold the buy etc look over the past 20 years stocks recently upgraded by analysts did not outperform those that were recently downgraded right so not just the average stock but let's look at ones that analysts were more down on versus what analysts were increasingly becoming more positive on and you want to do the opposite

So don't think that these analysts estimates have any predictive value. The only thing that really came out of it that said, okay, there was some value in these figures is the variation in price targets. Meaning if price targets were all over the board, bullish, negative, right? That was not helpful. If analyst price targets were relatively in the same ballpark,

That had some more predictive power. Not great, but definitely better than just raw buyer-sell signals, upgrade or downgrade signals, etc. So what are analysts good for then? What I do think they are good for are earnings estimates because they're looking at the industry as a whole. They are looking at trends within a particular company and they do a pretty good job of figuring out in aggregate what earnings will be next year and the year after.

even though they tend to be wildly optimistic the farther out they go. So that's really all they're good for. And the reason I think that this is the case is because there are so many other factors that go into price movements from liquidity in the broader market, the broader economy. And when they're looking at creating these price targets and being bullish or bearish, they're just looking at market multiples or industry multiples. Are they trading above it or below it? Trends and earnings. But

If the market is already priced in a positive outcome for earnings going forward, then there's just more room to disappoint to the downside and vice versa. And so I get this all the time. Oh, this bank upgraded the stock or change this price target. And it's clear that's not anything you should ever listen to. Now, I've known this for 25 years and we saw conflicts of interest within that industry as well.

right companies uh wanting banks wanting to get their investment bank business so they would you know give them good buy ratings for example and i think in many cases that's still the same today so there are various factors that go into why this is the case but the data is clear ignore completely ignore buy or sell recommendations as well as price targets for stocks let's drop in another caller question from 88899 chart

Hi, my name is Niv from Boston. Now the question regarding developed market ETFs. I'm starting to less and less believe in the US market for the remaining of the 2025, even early 2026 regarding all of the geopolitical uncertainty. And I'm looking for developed markets ETF. If you have any recommendation, that would be great. I know it's kind of vague, but I appreciate any suggestion. Thank you very much.

i've said this before i can't give you recommendations uh there are plenty of other ones out there uh let me look at yeah yeah the vanguard footsie developed markets etf vea that's a simple one you also have efa which is uh europe asia far east that's kind of the the big developed markets that's a that's kind of standard it's kind of the index for foreign markets

And that's one way to gain exposure there. So I wouldn't say, you know, you buy, or I would recommend any of these, but I do recommend broadly more exposure to foreign markets. Maybe it's developed markets. Maybe that's emerging markets. There's a lot of arguments for both, but it's pretty clear that the best values in foreign markets are in those developed markets because, you know, we'll,

Will the shift in foreign policy from the Trump administration, will that change how other countries go out there and think about their economic development, maybe spending more, which will be

Stimulative. We know that. We've seen that over the past few years as governments went out there and spent more, especially the U.S. And that stimulated our economy. And now you're getting a bit of a hangover from that. But there's still, I think, room for these developed markets to really continue to spend and boost their economy because part of it's needed.

from a reform standpoint from a geopolitical standpoint etc so i like that you are thinking about this and developed markets are good places to be at it right now this is invest talk i'm justin klein we have one goal here each and every weekday to help you achieve your own version of financial freedom and our work continues after this final break let's get your questions in right now at 8 8 99 chart

In today's market, more than ever, you need unbiased investing guidance because it can help you achieve financial freedom.

Well, you've come to the right place. InvestTalk. 888-99-CHART. Let's go talk to Richard in Santa Clarita and looking at Prudential. You own it or looking to buy it? I have a little position in it. I was just wondering, in terms of Prudential, I know I've heard you say that insurance companies are boring, but this one, of the last six months, it's

kind of been up and down more down than up uh... it appears like it's primarily financial you know products uh... and i know it's a large large company do you think this is a good by point at this place is this you know terms of long-term uh... environment uh... a good move well

you know it's you're right that it's been down a little bit relative strength around 34 not amazing not terrible

it's certainly not overpriced it's trading at about 10 times earnings going forward now you're right it's very financial products driven life insurance and retirement plans etc but that tends to be a very good business eight billion dollar is in free cash flow and a 40 billion dollar market cap that's nice it's nice that's about a 20 free cash flow yield that's

That's great. Now, what are they doing with that cash flow? They're buying back shares. That's nice. Our earnings this year are supposed to be up 13% from last year to $14.25 and $15.18 next year. So I like that. You get a nice dividend, 4.75% right now. And so I'm overall a fan of Prudential in the financial space. Yeah, it's boring. But in this more...

more volatile economic environment. I think annuities are going to become more attractive to certain people, even though long-term they're poor investments, but that's something that Prudential sells.

Now, one big negative will be if rates do drop significantly. Remember, that's what life insurance or insurance companies do in general is they take their premiums and they go invest it in relatively safe securities like treasuries, corporate bonds, etc. And so if yields come down, that could be detrimental over the short term. But

It's still a very good business, obviously a very well-known brand name. And if you're looking to add foreign, not foreign, finance exposure, financial industry exposure, this is definitely near the top of the list, even though, yeah, it is boring. Right. Okay, great. Well, thank you very much. Thanks for the call. Now, lastly, let's touch a bit on TIPS, Treasury Inflation Protected Securities, and the

These are typically these are these are bonds that go up in value based on the prevailing inflation rate in the economy. And they pay a set interest rate. But then the par that you get back goes up each year.

So like a normal bond, you put $10,000 into that bond. At the end of the maturity, say five years, you get your $10,000 back. In this case, tips, that $10,000 grows. And then when you get that $10,000 back, inflation adjusted in five years, it's going to be a larger dollar amount while you're still getting that yield. So that's how tips work and keep you ahead of the game against inflation.

And so tips yields are now near the highest level in 20 years. Okay. Now, one bad thing about owning tips outright is that that growth every year, $10,000 plus whatever the inflation rate is on top of that.

you actually pay taxes on that amount, that growth, even though you don't actually receive it until the bond matures. So that's one kind of negative. So typically it's good to own these in tax deferred accounts. And you could also own it in an ETF form or mutual fund form where you're not getting that pass through from a tax perspective. So that's one way to consider as well, especially if you don't want to do the legwork to go out there and create a tips bond ladder or anything like that.

Now, who are tips really good for? Now, they sound great, right? Hedge against inflation. And what I would say is they are conservative hedge against inflation. They're aggressive hedge against inflation, which are typically harder assets like gold and silver or equities in general are typically good hedges against inflation. Typically more industrial and basic material and energy type of names. But that is...

That's the way to think about it. It's a conservative hedge against inflation. So if you're younger, probably not the best way to hedge against inflation. But if you're older in retirement, then tips can be a good source of income as well as that inflation hedge. Well, that about does it.

I'm Justin Klein. This is another episode of InvestTalk. I appreciate you tuning in. You can find your podcast episodes anytime at iTunes, Spotify, or Google Play. Be sure to rate and review on iTunes. And remember, our second annual InvestTalk Market Madness competition is underway. So head over to investtalk.com and you could earn $1,000 if you are the winner.

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