New Jersey Business Beat with Raven Santana
Investing your money in 2021
2/20/2021 | 26m 46sVideo has Closed Captions
Rhonda Schaffler talks to Wall Street experts about investment trends and cryptocurrency.
This week - Rhonda Schaffler talks to financial analysts and Wall Street experts about the sudden spike in retail investing, changes coming to retirement investing and what you need to know if you want to dip your toe into cryptocurrency. Plus - Rhonda breaks down the major headlines of the week, including how Governor Murphy's budget proposal could impact New Jersey's business community.
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New Jersey Business Beat with Raven Santana is a local public television program presented by NJ PBS
New Jersey Business Beat with Raven Santana
Investing your money in 2021
2/20/2021 | 26m 46sVideo has Closed Captions
This week - Rhonda Schaffler talks to financial analysts and Wall Street experts about the sudden spike in retail investing, changes coming to retirement investing and what you need to know if you want to dip your toe into cryptocurrency. Plus - Rhonda breaks down the major headlines of the week, including how Governor Murphy's budget proposal could impact New Jersey's business community.
Problems playing video? | Closed Captioning Feedback
How to Watch New Jersey Business Beat with Raven Santana
New Jersey Business Beat with Raven Santana is available to stream on pbs.org and the free PBS App, available on iPhone, Apple TV, Android TV, Android smartphones, Amazon Fire TV, Amazon Fire Tablet, Roku, Samsung Smart TV, and Vizio.
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>>> THIS WEEK ON "NJ BUSINESS BEAT," BUILDING THE BUDGET, WITH HE BREAK DOWN GOVERNOR MURPHY'S POTENTIAL BUDGET GOALS AND WHAT THEY MEAN FOR THE BUSINESS COMMUNITY.
>>> PLUS, THE BIPARTISAN PLAN TO PUMP HUNDREDS OF MILLIONS OF DOLLARS INTO SUPPORTING NEW JERSEY'S SMALL BUSINESSES.
>>> AND WE'RE PUTTING INVESTING IN FOCUS, FROM RETAIL TO RETIREMENT TO CRYPTO, WE TAKE A DEEP DIVE INTO SAFE EFFECTIVE WAYS TO NAVIGATE YOUR INVESTMENT IN 2021.
THAT'S AHEAD ON "NJ BUSINESS BEAT."
♪♪ ♪♪ >>> THIS IS "NJ BUSINESS BEAT" WITH RHONDA SCHAFFLER.
>> HELLO, I'M RHONDA SCHAFFLER.
THANKS FOR JOINING US ON "NJ BUSINESS BEAT."
IF YOU'RE WATCHING ON YOUTUBE, MAKE SURE YOU SUBSCRIBE TO OUR NJ SPOTLIGHT NEWS YOUTUBE CHANNEL TO GET ALERTED WHEN WE POST NEW EPISODES AND CLIPS.
WE BEGIN THIS WEEK WITH A QUESTION.
WILL GOVERNOR MURPHY'S SOON TO BE RELEASED BUDGET INCLUDE HIGHER TAXES?
ONE NEW JERSEY BUSINESS LEADER SAY THERE BETTER NOT BE.
THE PRESIDENT AND CEO OF THE NEW JERSEY BUSINESS AND INDUSTRY ASSOCIATION SAYS THERE IS NO JUSTIFICATION FOR ANY TAX INCREASES THIS YEAR.
SHE TOLD ME WHAT SHE HOPES TO HEAR WHEN GOVERNOR MURPHY DELIVERS HIS BUDGET ADDRESS NEXT WEEK.
>> MICHELLE, YOU HAVE A MESSAGE TO GOVERNOR MURPHY AHEAD OF HIS BUDGET ADDRESS.
IT IS A MESSAGE THAT YOU HAVE REPEATED BEFORE, BUT THIS YEAR I THINK YOU'RE GOING TO BE A LITTLE BIT LOUDER WITH IT.
>> WE ARE INDEED.
OUR MESSAGE IS AVOID TAX INCREASES, HOLD THE LINE ON UNNECESSARY SPENDING AND INCLUDE MEANINGFUL STRUCTURAL REFORMS, WHICH WE'VE BEEN ASKING FOR FOR YEARS IF NOT DECADES, RHONDA.
>> WHAT IS THE FEAR IN TERMS OF TAXES, THAT TAXES WILL BE RAISED OR THAT ADDITIONAL FEES MIGHT BE IMPOSED?
>> WELL, WE ALWAYS HAVE A FEAR ON BOTH BECAUSE, LET'S REMEMBER, WHEN OUR ECONOMY WAS PERFORMING WE RAISED TAXES, WHEN OUR ECONOMY IS CHALLENGED WE RAIDS TAXES.
WE DON'T HAVE A YEAR THAT WE DON'T RAISE TAXES.
EVERY YEAR WE GO INTO THIS CYCLE BEING CONCERNED ABOUT THE FEAR OF REVENUE AND TAXES BEING RAISED.
SO LET ME JUST GIVE YOU AN EXAMPLE.
REVENUE WAS PROJECTED TO BE NEGATIVE 4.4% OF GROWTH FOR THIS FISCAL YEAR.
IN FACT, IT IS PERFORMING PLUS 4%, WHICH MEANS WE HAVE AN 8% SWING IN REVENUE TO THE BENEFIT OF NEW JERSEY'S ECONOMY.
NO REASON TO RAISE TAXES WHEN WE'RE OVERPERFORMING.
>> THERE HAVE BEEN, I GUESS, SOME NIBBLES AROUND THE EDGES FROM THE PROGRESS REPORT.
THERE'S LEGISLATION ON SHARED SERVICES, FOR INSTANCE, THAT IS MAKING SOME GROUND IN TRENTON, BUT WHY HASN'T THIS BEEN MORE OF A FOCUS ESPECIALLY NOW?
>> IT'S A GREAT QUESTION.
YOU KNOW, THE PATH FOR PROGRESS HAS SO MANY EXTRAORDINARY OPPORTUNITIES IN IT THAT HAVE REAL MEANINGFUL REFORM FOR THE STATE OF NEW JERSEY.
LET'S REMEMBER AS WE CAME INTO THE NEW YEAR THE SENATE PRESIDENT SAID THAT THIS IS A PRIORITY FOR HIM AND THE GOVERNOR HAS CONCURRED.
NOW WE NEED TO HOLD HIM ACCOUNTABLE EVEN IN AN ELECTION YEAR TO ADDRESS THE ISSUE OF REFORM FOR THE STATE OF NEW JERSEY.
>> OBVIOUSLY THIS HAS BEEN COMPLETELY INSANE YEAR GIVEN WHAT'S HAPPENED TO THE ECONOMY WITH COVID.
DO YOU GIVE THE ADMINISTRATION ANY SLACK ON THAT FRONT?
>> IT WAS AN UNPRECEDENTED YEAR, BUT DESPITE THE CHALLENGES THAT WE HAD, WE SAW THAT WE COULD HAVE PRESENTED A BUDGET FOR THIS FISCAL YEAR THAT WAS MORE REALISTIC RELATIVE TO THE REVENUE THAT WE WERE ANTICIPATING BECAUSE OF THE NEW TAXES THAT WERE IN THERE, AND WE DO BELIEVE THAT THE REVENUE WAS UNDERPROJECTED, THAT'S WHY EVERYTHING IS OVERPERFORMING RIGHT NOW AND THAT'S WHY WE'RE SITTING ON A SURPLUS.
>> WHAT IS THE IN YOUR VIEW END GAME WHEN WE SEE THE TAX SITUATION WHERE WE ARE FOR BUSINESSES IN NEW JERSEY?
>> WELL, THE END GAME IS TO USE THAT MONEY NOW AND REINVEST IN NEW JERSEY BUSINESS AT A TIME THAT IS CRITICAL FOR OUR ECONOMY.
SO WHERE CAN WE REINVEST IN THIS NEXT FISCAL YEAR.
ADDITIONAL SMALL BUSINESS GRANT FUNDING, INFRASTRUCTURE, ALWAYS, INFRASTRUCTURE MEANS JOBS, JOBS, JOBS, AND STRONG ECONOMY.
SUPPORTING OUR INNOVATION ECOSYSTEM.
WORKFORCE DEVELOPMENT.
I MEAN, LET'S THINK ABOUT ALL THE FOLKS THAT HAVE TO BE UPSKILLED AND RETOLD IN A POST-COVID WORLD, EVEN IN A COVID WORLD.
WE SEE GAPS IN SKILL AND WE HAVE DISPLACED WORKERS WHO ARE GOING TO NEED SKILL SETS TO COME BACK INTO THE ECONOMY.
>> WHAT IS THE OPTION IF A TAX INCREASE OCCURS AGAIN FOR BUSINESSES?
HOW MUCH IS THERE LEFT TO TAKE?
>> THERE IS NOTHING LEFT TO TAKE.
THERE IS NOTHING LEFT TO TAKE.
WE CONTINUE TO BE AN EXTREMELY LARGE OUTMIGRATION STATE.
WE SEE WEALTH LEAVE THIS STATE EVERY DAY.
LOOK, WE ARE 31% LESS SMALL BUSINESSES IN THE STATE OF NEW JERSEY AS WE SIT HERE TODAY THAN JANUARY OF 2020.
31% LESS BUSINESSES ACROSS THE STATE OF NEW JERSEY.
NOW IS THE TIME TO THROW A LIFELINE, NOT TO PUT MORE WATER IN THE SINKING SHIP.
>> MICHELLE, GOOD TO TALK TO YOU AGAIN.
THANK YOU.
>> RHONDA, THANK YOU SO MUCH.
>>> SOME STATE LAWMAKERS ARE SAYING IT'S TIME TO DO MORE FOR BUSINESSES, A LOT MORE.
THEY WANT THE STATE TO PROVIDE $300 MILLION IN GRANTS AND LOANS TO SMALL BUSINESSES AND NONPROFITS.
I SPOKE WITH TWO OF THE LAWMAKERS BEHIND THE BILL, REPUBLICAN SENATOR OWE SCANLON AND DEMOCRATIC SENATOR GOPAL.
IT'S GREAT TO TALK TO YOU BOTH ABOUT THIS LEGISLATION THAT MIGHT MAKE A HUGE DIFFERENCE FOR SMALL BUSINESSES IN THE STATE.
SENATOR SO HE SCANLON, WHY WAS THE TIMING RIGHT FOR A PIECE OF LEGISLATION LIKE THIS?
>> IT'S BEEN RIGHT.
WE SHOULD HAVE DONE SOMETHING OF THIS SIZE MAYBE ONCE OR TWICE BEFORE.
WE HAVE A HUGE SURPLUS, THE GOVERNOR UNDERESTIMATED OUR REVENUES BY AROUND A BILLION DOLLARS AND OUR SMALL BUSINESSES ARE STRUGGLING AND IT'S IN EVERYBODY'S BEST INTEREST TO MAKE SURE WE GET THEM THROUGH THIS, YOU KNOW, HORRIFIC TIME IN THEIR EXISTENCE.
WHY IS THAT IMPORTANT?
IF WE LET THEM FAIL, IT WILL BE YEARS BEFORE OUR ECONOMY CAN GET BACK UP TO SCALE.
IF WE SAVE THEM WE WILL SAVE THE LIVELIHOODS OF PEOPLE THAT OWN THESE BUSINESSES, WE WILL SAVE TENS OF THOUSANDS OF JOBS, OUR ECONOMY CAN COME ROARING BACK, BUT WE HAVE TO BE THERE FOR THEM.
>> SENATOR GOPAL, WILL BUSINESSES FAIL IF THIS BUSINESS DOESN'T GET APPROVED?
>> SMALL BUSINESSES ARE ALREADY FAILING.
I HAVE SMALL BUSINESSES AROUND MY DISTRICT THAT ARE IF NOT PRESIDENT HAVEN'T SHUT DOWN IN RECENT MONTHS ARE ON THE VERGE OF IT.
THEY NEED HELP AS THE SENATOR SAID.
A LOT OF THIS IS ALMOST ALL OF IT IS NO FAULT OF ANY ONE OF THESE BUSINESS OWNERS AND I THINK THESE SMALL MOM AND POP'S EMPLOY SO MANY OF OUR LOCAL RESIDENTS AND THEY ARE THE BACKBONE OF OUR ECONOMIES, THEY ARE A PART OF OUR CULTURE, OF OUR TOWNS HERE IN MONMOUTH COUNTY AND I THINK THAT WE NEED TO GET THEM HELP AND WE NEED TO BE THERE.
WE CAN'T CONSTANTLY -- TOO OFTEN WE SEE FEDERAL AND STATE GOVERNMENT LOOKING OUT FOR CORPORATIONS AND FEDERAL AND LARGE INTEREST.
THIS IS NOW WE NEED TO LOOK OUT FOR MAIN STREET AND I THINK THAT'S WHAT THIS BILL DOES.
>> I SPOKE WITH TOM BRACKEN WHO LEADS THE CHAMBER OF COMMERCE EARLIER TODAY AND HE SAID WHY NOT $400 MILLION?
SO MY QUESTION FOR YOU IS IS THAT $300 MILLION FIGURE SET IN STONE OR IS IT POSSIBLE THAT THERE COULD BE EVEN A LARGER PIECE OF LEGISLATION.
>> I'D LIKE TO SEE IT LARGE BUT WE HAVE TO SEE WHAT THE FEDERAL GOVERNMENT DOES, WHAT THE C.A.R.E.S.
MONEY ENDS UP BEING, WHAT THE PACKAGE IS FOR COUNTY AND LOCAL GOVERNMENTS.
I'M JUST GRATEFUL TO SEE WHAT EVERYONE IS COMMITTED TO MAKING SURE WE SUPPORT OUR SMALL BUSINESSES.
I BELIEVE, YOU KNOW, WE COULD END UP AT A HIGHER NUMBER, BUT THE $300 MILLION IS CERTAINLY A GOOD DEAL TO HELP A LOT OF SMALL BUSINESSES.
HOPE FLEA WE WILL HAVE MORE CLARITY ONCE WE SEE WHAT THE FEDERAL GOVERNMENT IS DOING.
>> SENATOR, HOW IMPORTANT WAS IT THAT THIS IS A BIPARTISAN EFFORT THAT BOTH REPUBLICANS AND SENATORS IN NEW JERSEY SAW THE NEED TO REALLY WORK TOGETHER ON THIS?
>> IT'S VALUABLE.
WHENEVER YOU HAVE A BIPARTISAN EFFORT, LEGISLATION IS MADE BETTER.
WE ALL HAVE OUR PERSPECTIVES AND THIS WAS A TRUE BIPARTISAN EFFORT, I APPLAUD SENATOR SWEENEY, SENATOR GOPAL AND STAFF ON BOTH SIDES.
IT WAS REALLY -- IT'S GOVERNMENT FUNCTIONING THE WAY IT SHOULD.
IT'S A SUBSTANTIAL PACKAGE, BUT IT'S LEAN AS WELL.
I HEAR TOM BRACKEN WANTING MORE, WE'LL SEE.
WE'LL SEE AS C.A.R.E.S.
ACT FUNDS COME AND WE WILL SEE HOW OUR ECONOMY BOUNCES BACK.
BUT THIS IS REALLY SUBSTANTIAL AND, AGAIN, WITH THE BIPARTISAN EFFORT OF BRINGING THE TLERN HOLD UP TO 50 EMPLOYEES WAS A BIG DEAL AND WORKED OUT REALLY, REALLY WELL.
AGAIN, THIS IS GOVERNMENT FUNCTIONING AS WE ALL HOPE IT WILL.
>> SENATORS, I WANT TO THANK YOU BOTH FOR YOUR TIME.
I REALLY APPRECIATE IT.
>> THANK YOU.
>> THANK YOU.
>>> THE HEAD OF THE NEW JERSEY CHAMBER OF COMMERCE, TOM BRACKEN, SAYS THE BILL DOESN'T SOLVE ALL THE PROBLEMS BUSINESSES ARE FACING, BUT IT WILL PREVENT SOME FROM CLOSING THEIR DOORS FOR GOOD.
>> THE WHOLE POINT HERE IS TO HAVE ENOUGH WORKING CAPITAL AVAILABLE FOR THE BUSINESS COMMUNITY TO GET THROUGH TO A POINT WHEN RECOVERY STARTS, REVENUES CAN BE GENERATED WHICH WILL GENERATE, KNEW, KIND OF ORGANIC CASH FLOW.
IF THE -- IT'S A STOPGAP, BUT IT'S VERY MUCH NEEDED BECAUSE THERE'S STILL A CONSIDERABLE PAIN OUT THERE AND PEOPLE DO NOT HAVE THE FINANCIAL WHEREWITHAL TO GET THROUGH THE NEXT COUPLE OF MONTHS.
>> BRACKEN IS A MEMBER OF NJT B'S BOARD OF TRUSTEES.
>>> NEW JERSEY HAS TO FIGURE OUT HOW TO GET THROUGH THIS CURRENT SLUMP WHILE ALSO LOOKING AHEAD TO WHAT THE STATE'S FUTURE ECONOMY WILL LOOK LIKE.
THE MURPHY ADMINISTRATION WANTS TO CREATE WHAT'S BEING CALLED THE NEW JERSEY COUNCIL ON THE GREEN ECONOMY, ONE OF THE COUNCIL'S BIG TASKS WILL BE TO ACCELERATE THE GROWTH OF GREEN JOBS AND TO TRAIN WORKERS FOR CAREERS IN THIS NEW GREEN ECONOMY.
I ASKED ANTHONY RUSSO THE PRESIDENT OF THE COMMERCE AND INDUSTRY ASSOCIATION OF NEW JERSEY WHETHER THE COUNCIL CAN MAKE GOOD ON THAT PROMISE.
>> ABSOLUTELY.
I MEAN, YOU LOOK AT THE SOLAR INDUSTRY, IT'S BEEN ROBUST FOR ABOUT 20 YEARS.
MANY JOBS CREATED IN THAT INDUSTRY, MANY MORE TO COME.
OBVIOUSLY WITH THE WINDS EFFORT THERE'S GOING TO BE ADDITIONAL JOBS THAT ARE CREATED, SO THE SHORT ANSWER IS YES, WHENEVER THERE'S A SHIFT LIKE THIS TO WHATEVER IT IS IN THE ECONOMY WE'RE CONFIDENT THAT THOSE JOBS WILL FOLLOW.
>> MEMBERS OF CONGRESS ARE ABOUT TO GET BACK TO WORK ON LEGISLATION THEY BELIEVE WILL HELP CREATE JOBS AND PROVIDE HELP FOR THOSE STILL LOOKING FOR WORK.
THE PROPOSED $1.9 TRILLION COVID RELIEF PACKAGE IS EXPECTED TO INCLUDE A $1400 STIMULUS PAYMENT TO ELIGIBLE TAXPAYERS.
SOME WILL OF COURSE USE THAT MONEY TO PAY BILLS, OTHERS WILL SAVE IT, AND THERE ARE THOSE WHO FIND THEMSELVES IN THE FORTUNATE FINANCIAL SITUATION TO CONTEMPLATE INVESTING THAT MONEY IN THE STOCK MARKET.
WE'RE PUTTING SAVINGS AND INVESTMENT IN FOCUS THIS WEEK.
THE STOCK MARKET WAS THE SUBJECT OF A HEARING ON CAPITOL HILL A FEW DAYS AGO.
LAWMAKERS WERE TRYING TO MAKE SENSE OF THE RECENT STOCK TRADING FRENZY IN SHARES OF VIDEO GAME RETAILER GAMESTOP WHICH WAS FUELED IN PART BY SOCIAL MEDIA AND IS NOW THE SUBJECT OF A FEDERAL INVESTIGATION INTO POSSIBLE MARKET MANIPULATION.
THERE ARE IMPORTANT LESSONS LEARNED FROM THAT EPISODE.
ACCORDING TO SHARIF MOHAMMED WHO IS CEO OF UNLIMITED FINANCIAL SERVICES BASED IN SOMERSET.
>> SHARIF, YOU LIKE A LOT OF PEOPLE WERE FOLLOWING ALL THESE HEADLINES ABOUT GAMESTOP, REALLY AN UNBELIEVABLE STORY.
WHAT HAVE WE LEARNED FROM THAT WHOLE INCIDENT ABOUT THE STATE OF RETAIL INVESTING RIGHT NOW?
>> THANK YOU FOR THAT QUESTION.
IT'S FUNNY THAT YOU ASK.
THERE WAS A BOOK THAT I READ BY TOM NICHOLS BACK IN 2018 WHICH IS TITLED "THE DEATH OF -- AND SPEAKS ABOUT A GROWING -- WHERE DUE TO TECHNOLOGY, THE INTERNET, THE ACCESS OF PEOPLE TO INFORMATION BUT NOT NECESSARILY KNOWLEDGE YOU HAVE A GROWING THOUGHT IN THE MASSES THAT THEY HAVE MORE INFORMATION THAN SOME EXPERTS OR THEY OUTRIGHT REJECT EXPERTS MORE OFTEN THAN NOT."
I THINK THAT IT'S A DANGEROUS PATH THAT WE'RE GOING ON BECAUSE, AGAIN, THE GROUP HAVING THE GAIN THAT THEY HAD IS A GREAT THING AND I THINK IT'S A POSITIVE THING IN THE MARKETPLACE FOR PEOPLE TO, YOU KNOW, HAVE THAT -- THAT, I GUESS, SAVVY TO IDENTIFY CERTAIN SITUATIONS IN THE MARKETPLACE, GET TOGETHER AS A GROUP AND ENRICHING THEMSELVES, BUT WE HAVE TO THINK ABOUT YOUR NORMAL EVERY DAY EN INVESTOR.
THE PEOPLE WHO ARE INVESTING IN 401(k)s, THE PEOPLE WHO ARE INVESTING IN COLLEGE FOR THEIR KIDS, THEY HAVE TO HAVE CERTAIN, YOU KNOW, BELIEFS THAT THE MARKETS WILL ACT -- AND WHEN WE SEE INEFFICIENCIES LIKE THIS THAT CREATE, YOU KNOW, PAYOUT IN THIS CASE PRICES WENT UP, BUT IT COULD JUST AS EASILY BE A SITUATION WHERE PRICES GO DOWN.
THAT CAN LEAD TO, YOU KNOW, WIDESPREAD LACK OF FAITH IN THE MARKET AND THAT'S NOT NECESSARILY GOOD.
>> WOW, YOU MADE A LOT OF REALLY EXCELLENT POINTS THERE.
I WANT TO TOUCH ON KIND OF THE AVERAGE PERSON WHO IS INVESTING IN THE MARKET, THEY'RE TRYING TO PLAN THEIR RETIREMENT, TRYING TO PLAN THEIR KIDS' COLLEGE EDUCATION.
LISTEN, IT CAN BE VERY SCARY WHEN YOU SEE VOLATILITY IN THE MARKETS.
DOES THE GAMESTOP STORY INDICATE THAT WE NEED MORE PROTECTION FOR THE AVERAGE INVESTOR?
>> I WOULDN'T SAY THAT'S THE CASE, BUT WE NEED TO MAKE SURE WE UNDERSTAND THE -- I GUESS, WHAT IS THE END GAME OF SUCH ACTIVITY BECAUSE, AGAIN, WHEN IT'S ALL SAID AND DONE, YOU KNOW, GAMESTOP ISN'T NECESSARILY IN A BETTER PLACE, YOU KNOW, THE AMCs OF THE WORLD IS NOT NECESSARILY IN A BETTER PLACE.
AND THE LAST THING WE WANT TO -- THE LAST MESSAGE WE WANT TO SEND TO THE EVERY DAY INVESTOR IS THAT -- THAT, YOU KNOW, SPECULATION IS A GOOD THING.
WE WANT TO MAKE SURE THAT PEOPLE UNDERSTAND THAT, YOU KNOW, SOMETIMES IT'S THE TORTOISE THAT STILL WINS THE RACE AND, YOU KNOW, BEING CONSISTENT AND INVESTING SLOWLY AND CONSISTENTLY OVER TIME IS, YOU KNOW, THE BEST WAY TO ACHIEVE ONE'S GOALS.
>> DO YOU THINK AT THIS POINT AND IT KIND OF CIRCLES BACK TO GAMESTOP A LITTLE BIT, HAVE WE SEEN THE DEMOCRATIZATION OF WALL STREET IN TERMS OF RETAIL INVESTORS BEING ABLE TO PARTICIPATE IN SOMETHING THAT PERHAPS THEIR PARENTS OR GRANDPARENTS WOULD HAVE NEVER THOUGHT OF?
>> I THINK IT'S A POSITIVE THING THAT, YOU KNOW, APPS LIKE ROBINHOOD, STASH, ARE TAKING IT EASIER FOR THE INVESTING PUBLIC TO GET INVOLVED IN THE MARKETPLACE.
I DO BELIEVE THAT OVER THE LONG RUN STOCKS TEND TO BE THE BEST INVESTMENTS OUT THERE IN TERMS OF PERFORMANCE, BUT I DEFINITELY THINK THAT THERE NEEDS TO BE CHECK MARKS IN A SENSE THAT WHEN WE'RE DEALING WITH THINGS LIKE OPTIONS AND MARGIN TRADING THAT, YOU KNOW, WE NEED TO MAKE SURE THAT PEOPLE ARE EDUCATED AND THAT THEY KNOW WHAT THEY'RE DOING.
>> THANK YOU SO MUCH.
I REALLY APPRECIATE YOUR THOUGHTS ON THIS.
>> MY PLEASURE.
THANK YOU SO MUCH FOR HAVING ME.
>>> STOCK MARKET CAN BE RISKY BUT THAT'S HOW MANY INVESTORS SAVE FOR RETIREMENT.
MAYBE THAT'S STILL ON YOUR TO-DO LIST BUT YOU ARE NOT SURE WHERE OR HOW TO BEGIN.
WE ASKED KEN MAHONEY THE CEO OF MAHONEY ASSET MANAGEMENT HOW TO GET STARTED.
>> KEN, IT'S GREAT TO TALK TO YOU, THANKS FOR YOUR TIME.
>> THANKS, RHONDA.
GREAT TO BE HERE.
>> YOU KNOW, SAVING FOR RETIREMENT IS ONE OF THOSE THINGS THAT YOU KNOW YOU'RE SUPPOSED TO DO, BUT SOMETIMES GETTING STARTED IT'S VERY HARD.
IT'S HARD TO TAKE THAT FIRST STEP.
WHAT ADVICE DO YOU GIVE TO PEOPLE WHO KNOW THEY SHOULD BE TRYING TO SQUIRREL AWAY SOME MONEY BUT HAVE TROUBLE GETTING STARTED?
>> LOOK, I THINK THE BEST WAY TO GET STARTED IS THROUGH YOUR COMPANY PLAN.
I'M ASSUMING YOUR COMPANY HAS A PLAN, A 401(k) PLAN, FOR-PROFIT COMPANIES, A PLAN FOR NOT FOR PROFIT COMPANIES AND PAYROLL DEDUCTION.
A LITTLE BIT AT A TIME IS THAT FOR PEOPLE THAT DON'T HAVE A PLAN THROUGH THEIR COMPANY, SHOULD THEY IMMEDIATELY THINK ABOUT OPENING AN IRA OR JUST TRYING TO TAKE ACTION ON THEIR OWN?
>> YEAH, IF YOU DON'T HAVE A COMPANY PLAN THE NEXT BEST STEP IS AN IRA, YOU CAN YOU CAN PUT MONEY AWAY, IT'S PRETAX.
BY PUTTING AWAY FOR RETIREMENT, PUTTING AWAY DOLLARS YOU'RE GETTING DEDUCTION IN THE MONEY YOU'RE PAYING FOR TAXES.
IF YOU DON'T HAVE A 401(k) PLAN, YOU CAN SET UP AN IRA, GO INTO A LOCAL BANK AND SET THAT UP.
YOU CAN DO IT ON A MONTHLY BASIS, YOU CAN DIRECT SOME MONEY COMING OUT OF YOUR PAYCHECK -- I'M SORRY, COMING OUT OF YOUR CHECKING ACCOUNT EVERY SO OFTEN, BUILDING UP YOUR IRA OVER TIME IF YOU DON'T HAVE A PLAN AT WORK.
>> CAN YOU EXPLAIN HOW MONEY WILL GROW WITH INTEREST WHEN IT'S PARKED IN ONE OF THESE INVESTMENT VEHICLES?
>> WELL, ALBERT EINSTEIN SAID -- HE WAS A PRETTY BRIGHT GUY -- HE SAID THE EIGHTH WONDER OF THE WORLD IS COMPOUND INTEREST.
THAT SHOULD TELL US SOMETHING.
I GUESS MY ADVICE WOULD BE TRY TO THINK FROM THE END.
WHAT WOULD THAT LOOK LIKE DOWN THE ROAD?
VISUALIZE THAT NUMBER.
BIG NUMBER, $200,000, $300,000 BUT YOU HAVE TO GET STARTED TODAY.
>> THE ONE THING THAT GETS PEOPLE NERVOUS IS WHAT HAPPENS WITH THE STOCK MARKET, RIGHT?
YOU WILL HAVE THE MARKET GOING ALONG JUST FINE, SUDDENLY THERE IS A HUGE SELLOFF, PEOPLE GET VERY NERVOUS WHEN THEY SEE THEIR ACCOUNTS DWINDLE AT LEAST FOR A PERIOD.
HOW DO YOU COMFORT PEOPLE AND GET PEOPLE USED TO THE IDEA OF RISK?
>> RIGHT.
SO YOU THINK ABOUT LAST MARCH THE DOW WENT FROM 29,000 TO 18,000, 11,000 POINTS DROP AND PEOPLE SAW THEIR STATEMENT, SOME PEOPLE STOPPED MAKING CONTRIBUTIONS, SOME PEOPLE GOT VERY NERVOUS.
LOOK, THIS IS NOT AN EASY GAME.
THE STOCK MARKET IS LIKE A BRONCO WANTS TO KNOCK YOU OUT AT ALL TIMES BUT YOU HAVE TO HAVE THE FORTITUDE THAT THIS IS A 10 YEAR OR 20 YEAR PROGRAM OR 30 YEARS AND THAT THIS SHORT-TERM NOISE OVER TIME THE MARKET HAS DONE WELL.
NOW, TO YOUR POINT THE MARKET HAS AVERAGED ABOUT 7% PER YEAR, THE PROBLEM RHONDA, IT DOESN'T GO 7, 7, 7, IT GOES UP 19.2, DOWN 22.1 AND GIVES YOU A LOT OF TIME FOR THE BRONCO TO KNOCK YOU OFF.
IF YOU HAVE A LONG TERM PLAN THE MONTHS WHEN THE MARKET IS DONE, THINK OF OTHER SIDE OF IT, YOU'RE BUYING SHARES AT A CHEAPER PRICE.
>> WHAT DO YOU THINK IS THE BIGGEST SURPRISE THAT YOUR CLIENTS HAVE ONCE THEY START ACTUALLY SAVING FOR RETIREMENT AND LEARNING MORE ABOUT THE PROCESS?
>> IT'S ACTUALLY A GOOD SURPRISE, RHONDA, THEY'RE SURPRISED HOW QUICKLY THAT MONEY CAN GROW.
WOW, I'VE BEEN PUTTING IT IN FOR FOUR YEARS I NOW HAVE $40,000.
PEOPLE ARE MORE SURPRISED HOW QUICKLY IT CAN GROW BY THE COMPOUNDING, BY PUTTING AWAY A FIXED DOLLAR AMOUNT EACH MONTH, TWICE A MONTH WHEN YOU GET PAID, BUT I THINK THEY'RE SURPRISED HOW QUICKLY MONEY CAN GROW AND THAT ENCOURAGES THEM TO PUT MORE MONEY AWAY AND, AGAIN, IT'S A NICE VICIOUS -- NOT VICIOUS, VIVACIOUS CYCLE OF GOOD FEEDBACK LOOP, SEEING THE POSITIVE RESULTS AND THEN INCREASING THE AMOUNT YOU'RE GOING TO CONTRIBUTE WHEN YOU START TO SEE THE RESULTS.
>> KEN, GOOD TO TALK TO YOU.
THANK YOU SO MUCH.
>> THANK YOU.
>>> ONE BIG STRUGGLE FOR NOVICE INVESTORS AND EVEN MORE EXPERIENCED INVESTORS IS UNDERSTANDING THE FINANCIAL MARKET.
IT'S COMPLICATED.
AND JUST WHEN YOU THINK YOU MAY HAVE FIGURED THINGS OUT YOU START READING HEADLINES ABOUT BITCOIN, A CRYPTOCURRENCY PRICED ABOVE $50,000 THIS WEEK.
IS THAT A BUBBLE?
WHY ARE COMPANIES LIKE TESLA USING CRYPTOCURRENCY?
WHAT ARE BIT COINS ANYWAY?
WE TURN TO WALL STREET EXPERT NICK CULLIS OF DATA TREK FOR SOME ANSWERS.
NICK, YOU WERE ONE OF THE PEOPLE ON WALL STREET THAT VERY EARLY ON STARTED TALKING ABOUT BITCOIN AND PAYING ATTENTION TO IT.
HOW DO YOU EXPLAIN THIS METEORIC RISE WE'VE SEEN IN THE LAST COUPLE OF WEEKS?
>> I TELL YOU BITCOIN HAS ALWAYS BEEN A VERY VOLATILE ASSET.
IT WAS THAT WAY IN 2017 AND THEN IT KIND OF WENT AWAY FOR A WHILE AND NOW IT'S CLEARLY BACK.
I SAY THAT THE ISSUE WE HAVE HERE IS IT'S A VERY FIXED SUPPLY OF BITCOIN.
THE ALGORITHM ONLY ADDS A FEW BIT COINS EVERY FEW MINUTES SO YOU CAN'T CREATE MORE OF IT AND THAT'S ITS INHERENT APPEAL, BUT WHEN YOU GET A FLOOD OF DEMAND THERE IS NO SUPPLY THAT COMES IN TO OFFSET IT SO YOU SEE A LOT OF PRICE VOLATILITY AS WE'VE SEEN TO THE UPSIDE OVER THE COURSE OF THE PAST COUPLE WEEKS.
>> THE FACT THAT WE'VE SEEN TESLA AND SOME OTHER BIG NAMED COMPANIES CONSIDER OR SAY THAT BITCOIN WOULD BE ACCEPTABLE AS CURRENCY, I MEAN, IS BITCOIN HAVING ITS DAY NOW?
>> IT IS BEGINNING TO HAVE A DAY FOR SURE.
THERE'S ALWAYS BEEN THIS DISCUSSION OF WHETHER BITCOIN IS A CURRENCY OR IS THIS KIND OF DIGITAL GOLD OR IS IT SOMETHING IN BETWEEN?
THAT STORY IS NOT YET WRITTEN, WE DON'T KNOW WHAT IT'S GOING TO BE BUT PEOPLE LIKE ELON MUSK AT TESLA FEEL LIKE IT COULD BE A CURRENCY AND ARE HAPPY TO TAKE IT IN EXCHANGE FOR A PHYSICAL PRODUCT LIKE THEIR CARS.
WE'RE IN A TRANSITION BETWEEN IT BEING A NOVELTY FIRST, THEN PERHAPS DIGITAL GOLD AND MORPHING INTO A CURRENCY OVER TIME.
>> SAY YOU WERE EDUCATING YOUR GRAD MOTHER ABOUT WHAT BITCOIN S THERE SEEMS THERE IS NO CLEAR SENSE OF WHAT IT OFFICIALLY SHOULD BE.
HOW DO YOU EXPLAIN IT TO THE LAYPERSON?
>> YOU KNOW, TO SOMEBODY WHO IS GETTING INTERESTED IN IT AND REALLY WANTS TO UNDERSTAND IT AT ITS MOST BASIC LEVEL IT'S TWO THINGS, IT IS BASICALLY ELECTRONIC CASH, BUT NOT LIKE THE DOLLARS YOU HAVE IN YOUR PAYPAL ACCOUNT OR ON YOUR STARBUCKS CARD, IT SITS TOTALLY OUTSIDE THE BANKING SYSTEM GLOBALLY.
IT'S ITS OWN THING.
IF YOU CAN IMAGINE IT BITCOIN HAS NEVER BEEN HACKED.
WALLETS HAVE BEEN HACKED BUT THINK ABOUT A SYSTEM THAT'S NEVER BEEN HACKED.
IT HAS RUN NONSTOP FOR OVER A DECADE AND NEVER STEPPED A FOOT OUT OF LINE.
IT'S AN INTERESTING CROSS BETWEEN A TECHNOLOGY THAT CANNOT BE HACKED AND SOME KIND OF CURRENCY WE ARE STILL TRYING TO FIGURE OUT.
IT IS CONFUSING, NO DOUBT ABOUT IT, BUT IT IS SOMETHING IMPORTANT AND INTERESTING AND I THINK WE'LL STILL BE TALKING ABOUT IT AGAIN IN TEN MORE YEARS.
>> YOU KNOW, ANYTIME YOU SEE ANY SORT OF ASSET PRICED REALLY INFLATE PEOPLE START ASKING IS THAT A BUBBLE, IS IT DANGEROUS.
SO I WILL POSE THAT QUESTION TO YOU.
IS BITCOIN IN A BUBBLE?
>> IN THE SHORT TERM IT CERTAINLY FEELS LIKE IT.
YOU KNOW, I GAUGE A BUBBLE NOT SO MUCH BY WHAT SOMETHING IS WORTH VERSUS WHAT THE MARKET SAYS IT'S WORTH IS HOW QUICKLY IT GOES UP IN PRICE.
BY THAT MEASURE THIS QUICK RISE WE HAVE HAD DOES FEEL LIKE SOMETHING THAT'S UNSUSTAINABLE.
WE DO HAVE TO THINK ABOUT IT IN TERMS OF WHO IS ENDORSING IT, WHO IS USING IT, TESLA, ELON MUSK IMPORTANT TO THE UPSIDE BUT IT DOES FEEL UNCOMFORTABLY HIGH HERE.
IT'S NOT TO SAY IT'S GOING TO GO DOWN TO ZERO, I DON'T BELIEVE THAT AT ALL, BUT IF I WERE THINKING ABOUT IT AS AN INVESTMENT I CERTAINLY WOULDN'T BE PUTTING IN A LOT OF MONEY RIGHT AWAY, I WOULD BE DOING WHAT WALL STREET CALLS SCALING IN, BUYING A LITTLE BIT EVERY MONTH AND DOLLAR COST AVERAGING INTO A POSITION ONE MIGHT BE INTERESTED IN IN HAVING OVER THE LONG TERM.
>> AS SOMEBODY WHO IS REALLY WATCHED BITCOIN FOR SO LONG AND AS I MENTIONED YOU WERE REALLY VERY EARLY ON IN TALKING ABOUT IT, WHAT KIND OF INTRIGUES YOU ABOUT IT RIGHT NOW?
>> IT IS A FASCINATING TECHNOLOGY AT THE END OF THE DAY, THAT'S WHAT FASCINATED ME AND THAT'S WHAT IT WAS ENGINEERED TO DO.
IT WAS ENGINEERED TO CREATE A MONETARY SYSTEM OUTSIDE OF ANY CENTRAL BANK IN THE WORLD.
TOTALLY ON ITS OWN AND BUILT ONLY ON THE TRUST AND COMPUTING AND IN COMPUTER ALGORITHMS.
I THOUGHT THAT'S A NEAT AND INTERESTING CASE STUDY, WHAT DRIVES TRUST IN HUMAN NATURE.
WHAT LEVEL OF TRUST DO WE APPLY TO TECHNOLOGY.
AND WHAT'S HAPPENED OVER THE LAST TEN YEARS, IT'S EARNED A LEVEL OF TRUST BECAUSE THE TECHNOLOGY IS INCREDIBLY ROBUST.
SO THAT'S WHAT WE SEE TODAY.
THAT'S WHY IT'S 50,000 INSTEAD OF $2.
PEOPLE TRUST THIS TECHNOLOGY AND THAT'S A REALLY INTERESTING AND I THINK NEAT CASE STUDY IN WHAT MAKES MONEY MONEY.
IT'S TRUST.
>> IT'S BEEN GREAT TO CATCH UP WITH YOU AGAIN.
THANK YOU SO MUCH.
>> THANK YOU.
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