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- [00:00]
Ryan Dietrich
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Nicole Lapin
And with access to more than 1,400.
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Ryan Dietrich
Lounges globally through the American Express Global Lounge Collection, including the Centurion Lounge, Can.
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Nicole Lapin
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Ryan Dietrich
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Nicole Lapin
The things I really love about my work is the fact that I can do it from anywhere. And getting a change of scenery can really help inspire creativity in my work. And has once or twice or maybe more cured my writer's block. Being away for work, for fun, or for both is a perfect opportunity to host your space on Airbnb. That way, not only do you get to experience a new part of the world, but you're also making money while you're doing it. And if you think hosting is overwhelming, I have a solve for you. With Airbnb's co host network, it is easier than ever before to host. Now you can hire a high quality local co host to take care of your home and your guests. They can do everything from creating your listing to managing reservations to messaging guests and providing on site support. They can even help with design and styling. Also, by hosting on Airbnb, you can become part of another family's story, maybe even their hero. As you know, I stayed in an Airbnb for months when my house burned down and I truly do not know what I would have done otherwise. So if you've got a secondary property or an extended trip coming up and you need a little help hosting while you're away, you could hire a co host to do the work for you. Find a co host@airbnb.com host. I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand it's time for some money rehab. After some really messy economic headlines for the last month, which has really felt more like a decade, we might actually have some good news ahead. Which is awesome. So to break it down, I'm joined by Ryan Dietrich, the chief market strategist at Carson Group, whose voice you might recognize from his many, many, many features on CNBC. Today, Ryan shares some signs that he's seeing in the market that nearly always indicate there is good news ahead. Yay. And whether this time could be different, Ryan Dietrich, welcome to Money Rehab.
- [02:23]
Ryan Dietrich
Thank you for having me. I'm excited to be here and I hope we have something to talk about. It's been boring out there.
- [02:28]
Nicole Lapin
I wish. I kind of like want a little bit of boring in my life right now. That would be a welcome change.
- [02:34]
Ryan Dietrich
Yeah, I guess with markets, it's not giving it to us, but I hear you. And at least you know, if we would have done this a few weeks ago, we'd have one thing to talk about now. We've got maybe some positive things to talk about. So that's a nice change from that point of view.
- [02:45]
Nicole Lapin
We do. We've been seeing some bullish signals lately, so let's start with an easy one. The s and P500 was up one and a half percent throughout three consecutive days. Okay, S, P, what does history tell us about that? Does. Is that a good indication of momentum?
- [02:59]
Ryan Dietrich
Yeah, we think it is. Now let me start like this. You know, I've done this for, oh gee, over 25 years, I guess. And it feels like every time we start a new bullish phase those first couple days, everybody comes out of the woodwork and says, well, it's just a short covering rally. Well, it's just a bear market rally. It's going to roll over and what we're going to talk about now and maybe even a couple more rare breaths, thrusts that we've seen. So just know the lows are likely in. I mean, that's our base case. And one of them, like you just said, is up three days in a row of one and a half percent. You can have one day, two days of big moves, but to see three is really, really rare. Went back to 1950. It's happened 10 other times, only 10. Six months later, S&P has higher nine out of those 10 times. And a year later, higher 10 out of 10 times. So never lower. A year later, after three straight days of one and a half percent gains and the average returns like up over 20%. Now I'll just layer one more on here. During those three days on the NYSE, more than 70% of all the stocks on the NYSE also were higher. So that's three straight days of a lot of market breath. When I took a look at that, take a wild guess. That's only happened eight times. One year later, this might sound familiar. Higher every single time with well over 20% average return. So there's lots of stuff. Don't ever blindly invest in just one stat or one statistic. People see a lot of the stuff. I Share and say, well, you said this. Well, you have to layer these things on top of each other. But like we're going to talk about here, we really think that there's multiple buying thrusts that we've just recently seen that are not the hallmark of a bear market rally. Not the hallmark of just a bear market. They're the hallmark, honestly of the end of weak phases and likely higher prices and better returns. And I get the headlines, we get the concern, but the market's going to tell us what it wants to do. And honestly, what we've seen is a really positive sign in our view.
- [04:43]
Nicole Lapin
Okay, so we're going to double click on the breath rust business and breath with D because B R, E, A D, T H. But before that you mentioned short covering. If somebody doesn't know what that is, can you just quickly explain that when we turn positive times, people will say, well, those are, you know, people covering their short.
- [05:01]
Ryan Dietrich
Good point. It's usually put it this way, if I hear it, it's like a backhanded compliment to the bulls is the way I view that when I hear that. But you know, most people buy a stock, right? Well, if you buy a stock, someone also on the other side of that had to sell it. And there are something called short sellers, which are people who in essence sell a stock first in, in essence wanting to buy it back at a lower. If you hear someone shorting a stock, that simply means they're betting against it, they want it to go lower. Now there will be a certain time when they can't take it anymore and in the market starts bouncing a little bit, those shorts get scared and they'll cover. In essence, they'll buy back those shares they already sold. So you think about it, that's like more buying pressure. I say it's like a beach ball. You put a beach ball way under the water. Once you let go, it really gets moving. And if there's a lot of bearishness out there and a lot of negative sentiment like we've seen, obviously the last, well, really all year to be honest. But specifically with a lot of the shorts and things, those shorts cover and that can rally the market. Now what I'm getting at, when I say just a short covering rally, the view is that's just a short term bounce like they cover, then you're just going to roll back over. So again, it's kind of like a backhanded compliment to a, to a strong day. So, so again, when we think, you know, all this negativity has been a Positive. But that's what we mean when we say short covering rally.
- [06:19]
Nicole Lapin
Yeah, the beach ball is a good analogy for that one. And so let's talk more about the bread thrust.
- [06:27]
Ryan Dietrich
Hard to say. Yeah.
- [06:28]
Nicole Lapin
And there's a weird one, there's add this one to the mix. It's wig bread thrust, how they do. What the heck is it?
- [06:37]
Ryan Dietrich
Yeah, it's confusing to say. I guess there's a guy, an old school guy and people could google him and look him up. I'd highly recommend it named Marty Zweig or Martin Zweig. A famous trader from a long time ago and he discovered some of this stuff. I mean he discovered this like 40 years ago, right? This wig breadth thrust. We'll keep it real simple, you can google it and look up more details. But he looked at the nyse, so New York Stock Exchange and he looked at how many stocks are going up versus down and we look at a 10 day EMA. Okay. Exponential moving average. And again, keep it simple. What we're looking for and this triggers is extremely oversold conditions. So again, think where we were just a couple weeks ago when this market was getting crushed. And then within a 10 trading day period. So a short time period you go from extremely oversold, most stocks being down to extremely overbought, most stocks being up. That's kind of again maybe that beach ball effect or a pure flush out. Right. If everybody's thinking alike, somebody isn't thinking General Patton. It's like everybody's bearish, everything's terrible. There's only one way to go. We were hearing that on April 8th. April 8th we were hearing that because the market was down 19% from the peak. Everybody was bearish. And then April 9th happened and got some good. I don't know if it was really even that good a news. Got some news on trade. We had a 9% rally and it's kind of been honestly off to the races since then. But the Zweig breadth thrust triggered just recently. Now what does that mean to the listeners? Well again looking at data and I've got data going back really far from our friends over at Ned Davis Research on this. According to ned Davis research, 19 times since World War II the zweig breath thrust is triggered and again it just triggered recently. One year later. Ready? I know it sounds familiar. One year later, higher. 19 times six months later you're higher. Most of the time strong outperformance is consistent. After his wide breath thrust then you lay on top. What we started the conversation with three days in a rope one and a half percent, 70% of the stocks. Higher. You know, we just had a six day rally in the S P 500 where the S P gained 7% over those six days. Okay, that's another one. It's only happened a handful of times. Like 8 times off top of my head, once again, higher. A year later, eight times. When you stack a lot of these, Nicole, on top of each other, not just one by themselves, but on top of each other. With the other things we're going to get into in this conversation, there's a. We're of the opinion the lows are in for this year and the bulls are hopefully going to have some more fun clearly than they had the first four and a half months of this year.
- [09:02]
Nicole Lapin
So net. Net. It's a, it's a very bullish indicator. It's basically saying we're in the final push of this downward trend.
- [09:10]
Ryan Dietrich
Yeah, in essence the downward trend is over. In essence is what it is saying. Yeah, I mean that's, that's kind of what it's saying. You know, on. I GUESS it was April 9th was one of the first big. That was the nine and a half percent gain. Big, huge update. But on April 22nd we had a huge, huge day also in terms of most stocks up, most stocks volume up. So I took a look again. Call us the rule of 89. There were 89% of all the stocks that were up on both of those days and 89 of all the volume they're up on both of those days. When you have two days like that, that close to each other, that extremely strong and that's extremely rare to have that. I found five times we've seen something like that.
- [09:46]
Nicole Lapin
I was gonna guess eight because.
- [09:47]
Ryan Dietrich
Yeah, well, exactly. Yeah, tell me about it now. Tell me about it. But only once did we see something like that and did the market go on to make new lows. Okay. It's very, very rare to see these signals that we're seeing. I can get in the more and I know it's kind of geeky, I understand. But these are the things that move markets. Right. I'm an old school. I, I have a CMT behind my name. Means Chartered Market Technician. Yes, I look at fundamentals. Yes. I look at valuations, look at trade. End of the day. Yeah, yeah. I mean that's how I was brought up. I can, I can talk any game you want to talk. But I think what matters more are buyers and sellers. What is the market doing? What is the, you know, the attitude of the market? What's happening Underneath the surface, what's sentiment telling us? What is momentum telling us? What's the overbought oversold indicators? When you stack those things, those to me are what tend to matter more. I mean, you know, what's the foremost dangerous words? Sir JOHN TEMPLETON this time is different. I get it. This time is different because we've got a, we've got, you know, a Fed that can't cut. We've got potential higher, higher inflation coming because of the tariffs. We've got drama out of Washington. But what we, we don't really know what all that stuff means. I mean, that's the honest answer. We don't really know what that stuff means. What we do know are these signals that I've been talking about are consistent going out in history, going out generations. That again suggests, likely be open to the idea that better times could be ahead. And that's, that's how we're, we manage billions of dollars at the Carson Group, my team does, and that's how we're positioning ourselves. Yes, we're overweight equities coming into this year. Clearly that has not been a fun year. But I know we're going to talk a little more about it. We've been diversified, we've had some other areas, you know, I mean, literally, time we're doing this, Germany's hitting an all time high. It's hard to get super bearish when other parts of the globe are doing well. Yes, the US has struggled, India has struggled. US, India led the last two years. So it kind of gave the baton back and forth. But there's some real positive things that are really taking place and I get the headlines. But listen, we're about making money and there are still some positives out there.
- [11:36]
Nicole Lapin
Yeah, honestly, I've become more into the charts with all this craziness because I think in the midst of all of the emotion, when you boil it down into charts and graphs and math and stats and history, it feels like something you can actually tackle. Like it just, it takes out all the drama from it. And so I've appreciated charting much more this year than ever before.
- [12:04]
Ryan Dietrich
Well, I love hearing that. I think it tells a story. Right. I mean, I'm a market technician, not that different than a lot of other market strategists, market technicians you see out there. But you know, people gravitate to stories. And I'm not just about telling stories, I'm about looking at history. Right. History and repeat itself, but it often rhymes. I love that quote. Mark Twain. We can show a lot of times in history, what's happened before and not necessarily what's going to happen, because nobody knows what's going to happen, but what happened before, what did happen after that. And when you do some of these things, it's incredible. I mean, listen, when Liberation Day took place on April 2 and those next two days, the S&P 500 fell more than 10% for one of the worst two day drops in history. Everybody was looking around trying to figure out what was going on. Because what we knew when President Trump held up that, you know, that piece of paper or that sheet that had all those, what the reciprocal tariffs are going to be, it was shockingly higher than anybody. I don't care if you were bearish, nobody thought 25% effective tariffs were going to happen. And then you see it and that's why the market just sold off. And then the bond market started freaking out that next week and then they dialed things back a little bit. But what's not going to change is everything under the sun. We've seen emotion, right? There's trading, there's this or that, there's still emotion. Emotion moves markets. When everybody's bullish, that's when you probably want to look around and worry a little bit. But when everybody's bearish. I know it sounds crazy to say, but that's when especially I know a lot of younger listeners and a lot of people who might have decades potentially to invest. Those are when you're going to make your money. That's when you're going to do really, really well. Because when everybody else is freaking out, panicking. If you've got time to invest, it's an old saying, it's not about time in the market. It's. Or it's not about timing the market. Sorry, yeah, it's about time in the market. That is the edge that longer term investors have is let the hedge funds let the algorithms try to fight over pennies in front of a steamroller or nickels in front of steamroller. For the rest of us that have time, and a lot of listeners to this podcast have time, it's a beautiful thing. I hate to say a bear market's a good thing because I don't want to come off and say that, but honestly, if you're young and you've got time to buy things when it's cheaper to buy things when they're lower, is, is, is a wonderful thing. The last little kind of cheeky quote that I like to use. The stock market's the only place where things go on sale. But everyone runs out of the store screaming, you know, remember? And when you want to buy some shoes and on sale, or jacket or listen, you got a steakhouse and it's on sale. Sure, we do that. For whatever reason, the way our brains are wired, most people that might have loved a stock at 100, hated at 75. Why do they hate it 75? Because TV told them. It's scary because there's. This happened and that happened. And that's how our brains are wired. We can't help it. That' back to caveman times, right? Get in. There's a saber tooth tiger. Go hide in the. Go hide. You know, that's. That's how we're wired. And it works that way with markets too, thousands of years later. But that's why we have to rewire ourselves and learn some of these things. And, and honestly, you learn by making mistakes. I've made tons and tons of mistakes, but I've seen throughout my career so many times people panic when they can't take anymore. I can't tell how many people got out of the market those two days after Liberation Day because it was terrible what was happening. And then you blink and now we're above. We were on Liberation Day just a month later. I mean, kind of wild, but that's how history works.
- [14:58]
Nicole Lapin
And by the way, I don't think we've talked about this, but that poster board or whatever was held out. It's wild. Like, whose job was it to go to Kinkos or Staples? Staples.
- [15:08]
Ryan Dietrich
Imagine if someone saw it first. Yeah, they shared it on. Like, look at this. It gets out there first. But yeah, I mean, because remember that day the market popped because President Trump said something like, oh, 10%, everyone. Oh, 10% across the board. Good. And then we zoom in and look. And then, yeah, it was, wasn't too fun after that.
- [15:23]
Nicole Lapin
I mean, but I think people, you know, in theory are down with the idea of a bear market if you have time. But I think, you know, you get antsy because you don't know how long the bear market is going to last. So what would you say to people who are feeling really scared about the bearish headlines coming out? Like, Miller Tabak is saying that there is going to potentially be a decline in the s and P500 in the coming months to around 4,000. You know, a fall to 4,000 is close to 30% down from where we are right now. JP Morgan is putting the recession odds at 60%. So layer on these stats with the ones that you are mentioning. And I think looking at historical factors is really, really important. And it helps us understand that history does indeed rhyme. But what about when we factor in the unknown? Like, we don't know if there could be another poster board with some scary stuff coming out from the White House tomorrow.
- [16:20]
Ryan Dietrich
Well, let's hope not.
- [16:21]
Nicole Lapin
First off, but why do you say that? Because you said, you know, a bearish market is good if you have time.
- [16:26]
Ryan Dietrich
Right. Well, I hear I'm making a joke. I mean, it don't need that much drama with the market. But I see what you're saying. So what we're doing with, with our models, right, the money we run, I mean, if someone's really worried about things, there's things you can do. You don't have to just be in like mag 7, right, the large technology names, which has obviously struggled so far this year. You can diversify, we say, when in doubt, diversify it out. That's what we're doing. I mean, we have more international exposure right now than we've had in a long time. Because again, the issues are with the U.S. you look around the globe. I mean, listen, Germany's what, 23, 24%? China's up double digits. Lots of countries in Africa are up double digits this year. There's a lot of other opportunities. So you can diversify. You don't have to just be in 100% stocks. I mean, you can be in bonds. Now, bonds haven't done all that great this year. But look at gold. I mean, gold has done incredibly. Now listen, gold's awfully, awfully overstretched, I think in the near term. So those are all some things that we, we've done in some of the models. Like we, we made a name for ourselves at Carson group this time two, two and a half years ago, early 23, most of 23, saying there'd be no recession, say there'd be a bull market. I know, it's like, oh, okay, you said that. Trust me when I say this, that wasn't popular. People hated that. I mean, I don't know why. People hated that call because they were promised a bear market, promised a recession. We went against it. We had like 91 to 92% overweight equities or equities in our unconstrained tactical models that we run. I know it's a mouthful. That's just saying we had a lot of stock exposure because we thought stocks the last couple years, we have dialed that back a little bit. We're like 74, 75% equities. Right now we do have some gold. This is like all year. This is like all year. You know, something we just did, we did this coming into this year. We added some international exposure. We added some Treasuries for the first time in a while. Because again, if you're a little after just after a 70% rally like we saw in the S&P 500 from October 22 to the February 19 peak this year, you got to say to yourself, that was awfully. That was dice. That was great for investors. But it might not always be that way. It might be rocky, right? We didn't have a 10% correction last year. The odds of a 10% correction this year were very high. We were on record as saying we probably have a 10 to 15% correction at some point this year. No, we do not think it'd be a near bear market down 18.9%. We also didn't think that Liberation Day would be as aggressive as it was. But it was. It is what it is. So that's some things that I think people can think about and do is to diversify themselves. And the other thing, I've done this a long time. Some of the best investors I've ever met are the people that set it and forget it. By that, I mean every two weeks in a 401k or every two weeks in somewhere else, an IRA or something, they just put money in. And I know it's hard, but they close their eyes and you wait. And 10 to 15 years later, if you were buying dollar cost averaging in following the plan, when it's red out there and everybody tells you how bad everything is on tv, that's when you want to hunker down, right? The time to plan for the storm is not during the eye of the storm. I mean, we have to plan for the eye of the storm way before it comes. And you mentioned the uncertainty. I mean, unfortunately, 2025 is not the first year in history where every day is green and there's no uncertainty. We've had uncertainty throughout history. I mean, just last August, right, We. That was a great year. Last year was a great year. Stocks gained 25%, give or take. You know, we had that yin carry, trade unwind that I know hopefully most people remember what I'm talking about. But trust me, that first week of August was really uncomfortable. Market, I mean, didn't crash. Market pulled back a lot in three days. And there was a lot of fear. Most years are going to have those scary headlines. So you can do yourself a big favor by coming into the year, expecting a 15% correction at some point during the year. You know, bear markets happen every three and a half years. We had two bear markets started this decade and believe me, a very, very close bear market just a couple weeks ago. So, so those things do happen. But sure enough, now we blink and we've, we've come well off those lows. And I get the negative sentiment, I get the negative calls that people have made. There's always some bulls, there's always some bears. But I think when we look at the entire picture and backdrop, there's still an economy that likely avoids a recession. It slows down. We just got a negative GDP print, right. Just last week got a negative GDP print in the first quarter. Well, that's not great. But then you peel back the onion. It's because a lot of companies bought a lot of stuff ahead of time, ahead of tariffs, inventory soared, trade exports, imports. Exports took out like 5% of GDP. So if you look at something called final demand, which is like spending from households and businesses, it was like 2.3%. I'm not saying 2.3% is great, but I'm saying that's fairly, that's a fairly solid economy. Heading into all this tariff stuff, is it slowing down? Absolutely, the economy is slowing down, but it doesn't mean you have to go into a recession. And in recession is when you tend to get Those really big 4,000 number that. I forget who you said said it, but whoever said 4,000 on the SP, I mean, that, that's calling for a recession, right? I guess I'm not, not in that camp quite yet. Yeah.
- [20:56]
Nicole Lapin
But also a reason that you don't want to pull your money out or go the other way when there's a sale happening is because I think it's what, every 19 days or 20 days historically there's been a new high in the market, too. So you miss out on that ride. Hold onto your wallets. Money rehab will be right back. And now for some more money Rehab. If somebody's looking to diversify into international markets, which you say you now like, where should they start? It's a little intimidating to do international stuff.
- [21:35]
Ryan Dietrich
No, it sure is. And listen, we have something called home country bias, which, like the name would suggest where you live is what you tend to invest in. The good news for most people. Well, I guess you've got international listeners. You definitely have international listeners. But for people in the U.S. you know, if you've been overweight the U.S. the last 10, 15, five years, last two, three, years, you've done really well. Really, really well relative to the rest of the world. You know, the easiest way is through ETFs, right? We really like developed International. I'm not technically allowed to mention any ETFs by name, but there are some very easy to find developed international ETFs. I mean, Germany's doing well. There's lots of other countries are doing well that you can add a little bit. Like in our models that we run, you know, we've got like 10, 15% developed international in the models. And, you know, that's. That's a decent amount. That's probably a lot more than a lot of RIAs have. A lot of other places have. So we. We clearly have some exposure to those parts of the world which we're. This time. A year or two ago, we were more all in US and that obviously worked really well. But now it's just like, you know, okay, the lifeblood of a bull market is passing the baton around. And, you know, I still think we're in a bull market. I know what's happened in the U.S. but again, look around the globe. There's, like, different ways you can look at this, but like, the globe ex us. So take the US out, which, honestly, I think it's like half the entire market cap of the globe. But if you take that out, you're up almost double digits this year and the US Is down. Yes, but there really are some. Some other parts doing well. So I think a diversified portfolio with a little bit of develop international makes sense. With the emerging markets, we're not too warm and funny. Warm and funny. Warm and fuzzy. Yeah. Warm and fuzzy on China right now or on emerging markets. That's because we're not too crazy about what's going on in China still. And China's Chinese stock market's done. Okay. We've seen this before, like Lucy in the football, where Charlie Brown tries to kick football, she pulls the football back. We've seen these fits and starts with China before. So to us, just the sentiment got way too negative regarding Europe, and rightfully so. Europe's underperformed us, it feels like, for two decades in a row. But all of a sudden, they're starting to do better. And this is why you diversify. There's an old saying. I've done this for a while. That old saying that.
- [23:30]
Nicole Lapin
Love your sayings.
- [23:31]
Ryan Dietrich
Yeah. Being diversified is always having to say you're sorry. All right? And it felt like that the last couple years because all you needed to do is be in the Mag 7. And boy, oh boy, you were doing pretty good. Why in the world would I, I work with financial advisors every day. Like, you know, their clients say why in the world would I go buy a utility stock or a healthcare stock when all I need to do is go buy the Mag 7. Well, then you come into this year where those stocks are down 34. I know they're probably up, you know, a little bit lately, but down 30, 40%. That is why you diversify. That's why you don't chase a shiny object all the time. The shiny object is the top performing group the last year or two. Or growth is the top performing sector the last two years. How is growth doing this year? Not very good right now. I'm not saying I can't come back. I'm just saying these first four months have been a big, big black eye. Whereas value was actually up in the first quarter. I mean, value was up in the first quarter, financials are up on the year. You know, there's other groups that, that do well. And that's why again, you don't want to go all in one group. Don't always want to chase shiny object. Stick with your plan, diversify, follow your investment plan. And of course I work a financial advisor, so I would say work with a financial advisor, but you don't always have to do that. But that can, that can obviously help as well. Yeah.
- [24:37]
Nicole Lapin
When everybody after the election was so stoked about the market, the shiny object was actually gold was down. I ended up buying some gold then, which has gone on a huge run. I know you aren't able to mention specific tickers. I'm just going to mention that. How about that sounds good. Just Vanguard. Vanguard tends to be, you know, low cost ETFs that you can get. V E A, which is a developed market ETF VX US, which is Vanguard's total international stock ETF and V EU for instance, do your own research, of course, is the All World X US etf, which is the one.
- [25:17]
Ryan Dietrich
Yeah, the idea you were, you know, you mentioned sentiment. I love sentiment because it's true. When President Trump won, market rallied. Initially, the Economist had a magazine cover with $100 bill rolled up shooting into outer space. And I forget the exact title, but it was something about the envy of the world. Okay, now the last four covers in a row from the Economist. To say they're bearish would be an understatement. It is like literally as one of them is a countdown to when President Trump leaves office. Okay. I mean, so you talk about sentiment. I don't know if I've ever seen sentiment sour so quickly. But again, you know, when everyone loves it, that's when maybe you got to look around and wonder what's going on. And sure enough, I mean, everybody said the dollar had one way to go, and that was up this year when President Trump won. We looked around, we disagreed because again, if everybody's thinking alike, somebody's thinking everyone was talking about one thing, the opportunities to the other side. And when the dollar goes lower, gold does better. When the dollar does, goes a little bit lower, you know, also does better the rest of the globe. Right. International stocks tend to do better when the dollar's weak. So that's what we've clearly seen this year. And also, I'm with you on gold. We actually added gold for the first time in some of our models back in March of 2023, so a really long time ago, you know. Oh, Barron's. I'm a big fan of Barron's. I mean, Barron's literally this weekend had gold bars on their magazine cover. Okay, if you're a contrarian and you see barons with gold bars on their magazine cover, that tells you a lot of people have realized gold's done really, really well. So maybe it's time for a well deserved pause. But, but, but the reality is we also. I'm with you. We added some gold back in November after the election when dollar soared, gold was crushed. I like to buy things in bull markets with violent short pullbacks. And sure enough, that's what gold obviously did back in November. So good, good trade there.
- [26:57]
Nicole Lapin
Examples of buying gold would be something like gld.
- [27:02]
Ryan Dietrich
Exactly. Yeah. New gold stocks. We, we personally don't own any gold stocks or gold ETFs. We're sticking with Simply ETFs based on the price of the metal. But trust me, if somebody wanted to be more aggressive and they had a stomach for it, then yes, some of those gold stocks obviously will do a lot better because they're more leveraged than the actual metal. But hey, the metal's doing pretty darn good on its own.
- [27:25]
Nicole Lapin
Are there any other gold ETFs or gold exposure besides GLD? That's, you know, like the most popular.
- [27:30]
Ryan Dietrich
There are. Yeah, yeah, there are. That's clearly the big one. I mean, that's the, that's the goal. You like this one? That's the gold standard. I can't believe I just said that. That's the gold standard for ETFs with gold. There are some others. Honest to goodness. Off top of my head I'm not 100 sure. But there are. But that's the safest one that if you just want some gold exposure, you know it's been around the block once or twice. Funny thing about that one GLD and I think it was 2011, maybe 2012. That's when there were more assets in that GLD et ETF than there were an spy. The S P 500 ETF. Like maybe it was had him in 2011. That's when gold peaked. And that was looking back a major, major peak in gold. And that was one of those anecdotal sentiment things. Looking back. Oh it's obvious but I mean that was a little over the top. We're, you know, we're not quite seeing that yet with gold. One other thing on gold, I mean gold went up from 2009 until about 2011. So about 12 years then look at the chart. Gold went sideways for about 312 years. Now when I say sideways, I mean it didn't go up. It went down to sideways for about 12 years. So now it's broken out. We're a couple years into this thing. By no means am I like some huge gold bug. I think stocks are going to do pretty good. I don't think there's going to be a recession. But for a diversified portfolio, someone's own something, you think about a 60, 40 portfolio. What is that, 60 stocks? 40 other stuff. Usually bonds. Okay. Usually bonds, other 40 to us it makes some sense to own some gold in that other 40% and maybe gold's going to pull back because it's had such a historic run. Perfectly, perfectly normal. If gold pulled back 15% that'd be perfectly normal with the, with the incredible rally that it's had. And that's maybe an actual good buying opportunity. So for longer term investors out there, have some stocks, yes. Have a little bit of bond, sure. But honestly having a little bit of gold makes sense because again these cycles last a lot longer than you think. If 12 years it went up the one time. 12 years went sideways. Now we're two or three years into this one. Who knows, who knows what's going to happen. But I would be open to the idea that gold might continue to do pretty well here over the next five to ten years. Honestly. Yeah.
- [29:24]
Nicole Lapin
I think what you're saying is that it's not fun and sexy to be diversified in a year like we had last year when equities were ripping. But when we're in a year like this year, you all Of a sudden appreciate the other 40 or whatever else you're diversified in. That was looking like a dog last year.
- [29:43]
Ryan Dietrich
No, that's exactly right. And even 20, 23, I mean, Mag 7 did well. So people were conditioned for a couple of years to just be in the large cap tech names and then, you know, then they drop like they did. So it's, it just still makes sense. I mean, this is some old stuff that people way before my time were talking about. But stay diversified, stick with your plan, you know, continue to buy when you're supposed to buy. And then don't, don't make an irrational decision if you can help it. At the worst time. You know, I'll do another quick little story if we've got time. The Lawrence of Arabia, the movie Lawrence Arabia, there's a scene called the candlestick scene. And this guy goes up to the candlestick and pinches it and takes it out. The second guy looks at it, goes up to the, he wants to try it. Goes up to a candlestick, pinches a candlestick, screams in pain. And he looks at the first guy and goes, how in the world did you do that? The first guy looks at him, just says, you just got to know it's going to hurt. That is investing. It's going to hurt the cost of admission. Your strategy is not going to work at all times. I don't care what it is. It's not going to work at all times. And the cost of admission, we like to say on our team, volatility is the toll we pay to invest every year. Well, on average you see a 10% correction once a year. Doesn't mean every year has to have it. But on average you see. See that? You see like 8 different 3% corrections a year. You see like 5 different 5% correction a year. Bear market every 2 and a half years. But then you look at a longer term chart and you're like, wow, that usually goes up. You know, 50 years ago right now was the fall of Saigon. And listen, I'm no expert on this at all. I just know it was a very, very big deal. April 30th was the fall of Saigon. But you look at history and it's just like a small blip on the map in 1975 now and stocks have gone up and there have been so. We've had world wars, we've had pandemics, we've had inflation deflation, all this terrible stuff that's happened since May 26, 1896. Why'd I pick that date? That's when Charlie Dow started the Dow Jones Industrial Average, it was a bunch of railroad stocks back then. It's not so much now, but the reality is we've seen a lot of bad stuff. But for the investors and the listeners out there, just remember we've also seen a lot of good stuff throughout history. We've had bad news. We've, we've also had a stock market that came back to new highs every single time. I'm not saying it's going to happen quickly. Sometimes it takes a while. You know, 2022 took a long time to get back above those January 22nd peak that we just saw. But a lot of people that were investing and adding to their exposure in 2022, 2023 were really, really happy when in 1Q24 we broke out to new highs and gained another 20% last year. So I think those are just some real important concepts to remember. And as a market strategist that works with financial advisors every single day all over the United States and 50, I think we're 51,000 house now. These are things that we try to preach every day and it's fun. We don't take it lightly. But it's very, very rewarding to try to help people reach their long term goals and to put a cherry on top. Some of the worst, the most negative thing we have is our own brain, our own cells, ourselves, we kick ourselves in the, in the shin more than we should. Right, as investors because we get all worked up and all upset or the opposite, too excited when your neighbor's getting rich. And I'm going to paraphrase it, I'm going to butcher it, but JP Morgan said, you know, the worst thing to see is your neighbor getting rich because you're going to make bad decisions. And I'm paraphrasing it, but that's the worst to see because then you're going to want to do what they're doing and they're probably full of, you know what, anyway, so again, stick with these plans and invest for the long term and you'll do really, really well. I'm pretty pretty confident to say, yeah, I like it.
- [33:00]
Nicole Lapin
Boring. I like to keep my strategy real boring. Yeah, just have fun somewhere else. But you know this idea that when you're in the thick of it, it's really hard to zoom out, but once you do, you can see that this is just going to be a blip. But while everybody's focused on tariffs, that's the biggest story in the news right now. I'm sure there's other stuff going on that we're just not following. What's one of the biggest things that you're watching that's not so much in the headlines right now that maybe we should be focusing on more?
- [33:30]
Ryan Dietrich
Yeah, I guess I kind of cheated and gave some of these away. I think the fact that Europe is doing so, so well, people still aren't even talking about that. At least I see. I mean, that's really not out there. You know that. That's one that stands out to me. I'm gonna try to say something else I haven't said yet. Here's one that I was talking about three weeks ago, okay. When the market was looking pretty dour. The credit markets continue to function just fine. I said, if there's a monster under the bed, we would have had more stress in the credit markets when the s and P500 was flirting with a bear market just a couple weeks ago. I'm gonna get a little geeky. But people, you can look this up, listeners. It's free data in spreads, like investment grade corporate spreads, triple B spreads. We're not blowing out. Let's just keep it real simple. When those things blow out, that's the credit market's way of saying we're worried about the monster under the bed. We didn't see that all right. Earlier this month. And sure enough, here we are now with the market come off the mat in a big, big way. And the credit markets are still quite calm. You know the vix, the volatility gauge, It's a function. Hopefully people have heard of the vix. When it spikes, it shows fear out there. It's what the options market thinks volatility will do in 30 days in the future. So that's a mouthful, but just real simple. About three weeks, the Vix spiked above 60 on a Monday. It was one of those Mondays a couple weeks ago when things was a bloodbath. And that is extremely rare to see the VIX spike that high. It's consistent with. You're in the ballpark of a load. I mean, you're at the low, but in a ballpark, the trigger is when you go from above 50 and then close beneath 25. That just happened, oh, maybe a week or so ago or maybe just this week, maybe last week. Last week the stock market closed beneath 25. So the options market's calming down. We get the headlines, we get the uncertainty, we get the. I mean, manufacturing slowing down. Consumer confidence is lower now than it was in the middle of a hundred year pandemic. We understand all of these things, but sometimes there are smarter functions out there that we follow. And like the credit markets and the VIX calming down are some that again to us suggest the worst is over and the lows are in. That doesn't mean we're going to go straight up. That doesn't mean it's going to be off to the races and be very clear. But do we violate the April 9, the April 8 lows at this point? I mean, we're, we're saying no, there's been too many things have taken place. We think, you know, we're well off those lows, by the way that those lows are in. It might still be choppy, might be frustrating, but that's how we're seeing the world here. And the two things, to answer your question, the two things no one's really talking about, I guess would be credit markets hanging in there and the VIX has really come back. Those are two things we like to see.
- [36:04]
Nicole Lapin
Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions, money rehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagram @moneynews and tiktokoneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.