TRANSCRIPT FOR THE JULY 9, 2016 “ON THE MONEY” SHOW

Hosts: Gary Abely, CPA, CFP®, AIF® and Joe Bert, CFP®, AIF®

It is an Ask the Expert weekend on News 96.5 WDBO.  My name is Kirk and this is On the Money brought to you by Orlando’s oldest and largest — Independent.   Firm of certified financial planning professionals, that being the Certified Financial Group in Altamonte Springs, and with us today we have two of the twelve certified financial planning professionals, plus a CPA to boot.  We have with us Joe Bert, the Oracle of Orlando, and Gary Abely in the studio to answer your questions today.  Good morning gentlemen.
Good morning, Kirk.

How are you guys?

Good, good to be here.

It’s nice to see you.

It’s good to be seen, thank you.

Joe, in case anybody is new to the show, Joe, what are you and Gary here to take calls about?

Well, Gary and I are here to clear up the financial brain fog you might be having as we say in our commercials that we run here on WDBO.  Unfortunately, our educational system has failed all of us when it comes to teaching to save and invest for our financial future.  There’s going to come a point in time when the paychecks stop and what we’ll live on is Social Security and if you’re fortunate enough to have a pension, which fewer and fewer people have today, you’ll have that.  But, it really comes down to what you’ve been able to save and accumulate while you were working and this is what the show is all about.  What we do day in and day out as <Inaudible> financial planners and how we work with our clients to show them what they need to do now so as I say they don’t look back five or ten years from now and say gee, I wish I had known or man, I’m sorry I did this.  This is what we’re all about.  So, if you have any questions about your personal financials, we encourage you to call and we’ll talk about things like stocks and bonds, mutual funds, real estate, long-term health care, IRAs, 401(k)s, annuities, life insurance, reverse mortgages.  All that and more.  So, we are here this morning to take your calls and the good news for you is there’s absolutely nobody in line because we just got on the air and now all you need to do is pick up the phone and dial.

844-220-0965.  844-220-0965.  You can also text us from your mobile device.  That texting number is 21232.  Again 21232, or, if you’re so inclined and you want your voice on the program, you can make a comment or you can ask a question via the open mic.  You’ll find the open mic on the News 96.5 app.  Gary Abley, so nice to see you in the studio today.  One of the CPAs, or

The only.  He’s the only CPA that we have in the firm.  All the rest of us are certified financial planners, but he has that extra stuff.

Now, careful Joe, we’re going to get a bunch of tax questions if you keep that up.

We know you can handle it.

So, he’s a real popular guy is what you’re saying to me?

Oh yes, particularly around April, yes he is, but he — the great news for us is that when we have those odd tax questions, Gary generally has the answer.  If he doesn’t know the answer, he knows where to find the answer, so lots of great, great resources and he’s a real asset to our firm, and we’re glad he’s with us.

Yeah, and some of the things that we’re going to be talking about today are the next bear market, how to psychologically and fiscally prepare for the next bear market.  We’re also going to be talking about your financial plan and what happens when you assume too much perhaps.  And we’re going to talk about treasury yields, and we’re going to take some of your text questions and your phone calls.  Again, the number is 844-220-0965.  Of course, the name Gary Abley is familiar to everybody because Gary, you put on these fabulous workshops.

Got one coming up.

We do, we have several coming up.  The first one coming up actually is Nancy and Denise in our office put on a Social Security Boot Camp and a lot of folks think that some of the strategies that have gone away precludes them from planning, but there’s still a lot of strategies that one can employ, so highly recommend that workshop.  It’s July 18th and that’s a Thursday, and it is from 6:30 to 7:30 at night and you can register on our website at financialgroup.com.  The next one that I’m doing is Countdown to Retirement, so we have — go over various topics when you’re about a year or two from retirement, and we have our attorneys that help us out, Jodie Murphy and Michelle Berglin can also help answer your questions as it relates to documents that you should have prepared as you enter retirement.  Then the following one, we have financial basics for life and this is a great one for those who sometimes listen to us and as Joe mentioned earlier, get into the fog of financial planning.  So, we go over the basics.  It’s great for anybody 15 and up and I started it out as a teen boot camp.  Then most of the adults who were bringing their teens said gee, I didn’t know that either.  So, it’s evolved into an Adult Financial Basics for Life.  Lastly, the workshop that we have on October 25th is When Can You Retire? Know Your Number, know how much you need to retire and some of the strategies you can employ if you’re short on that number.

So, the information on all of that is on our website.  That’s financialgroup.com, financialgroup.com.  Click on the workshops tab.  You can make a reservation right there online.  They are absolutely free.  Leave your checkbook at home.  I guarantee we’re not going to try and tell you that an annuity is the best thing since sliced bread.  Yes sir?

You’ve been putting on these workshops —

We have.

For a long, long, long, long time and —

In fact, we coined the term — and I know this is going to be hard to believe — but we coined the term Lunch and Learn.

Right.

About 30 years ago, we used to do what we called Lunch and Learns in the office.  Now <Inaudible>

I did not know that.

Now everybody’s got lunch and learns, yeah.  In fact, I stole it from one of our former colleagues who has since retired.  He coined the name and we adopted his Lunch and Learn, but everybody has Lunch and Learns now.

It’s a great public service that you guys put on.

Yeah, it’s absolutely free and the reason we do that — people say why do you put these things on? Basically for two reasons; number one to give you some information so you don’t fall in the pitfalls <Inaudible> declines end up in, and second to introduce you to our firm, as what we do as financial planners is we work with you on a fee basis and introduce you to our firm and whether you need financial planning now or sometime in the future perhaps you’ll give us an opportunity to earn your business.  Financial planning is nothing more than looking at where you are today, where you want to be in the future, and how do you get there from here.  That’s what we do.

844-220-0965.  Let’s talk to Charles in Lake County.  Good morning, Charles.

Good morning, Charles.

Good morning.

Thanks for calling.

How are you?

Good, thanks for calling the program.  How can we help you?

Well I have — I’m 48 years old now.  I moved down to Florida, opened up a small trucking company.  I have, sad to say, not a lot of money saved for retirement, but I make great money.  And I was wondering is there anything that I could do or any investments that I could invest in to help me out?

Sure, well first of all, good news for you is you’re still young, 48 years old.  The second thing, you’re making a lot of money.  That’s a great —

That’s always a good thing.

That’s a great combination.  Now, the key is how to accumulate that money the most tax efficient wise.  Go ahead, Gary, what would you recommend if Charles were in your office?

Well Charles, are you self-employed?

I am, self-employed, yes sir.

Okay, so then one thing you might want to consider is called a SEP-IRA and you’re able to put away 25% of your compensation into a retirement account on a pre-tax basis so you’ll save income taxes equal to what you put away.  In terms of what types of investments, a good rule of thumb, Charles, is 110 less your age as the percentage you might consider investing in stock mutual funds.  So, for example, about 60% we might recommend stock mutual funds for you.  And in addition, the balance then of that would go into fixed income so that might be something to consider.  Now, from that number you could bump it up or down based upon your personal risk tolerance, but there are a lot of different investment options that you could consider and I would recommend a diversified mix of mutual funds that have both large, mid-size, small caps, some international exposure.  But, the good news is get started.  You can do an automatic draft out of your personal account so that you do a dollar cost averaging into these investments over time.  Key thing is get started quickly.

Okay, great.  Thank you very much.

Well, let me give you something else to think about Charles.  Depending on your income and seeing how you’re self-employed you can take it even deeper than that.  You can do what’s called a cash balance plan, which is your own personal pension plan and you can set up a couple $100,000 on a pre-tax basis for yourself.  So, that takes a little bit more planning, it takes an actuary to get involved, but as a self-employed person you have a really tremendous opportunity to put aside some really serious money in a short period of time.  So, Gary’s suggestion with the SEP-IRA, you can also consider what’s called a Uni(K), a one man 401k, and the maximum of that is 52,000, 53,000.  You can do that, or do a cash balance plan.  But, the key is to put that money aside on a pre-tax basis.  So you immediately, depending on your tax bracket, you can save up to 40%, 43% of whatever you put in there.

We’d be glad to help you, Charles.  That’s what we do day in and day out for our clients is we — we’d be glad to work with you.  Just give us a call and we can set you up.

Okay, please check out the website for the phone numbers or just get in touch through the website at financialgroup.com, financialgroup.com.  Let’s talk to Edwin in Orange County.  Edwin, go ahead sir.

So, my name is Edwin, but I’m 37 years old and I want you to help settle a <Inaudible> with my wife here.  I have a full — a balance on my 401k for about close to 100,000 and one side of it <Inaudible> liquidate the 401k, take a hit on the penalties and the taxes, and buy a property.  <Inaudible> the loans on those would give us the biggest return.  Then leaving it there —

I think we can stop you there, Edwin.  Joe and I are both shaking our head no, and the reason for that is that penalty when compounded, and the income tax when compounded between now and your normal retirement age will be huge.  We’d be happy to calculate it for you if you call our office, but I know I did the math once on a 30 year old just taking out just 5,000 out of their 401k and it amounted to a $221,000 hit over a period of time of a 20-year retirement period, assuming a 7% growth rate on the investments.  So, you never want to touch that 401k and there are no guarantees that the property that you purchase would appreciate greater than the investment anyway within, but when you factor in the penalties and the income tax, that is not a good idea at all.  Joe, can you — ever seen an idea where that turned out good?

No, first of all how old are you?

I’m 37.

37.  You want to take $100,000 out of your 401k.  So, you’ve got to recognize that’s going to be immediately taxed to you, plus the penalty.  So, you’re going to lose right off the top maybe 25%/35% of your money.

You probably won’t net but 60, 65.

Yeah, so take $100,000 out, and you’re left with $65,000.  <Inaudible> like I what if tomorrow morning you opened up your 401k statement instead of being worth 100,000, it’s now worth 60,000, okay.  It’s got to increase more than 50% to get back to where you were.  Yeah, so tell your wife to turn off the CNBC or whatever she’s watching.  It doesn’t make sense at all.

No.

I think we can probably do this call real quick.  This is Ken in St. Johns.

Ken, go ahead sir.

Yes, hey, how you doing?

Alright.

We’re good, thanks for calling the program.

I’ve recently saw this thing on Youtube about a program whereby you use a home equity line of credit to help pay down your mortgage a lot quicker than you normally would.  One of the — I guess there’s several out there, but one of them is called truthtoequity.com and I got on there, and I looked at it, and I actually spoke to the guy and it sounded pretty good, but I wondered if there were any pitfalls to it.  I wondered if you guys had ever heard anything like this before.  You take out a home equity line of credit and —

Let me stop you there.  Do you buy life insurance?

I’m sorry?

Do you buy life insurance with the money that you borrow?

No, no.

Oh, good.  You’re not the usual gimmick, but go ahead.

Keep going.

No, no, you take the money that you borrow and let’s say I take out a line of credit for 25,000 and I put it towards the principal on my mortgage.  Now, instead of having to pay now two separate bills, one for the HELOC and one for my mortgage, he said to — what you’re going to do is you’re going to deposit your paychecks into the HELOC so between my wife and I let’s just say we make $8,000 a month or — yeah, $8,000 a month.  We deposit it in a HELOC.  So, to the HELOC the payment will be rather small because every day that there’s money in there, it is being — no, the interest on that loan is being calculated up a lot smaller than it normally would be because you’re depositing your paychecks in there.  So, in other words, you wouldn’t have very much to pay on the HELOC and you are actually paying down the interest on the — down the principal on the mortgage.  And so that basically was the idea.  And I know that a HELOC could be an adjustable rate, again, seed for at least a year.  The one that I looked into was 2.33% per year and then it was — then it was guaranteed for that for one year, and then it will go up one percentage point the next year.

Gentlemen, can I interrupt? I’ve got to get to Dave Wall in the News Center.  You guys can ponder this while we get the news, and then we’re going to come back and we’ll pick this up.

This hour was paid for by the host and does not reflect the opinion of News 96.5.

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Coming up on 9:28, we’ll get back to Dave Wall in the News Center in a couple of minutes with an in-depth look at the news, traffic, and your weather forecast for the rest of the weekend.  This is On the Money brought to you by the Certified Financial Group.  Joe Burt in the studio along with Gary Abley, both certified financial planning professionals.  With us on the telephone, Ken.  Ken has a question about using the HELOC, or home equity line of credit, to pay down the mortgage.  Is that basically what I got, Joe?

Yes, yeah that is right.

Okay, so for those listeners who may have just joined up, what Ken is suggesting and — now that you mention this, I’ve seen this years ago, and you are 100% right.  I’ve also seen this scheme and that’s why I jumped into this, where these folks who sell insurance want you to take out a home equity loan, buy an insurance policy, and they’ll make it do everything include make your dinner somewhere down the road.

Lovely illustration.

There’s pros and cons to what you’re talking about.  So, Gary and I chatted about this at the break.  Go ahead, Gary.

I’m going to start with the pros and leave the cons to you.

Okay.

So, the cons of course are that the home equity line of credit is a variable rate mortgage.  Now, you may have secured that it would be fixed at some point, but of course 30-year rates have gotten down to a historic low of just about 3.3% for folks with good credit.  And let’s say you were to take your home equity line of credit and pay $20,000 towards the mortgage just as an example.  Your mortgage payment on the principal, the first mortgage, remain the same.  So, from a cash flow perspective, what you’ve done is you’ve kept your mortgage payment the same, but you now have an obligation on that home equity line of credit and that’s a payment that may only be interest only, as some of them are slated, but I don’t like it because that rate can go up and you’ve eliminated your equity in your home as an emergency fund.  So, what I do like about home equity lines is using them as an emergency fund if you get into a bind.

What’s the interest rate on your first mortgage, Ken?

4.25.

Yeah.  And so you’re getting actually pretty close, especially on a 15-year rate where you could knock that down maybe a point and a half and <Inaudible>

The thing about it is — I’m sorry.

Go ahead.

They’re talking about being able to pay off a — and he did it for me — I mean when you call in to the program, the guy will put you on the phone and he’ll take you to <Inaudible>.com or whatever where he can show you on the computer the amortization schedule of your current mortgage of 4.25%, and then he can show you if you use this program and you put the money from the HELOC towards your principal every month, he can show you that you can reduce a 28-year mortgage to basically — for me, it was under seven years.

Gentleman, hate to do it, but I’ve got to get to Dave Wall in the News Center.  It’s an Ask the Expert Saturday morning on News 96.5 WDBO.  Glad you’re with us.  On the Money, brought to you by the Certified Financial Group in Altamonte Springs.  With us in the studio, Joe Burt, the Oracle of Orlando, and Gary Abley, a certified financial planning professional and a CPA to boot.  So, we have an open line for your financial questions at 844-220-0965.  And Ken, I hope Ken is still with us, Ken, are you still there?

I am.

Alright, Ken, thanks for your patience.

Hang in there.

So, Joe and I were talking at the break and certainly, you can pay off the mortgage quicker by using the spread between your mortgage rate and the HELOC, so long as the HELOC remains lower, but the ability to pay that off In the seven years, that is solely by using additional cash flow to pay off the principal.  In other words, that would work very similarly, except for the interest rate difference, whether you were paying down principal on your first mortgage or paying down principal on the HELOC.  So, yes you can do it, but you really risk two things.  You risk being able to access your home equity to pay for an emergency that might come up, and you also risk that the interest rates go up on the HELOC and now you’re in a bind because you have to make the same payment on your mortgage because that monthly payment doesn’t go down, and yet your obligation on your HELOC would rise because of rising interest rates.

Ken, let me ask you a question here.  So, the idea once again is you take out a HELOC.  You apply whatever you’re going to get to the principal on your first mortgage, and then you take both of your paychecks and you slam it against the HELOC.

Yes.

Right? And then you draw from the HELOC as you need the money.

Correct, you use the HELOC as basically a checking account.

Right.

I’ll pay off all my bills using the HELOC.  And I understand that as the month goes on and the money depletes from the HELOC as I pay off bills, I don’t get as much bang for the buck, but while the money is in there, each day that it’s in there, it’s countering a lot of that interest that the HELOC will be charging me.

Sure.

So basically, I’m using my checking account actually for something.

Right, correct.  I’ve got you, I’ve got you.  Well, if you’re comfortable with it, go to bank rate — what’s the —

Yeah, bankrate.com.

Bankrate.com, but Google it.  And there’s pros and cons to what you’re doing.  I’m not saying it doesn’t work, but the risk that Gary says is there, when the HELOC interest rate rises and you get caught on the other side, and then of course you’re using up your available credit on the HELOC.  But, if you can discipline yourself to just —

The numbers work.  It’s not a hoax in other words.

Yeah, it’s not a hoax.

Yeah, right, yup.

Okay.

Appreciate your call.

Thank you.

That was long.

Yes it was.

And you’ve got to thank us for your patience.

Alright, the number is 844-220-0965.  Here’s another person who’s been hanging on for quite awhile.  This is Steve in Palm Bay.  Good morning, Steve.

Good morning, Steve.

Hello, Steve.

Good morning.

Thanks for calling the program, how can we help you?

I’ve been wondering why closed-end funds are rarely talked about as far as a way to get income.

Well, we don’t — we talk about them on an as-needed basis.  I don’t know what you’re listening to or what you’re reading.  I’ve seen stuff on closed-end funds.  How about you?

Well, usually they talk about mutual funds, but they don’t talk about a closed-end fund, you know, one that will give you a monthly distribution.

Well, you can get a monthly distribution from an open-ended fund as well.  It’s just another way of owning stocks, either on the closed end where you have a set number of set portfolio, whereas an open-ended fund is constantly trading within the portfolio.  So —

From a cash flow perspective and an income perspective, there really isn’t a difference.  It’s really just that the make-up of the fund and that the cash flow in an out of the fund, one is fixed, one is variable.

Right.

Well the ones I was checking on, it seemed like the distribution rate on the closed-ends were always quite a bit lower.  Is that because they use leverage?

I — without knowing the funds specifically and doing some research, I couldn’t tell you.

Okay.

It well may be.

Alright.  Bye.  Thanks very much.

Bye, thank you for the call.

Alright, let’s take a call from Jack in Satellite Beach.  Good morning, Jack.

Hello, Jack.  Thanks for calling the program.  How can we help you?

Good morning.  I’m wondering.  Everybody’s saying buy gold and silver, buy gold and silver.  Now, when you buy the gold and silver, what do you do with it and how do you spend it?

Well, that’s a great question, Jack.

It is a great question.

And you know Warren Buffett I just heard recently is not a huge fan of the metals because simply they sit there.  They don’t produce an income.

Right.

And so, how do you spend them.  That’s a good question.  You know, most people use gold or silver in their portfolios as a hedge against inflation, at least that’s how they’re sold.  I personally am not a big proponent in owning physical metal for the very same reason, it does not produce an income.  So, how you spend them is you have to cash them in, and typically there’s a difference between the spot price what gold or silver is currently trading at, and what somebody is willing to pay you for that gold coin.  So, they are not a very easily exchangeable — I mean yes, they’re very liquid in the sense that you can get cash very quickly for it, but the sales charges for using it as an income source would not be appropriate.  So, Jack I would stick with diversified stock and fixed income mutual funds, and not put more than 5% in any gold or silver product or investment in my opinion.

Yeah, there’s a good article about gold as an investment in this morning’s Wall Street Journal by <Inaudible>.  Did you read it?

I did.  Yes.

Did that help you out, sir?

Yes, it did.

Alright.

Thanks for the call.

Thank you very much, Jack.  And let’s talk to Laurie —

Hello, Laurie.

In Orlando.  Good morning, Laurie.

Thanks for calling the program.

Hi.

How can we help you?

I’m not sure if I should refinance my house.  I had a loan modification a few years ago and it was at 3%, but now it’s at 4%, and next year it goes up to 5%.  I still owe about 187,000.

What’s your house worth?

I would hope, think, around 200,000 to 250,000.  I think I’m not upside down.  I think I used to be, but —

Well Laurie, that’s a big range.  Now, if it happens to be 250, I would tomorrow or Monday pick up the phone and call a mortgage broker and see if you can qualify for a 30-year fixed if that could suit your budget, if you can afford to pay a 15 or 20-year mortgage rate simply because we have not seen rates this low in how long?

Decades, certainly.  Multi-decades.

What — how low are they?

Well, a 30-year I just saw in the paper was 3.3%, 3.33% I think somewhere, so that’s a fixed rate for 30 years.

In 15 years it’s going to be under 3%.

Yeah, but usually it’s 0.5% difference.  So, I would definitely look into refinancing so, what they’re going to look for is an 80/20 ratio.  So, if you’re at 250, then 20% down, you’re fine.  You’ll be able to refinance.  If you’re closer to 200, you may still be able to, but you’re not going to get as good a rate because you don’t have as much equity.  And then you might have PMI on top of that.

That’s right.

<Inaudible> but definitely you could pursue it because rates won’t — the fact that you’re going up to 5%, that’s a decent spread.  Usually, you want about a 1.5% spread to make it worthwhile as a general rule of thumb.

And is there any recommendation, or just pick somebody out of a phone book? Or should I try with my lender first? Or —

You know, you could try with your lender first, and I always recommend go to finance.yahoo.com and scroll down.  On the right hand side, you can put in your zip code and you can get the lenders that will give you quotes right off the Internet and they’ll tell you points, etc. in the AP, the annual percentage rate, APR, that you would pay on the mortgage including any points.  So, that’s a good start point.

Once again, what that is, finance.yahoo.com.

And you have to put in your information about your address and —

No no no, you can just put in the loan amount and you can put in the down payment, which in this case would be the equity amount.  So, you’d say your house is worth 250, the loan amount would be 200, and you’ll be able to get rates — quotes right back from local banks and even some online banks as well.

Okay.

Okay?

Alright.

If you have trouble, give us a holler on Monday and we can help you with it.

And what’s your number?

It’s 407-869-9800.

That’s perfect, thank you.

Alright, good luck with that.

Thank you.

It’s 9:46 on News 96.5 WDBO.  Coming up in four minutes we’ll get back to the News Center and Dave Wall who is keeping an eye on the investigation into the police shooting the other day, the murder of the five cops, and of course the protests that have been going on all night last night.

Before we go any further, I want to — we had a correction.

We have a correction.

Social Security Boot Camp —

Nancy texted me <Inaudible>

Not July 18th as it was on our website, it’s the 21st.  So, we apologize for that.  So, again, the Social Security Boot Camp is July 21st, not July 18th.

There we go.

Anywho.  You — we were talking earlier about the treasury yields.  I’ve got a question here from Melissa.  With 10-year treasury yields now closer to 1% versus 2%, is this now the time to allocate more towards equity investments versus fixed income?

Well, that’s a very good question and I would say the answer is no, this is never a good time simply because interest rates have changed and yes, they’re at an all-time low on the 10-year treasury yield, but simply because your low-yielding investments aren’t attractive doesn’t mean you put more money in your higher risk investments.  Now, that’s exactly what is happening.  Obviously, this market has been propelled in part because the options are very little elsewhere.  You make 1.3% on a 10-year treasury yield, 10-year treasury bond, you’re likely to want to shift more money into the equities, but equities are now trading on a forward looking basis at about 18 times what they earn, and historically that’s more along the lines of 15 or 16.  So, it’s not — those aren’t cheap either.  So, unfortunately we have stocks that aren’t cheap and we have treasuries that are not cheap, and it’s because the demand for our treasuries has gone crazy because 1/3 of all global bonds, I was reading in today’s Wall Street Journal, are actually negative.

Negative interest rates.

So, why wouldn’t the US Treasuries have a <Inaudible>.  So, anyway, do not change your portfolio allocation simply because your low-yielding investments are yielding low rates.  It’s not a good thing to do.

Here’s another text.  Can you take another refinancing question?

Sure.

Sure.

Okay, I’m thinking about refinancing my house.  I’m recently divorced and have the house financed in my name only for 30 years.  27 years left, but I’m only 55.

You are 55, so 27 years is kind of a long way when someone is 55, so they can accomplish that two ways, right? They could pay off additional principal if their interest rate — we don’t have the info on the interest rate on that text, but if the interest rate were favorable, it may not make sense to refinance because of the closing costs.  You’d want to look at how much you’re saving with the interest rate because that 27 years left, you could shorten that to a 15-year mortgage probably by paying on average about 400 to 600 extra toward principal.  So, refinancing is not always the answer.  You really want to take a look at what you’re saving in interest.

It’s an Ask the Expert Saturday morning on News 96.5 WDBO.  My name is Kurt and this is On the Money, brought to you by the Certified Financial Group in Altamonte Springs.  With us in the studio for the past hour, Gary Abley and Joe Burt, the Oracle of Orlando.  And in a minute I’m going to give you — well, Joe’s going to give you the telephone number and the connection on how you can get yourself a complimentary consultation with any of the 12 certified financial planning professionals with the group.  So, Gary Abley, the next bear market, how to prepare psychologically and fiscally.  So, what are we in now? Are we in a bear market or are we in a bull market now?

I wish the records <Inaudible>

Yeah, we’re in a bull market.

We’re in a bull market.

We’re at, certainly a peak, but really if you go back and look at a couple years ago, we really haven’t moved very much.  We’ve been fairly flat for about two years, but we certainly are in a bull market and this bull market is looking a little bit long.  It’s over seven years now.  The last bear market ended in March of 2009 and so this is a good time to check the stomach and to check your allocations.  So, for example in 2013, if you had started out as a balanced investor and you were 60% in equities, stock mutual funds, and 40% in fixed income, if you did nothing that year at the end of the year your allocation became 80/20 because the stock market went up over 30% and fixed income was relatively flat.  And if you still did nothing and you’re sitting on that same portfolio and here we are in 2016 several years later, all of a sudden your allocation  might be closer to 90/10 because of this tremendous bull market.  So, need to look at your allocations, make sure that you have re-balanced, and are prepared, quite frankly, for the next bear market.  We don’t just have bull markets.  Psychologically, you want to check the stomach, look at what you have done in the past.  Have you sold at a bottom and purchased back at a higher point? And if you have, you may want to check that allocation and make sure you’re investing with your risk tolerance.

Re-balancing is what we do when we manage our client’s portfolios.

That’s right.

We force you to do what every investor should do, and that’s to sell high and buy low.

Sell your winners and buy your losers, which — the other way of saying that is not fun.

Right, but that’s where you take the emotion out of it and <Inaudible> discipline.

Discipline makes for better returns long-term.

Okay.  And what’s this about a relocation guide?

Oh yeah, we’re going to offer free relocation guides to those folks that are new to the Orlando area.  Go to our website, financialgroup.com and we’d be glad to send you a — it’s a very, very well done piece about all the things that you need to know when you move to Orlando, what to look for, and it’s a great guide.  So, go to our website, absolutely free, we’d be glad to send it to you.

Well, and Kurt, I wanted to mention, I don’t know if Laurie is still listening, but one of the sponsors of WDBO News 96.5 is RP Funding and they do offer a no-cost re-fi.  So, if Laurie is still listening, she may want to get a quote from them as well.

2:00 this afternoon.

There you go.

We’ve got Robert Palmer does the show.

Absolutely, great program.

Alright, real quick, I need a yes or no.  Does it make sense to refinance an FHA loan at 4.25% to another, lower FHA loan?

Possibly.

I would definitely say there are some variables there.

Yeah.

Okay.

<Background Noise> go into it, what is it you want to do. <Inaudible>

Okay, we’ve got to get out of here for Dave Wall in the News Center.  Thanks for joining us.  Check out the website financialgroup.com.

The information presented on this program is believed to be factual and up to date.  We do not guarantee its accuracy and it should not be regarded as a complete analysis of the subject discussed.  Discussions and answers to questions do not involve the rendering of personalized investment advice, but is limited to the dissemination of general information.  A professional advisor should be consulted before implementing any of the options presented.  Certified Advisory Corps is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.

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