The Dividend Cafe - Thursday - February 20, 2025

Episode Date: February 20, 2025

Market Volatility and Economic Updates with Brian Szytel Brian Szytel provides an update from Newport Beach on recent market activities. He highlights an increase in volatility compared to earlier in the week, with the Dow down 1%, S&P down 0.4%, and NASDAQ down 0.4%. Despite minor economic data releases, there were no significant market movers. Initial jobless claims remain stable at 219, while manufacturing indexes show positive trends. The VIX is low at 15, suggesting overall market stability. Brian also addresses common questions about their service offerings and the difficulty in providing a uniform track record for portfolios due to their customized nature. He emphasizes the holistic approach of their business, which includes tax planning, estate planning, and financial advice beyond mere investments. 00:00 Market Volatility Update 00:47 Economic Indicators and Jobless Claims 01:12 Manufacturing and Market Sentiment 01:42 Current Market Trends and Metrics 02:49 Understanding Custom Portfolios 03:51 The Importance of Personalized Financial Services 04:39 Closing Remarks and Upcoming Plans Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Brian Zytel with you here in our Newport Beach, California office on what ended up actually turning out to be some more volatility on the day compared to Monday, Tuesday, and Wednesday earlier this week, which have been really essential snoozefests as far as what's gone on in the market. It's been very quiet. So things picked up a little bit today. The Dow is down about 1% even, which is 450 points. S&P was down 4 tenths of a percent, as was the Nasdaq. So some sell-off in stocks. You had a little rally in bonds. Tenure

was down two basis points, closed at 451. So not a huge catalyst in the day on the economic front. There was a couple of data points out today, but not anything that would have moved the market. Frankly, markets go up and down every day. So I don't think that people need to read into this much at all. But initial jobless claims were out in line at 219. Like I've said many times, anything under 250 is fine as far as being balanced in the labor market. So we're still in that kind of low 200s range. That's good. The Philly Fed index today was a little off expectations, but pretty close, close enough, as they say for horseshoes and hand grenades. We got a 219, 215 was expected.

horseshoes and hand grenades. We got a 219, 215 was expected, but that along with the New York Empire index yesterday is a good sign for manufacturing because both of those indexes were fairly positive. So on the economic front, things are fine, I would say. A little bit of volatility in stocks, not a lot in bonds. And the market overall still has fairly low volatility. The VIX is only at 15. There are other metrics that we're looking at, but there's, for example, credit spreads are tight. So things to worry about, but generally markets are tilted towards the positive. There was, like I wrote about yesterday, potentially a new posture with Ukraine.

There's a lack of GOP's consensus around reconciliation. There's still tariffs that we're talking about. There's a potential trade deal that's being talked about with China. And then of course, you still have inflation, interest rates, and earnings. So all those things are a lot for the market to chew through. But generally speaking, things remain positive. They're still about two thirds of the S&P 500 trading above its 200-day moving average. I don't tend to look at those kind of metrics a ton, but it does show some positive breadth in the market

and generally still positive momentum. So year to date, by the way, the S&P is up 4%. So is the Dow and NASDAQ is trailing a little bit up about three and a half. So this is only February the 20th, which means the first call at six to seven weeks of the year have actually been really pretty good when you think about it. If you annualize where we are, that'd be a pretty nice 2025. I suspect we'll get something lower than what that points to at the end of the year. But

nonetheless, moving in the right direction. A question in there, we actually get this a good amount, which is people have interest. We get referred. They want us, they're asking for something that they know to ask for, which is completely normal and common. And we're happy to provide information on the business and the company. But when people ask for a track record, just keep in mind, this isn't a mutual fund company where we're managing one fund for any shareholder that wants to

buy it. In other words, it's not uniform. There isn't a set track record. Everybody's account has a custom portfolio. Some people have X amount in bonds and the makeup of those bonds can be different between taxable and tax free. Some people have 0% in alternatives. Some people have 30%.

All those different percentages just vary. And so you can't really set a uniform track record and just provide it to interested people. There is the dividend equity portfolio that of course trades openly on the New York Stock Exchange that people can look up and we can provide information on that part of it. But that would never make up or almost never, not usually make up the sole amount of what is in someone's portfolio. The business is much more designed around a service offering. It's advice, it's tax planning, it's estate planning, financial planning,

risk management, family office services for those higher net worth people. All of those things are not something that you just put in a track record. Now we have a deck on the company and all those services and what they are and why they're important. And that's the kind of stuff that we like to provide to people is to focus on the forest versus some of the trees. The trees might be some of the investment pieces. We do a very good job at them.

Of course, it's the core of the business. But what we are actually doing is much more oriented towards a one-on-one relationship with a client and the advisor and focusing on those other goals. That may sound a little cookie cutter or it's truly evergreen and it comes up a lot. In fact, it came up this morning, which is why I put it in Dividend Cafe. So there you go. With that, I'm gonna let you go for this evening.

And actually, since it's Thursday, I'll be in California here for meetings today and tomorrow, but then heading back out Saturday. So I'll be with you next week on Dividend Cafe. You'll have the long form version in your inbox tomorrow. And I wish you all a lovely weekend. Hope to hear from you. Thank you.

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