Hello and welcome. I'm Austin Root and on behalf of all of us at Stansberry Asset Management, thank you for joining. With me today is Senior Wealth Manager extraordinaire, Kimberley Threadgill. Kimberly, thank you so much for joining us. Happy to be here, Austin. Thank you. Yeah, no, this is going to be great because your clients know you very well, but maybe for the benefit of the rest of our clients and the future clients that are watching this video, you know, maybe give us a little bit of your background. Sure, sure. So I'm in New York City, originally from Houston, Texas. And I have about 15 years and in finance, 10 years specifically in this role, holistically advising clients. Of course, down the way, I had about nine years of running my own business and grew up in a family deeply into real estate, specifically in the Texas area. So and I've continued to be involved personally in that space as well. Awesome. And I also know that you spent some time in Atlanta, Georgia. So if you had if you had a last meal, would it be food from New York, food from Texas, food from Atlanta? What would you choose as as as a favorite meal? Oh, golly. That's tough. I don't know. I mean, if we're talking about barbecue, that's going to be Texas. You get a Texas barbecue. Yeah, barbecue. But, you know, variety, got to say, New York's got variety. So lots of great stuff here. Good. Well, thank you again, Kimberly. This is a really I thank you all at home. This is we're going to make great use of your time. This is an important topic that we have that we're going to go head to head here on, Kimberly. And that is, gosh, which is more important to your wealth, the investments that you own or the financial plan that you put around those investments? I think we could spend we could spend hours on this, but we're going to cram this into probably roughly 40 minutes and then leave lots of time for Q&A, live Q&A. This you'll hear me say I'm a bunch. And so the folks will know this is truly live, live, Kimberly. And we're going to try to stump each other. But most importantly, get to a lot of questions. We already have a good queue of questions in the in the box. We're rolling up my sleeves for this. What's that? Rolling up my sleeves. Yeah. Here we go. Here we go. Right. You know, we are combating. We're going against March Madness right now. And so all of you that have tuned in and not are watching the basketball, I appreciate it. The the Houston University of Houston is in this tournament. Is that is that your favorite, Kimberly? Nope. No. OK. Well, interestingly enough, UVA. Nice. I really and that's not I'm not just saying that because of you. I just think the coach is amazing. Yeah. So, yeah, that's we're pulling hard for them. For folks viewing. I did go to University of Virginia undergrad, went to Stanford Business School. Stanford didn't make it. But my oldest is at UVA. So doubly reasons to be rooting for the Cavaliers as we go along. All right. Look, let's let's hit this super important set of points. I think given the the movements in the market, though, before we hit this and say stocks versus financial plan, let's let's talk about what's going on in the world. A number of the questions that we've had already relate to some of the volatility that's going on. I think the first thing we need to talk about is the the conflict in Iran. Kimberly, what are your some of your clients? What are the questions they're asking? Are they concerned? Kind of what what are what are you hearing? Well, you know, I think that it's super important when you start working with clients that you kind of get a sense for how reactive they're going to be, because that's going to have a lot to do with their risk tolerance and their long term view. Right. So a lot of our clients are very good about staying the course. And in retrospect, in retrospect, when you look at the clients who have taken that long term view and stuck with their strategy splits along that, you know, regardless what's going on with markets, understanding they're actively traded anyway through our team. Their returns have been relatively much better than clients that are reacting, jumping in and out of strategies because of things that are going on. So we don't haven't received and knock on wood here, but haven't received a ton of concern questions. I think about it. Recognizing there's a could be some change along the way. We may be due for that. What do you think? I mean, what's what are you doing on your end with all this? Yeah. You know, I had the great benefit of talking to clients to more so that time is you and your team. But it's really helpful. We've got some really interesting entrepreneurs and folks that are involved in different parts of the world. And so it's great, you know, communicating with those those folks. In addition to business leaders and and the companies that we own and the executives that we own, of the of the firms that we own. Here's what I'd say. And you've heard me say this and our clients have heard this. We came into this year with high expectations for future growth. Multiples were high. The asset prices are reasonably high. And so it was a market that's not going to do well with disappointments. When fourth quarter results were announced, they were by and large fantastic. You can have some question marks about the level of guidance and some conservatism. But by and large, the growth that we needed to push for these markets higher, we're getting and really impressive. The productivity gains that we're getting overall in the economy and then also the stocks that we own and the companies that we own are just generating pretty strong economic activity. The conflict in Iran is putting a hiccup in that. You know, I think it's you'd be hard pressed to find someone that's upset with a tyrannical regime being ended. And, you know, and so I don't want to get into that part of it and whether it's justified. But how do we deal with this? I think our view is longer that this goes on, the the the more challenging it is to the inflation picture. So it will push oil prices are going to push their work their way through the system and have a challenge on global GDP. So all else equal, our expectations are, you know, inflation a little bit higher this year. Growth may be a little slower. But having said that, we've really we've massively reduced Iran's capabilities at this point. We've really demonstrated the strength of the U.S. military and U.S. force. Things will eventually get back to normal. And we have not yet gotten to the point where we're concerned about the long term issue or long term growth of of the economy. So what you and I have talked with Kimberly's long answer, sorry, is we're actually as some as some investors, to your point, are making these short term moves based on short term information. That may be to their detriment for the long term. So we're we're inverting that or and actually elongating our view and looking to say so long as the long term outlook hasn't been altered for this business. Can we find an opportunity to buy some world class businesses as people are getting concerned? And what I would say on that is our team has our shopping list ready and we've done some some nibbling. But it's not that you remember the old game show where you you could go into a toy store or a grocery store and you got two minutes to grab as much stuff as you want. We're not there yet. We're not there yet. We've got our shopping list of what we are going to buy, but we're just kind of grabbing a few things. I think that's kind of the approach that we're having right now. The other concern that's really taken a little bit of a backseat, but I think people is still on people's minds is artificial intelligence. And what will A.I.'s impact have on the overall economy, on individual investments and then maybe, you know, on our daily lives? What do you hear? Anything you're hearing there that you would like to share? Well, I think, you know, obviously it's been talked about a lot. And, you know, when we get the questions about A.I., I think that was more we heard a lot more of that last year. That sort of trickled down. It's lessened more so this year because I think most of our clients have heard that we are participating in that space. It's pretty hard not to. Right. So I think when what we've what I've seen is how well our strategies are doing with the volatility. You know, it was volatile. The markets were volatile last year. I think it's certainly stepped up a bit this year. But it seems as though our strategies have have been doing relatively well in spite of all of that. Yeah, I think that's right. I know. I do think that the initial questions, maybe we're getting more of those last year. What I what I'm observing, though, is the the median investor that is has gone from a little bit more thinking about the opportunities related to A.I. to the threats related to A.I. this year. You know, there's more questions about which industry or business is going to be displaced. I think that's fair. This is an incredibly pervasive and A.I. is general intelligence and it can do so many different things. So it's it's worth thinking this through. And there will be companies and industries that are challenged. I think where we're still coming out is it will be a productivity enhancer. And. That more businesses will do more with the same rather than cutting headcounts and mass. There's going to be so much more demand and driven by, you know, by the increase in productivity and increase of output by some of these businesses. I'll give you an example. You know, most folks are worried about software as a service. Would will these SaaS companies be crushed by A.I.? And while we do think there are pockets of SaaS that are not going to be as valuable, if you have a very structured if you're just kind of basically piling data that compiling data together, that's readily available on the Internet, that can be done so much more quickly with A.I. than some software you can develop. But there are more job openings for software developers right now than there were a year ago. In other words, the demand for software keeps going up. And so if you know, we're finding opportunities to be in the right software. But again, just nibbling right now, not going backing up the truck. Just a couple more of these that are hitting people for questions. And so we just got two questions on it. A couple of seconds ago. And that is that's gold. So what are your I've shared my thoughts on gold, but what are your thoughts on gold? Kimberly, I know we have a gold strategy, as you know, that that did incredibly well last year for folks. Very well. What are people? But but now, you know, today gold's off quite a bit. And if you bought gold at some points this year, you might be down on it, particularly to some of the gold miners. Are you are you hearing any concerns there? Do you have any concerns yourself? Thoughts? Well, again, you know, it goes back to the intent. You know, we were talking to clients about why are you interested in gold? If it's just because you're chasing something that's already run up so much, that's not a good enough reason to be investing in that space. You know, what we look at with gold and, you know, we have 10 different strategies. And that is a very narrow scoped strategy, which is rare. We should. Well, I know we'll talk about that later on. But of the 10, there's only two that are quite narrow in what their holdings are. One is treasury, which is going to be T-bills as treasury. Right. And the other is gold. Right. I mean, it's all just that. So it works great as a hedge for something bigger. Right. For something that's invested somewhere else. And so when clients are calling and saying, oh, gosh, I really want to be in this. It's like, well, you are how long and for what's your what's your expectation? Because if you're expecting it to run up another over 100 percent net of fees, I mean, that you can't guarantee that's going to happen. And you're you may be disappointed. Right. So if it's a long term reason. To hedge against your overall portfolio where advisors are happy to talk about it, find the appropriate percentage. Yeah, 100 percent agree with that. So if you know, we had a kind of a first webinar of the year in January where Michael and Mario, the deputy chief investment officers, Mario, Valente, Michael Joseph joined me. And we kind of set this up and said, we are big advocates of gold to be used as a store of value, as a diversifier in your portfolio to lower your overall portfolio correlation. And then also as a chaos hedge. But we reminded folks how long for how many years, decades, gold can go into lulls. And it's not every year that you see the returns that we had last year. I think some folks, clients came back to us and said, why don't you like gold? And we do like gold. But again, it's use case. It's a superior store of value to the fiat currencies. It's been tried and true. It's the only sort of reserve currency that's or currency that's lasted for for millennia. When things it tends to move differently than other things in the market. And so we that's why we think it's a good diversifier. And then, like we said, it's a chaos hedge. Now, question. It's been a little bit weak here relative as we kind of have a little chaos in the Middle East. Is the police coming to pick you up there, Kimberly? It's New York. What do you want me to do? I'm sorry. No, all good. But in all seriousness, the question is what's going on with it? And what I would say is there has been some momentum built into gold where it was going up on up days and it was going up on down days. I think some of that momentum has been pulled out. But I think we're at a point now where the investment case is still valuable for gold. So it's still a superior store of value. We are still going to see profligate spending across all the central banks and governments. And so if we see the money printing and debasement of fiat currencies and we see central banks leaning in, we still expect that to happen and own more gold. In that case, we think it has a great place in your portfolio. Let's see. Maybe with that, I see a list of questions. I want to get to them. Why don't we then switch and go to the main event here? And the question is, which is more important, investment management or the stocks that you own or wealth management or your financial plan? And I'm going to throw this to you to answer first. Kimberly, what say you? You already know what I'm going to say. Clearly, financial planning. Clearly. It's incredibly important. I mean, when you think about stock picking and trying to find the right stock that's doing the right thing all the time, that certainly has a place in everything. But you also have to think in terms of as you're investing over time, what are you doing this for? And do you have a plan for once you've built, you know, continue to build your wealth and you're able to look at what retirement may look like? Even the best of most organized clients, they can look at what their cash flow is going to look like for maybe five years. Right. But a financial plan. And again, people have a certain opinion of what a financial plan is. You could just do a cash flow analysis, which still takes a lot of data to create. But you're getting an idea of what does what does your cash flow look like in year 10, year 15, year, you know, assuming everything is the same. Expenses are the same. But we have a built in inflationary component. What are those expenses actually look like? Not changing just because naturally things go up. And then what's coming in? And more importantly, that other expense that you can't forget, which is taxes. What does that look like based on what your income sources are? Right. And that changes a lot. So that's a really important part of as we're building wealth for clients, what are we using this for? Coupling that together, that holistic advising is, I think, incredibly important. Right. We got to know where you're going and where you are and how to get there before you actually get there. And I agree that's important. But here's a counterpoint. OK. Let's think of the story, the fable of the three little pigs. Now, you may not know this about the three little pigs, but the pigs that had the one that built his house out of straw was actually the best architect. He was actually the best with his own plan. He knew exactly how to design that house perfectly. But he had terrible ingredients. He had terrible stocks in his portfolio. And the one that had brick house, you know, it was kind of sloppily built, but it had bricks. And he was the one because he had good investments. It mattered what you owned and why. Now, look, could he have done a little better with, you know, making some of the corners nicer? But, you know, in all seriousness, I think. I think you're watching this story. I need to go back and read this book. It's been amazing. Yes. Well, the wolf blew the house down for the hay, the straw house and the ones with sticks. But because they didn't have good materials, the investments you could put together. In other words, you can put together a great financial plan for someone. But if the investments you own are lousy and they lose you money, then what was good was that whole plan. Good point. Good point. That would be my counterpoint that you've got to own. In other words, you go to a nice steak dinner and you have a nice cabernet. But if the steak is shoe leather and the cabernet is skunked, it doesn't matter what you put all around the thing. Well, yeah, I think what you're saying is it makes a lot of sense. We might have lost Austin for just a minute. But granted, yeah, I do get the good point is that that investments do matter. And so does financial planning. That'd be good. There you are. All right. We lost you for just a second. Apologies for that. But here's what I would say. Since you think it makes sense, why don't we invert it? This was our plan all along. I don't know what you're going to say. But what would be your pitch then if you were to say investment management? What might you say on that? Oh, I mean, I think when it comes to investment management, one of the. I go back to what we're offering clients and tactical select is great. I mean, I think that particular strategy is the best of both worlds, you know, in terms of allowing for growth. But having, you know, you're having trade stops later on these all of the equities. And so you're kind of mitigating the the volatility. I mean, I don't know. I just think that's very special to what we offer clients here. I think it can be tricky, honestly. And after tax accounts, just because you have you can you could in certain scenarios, obviously have a lot of trading. Right. And up to rate, you know, stopping out of a lot of things. So but that's that's my that's the first thing that comes to mind. Thinking about investment management and some of the best things I've seen with it. So we've you've seen some good performance and it's it's been it's been helpful. Here's what I would I would say in defense or in support of what mattering most is actually the financial plan and the wealth management is that we like to say on on my on the investment team. Gosh, every investor has one as some combination of just three goals. They want to. Get rich or richer, they want to stay rich or protect what they have or they want to live rich or generate current income off which they can live well. And so we structure our strategies with those goals in mind. But really, it's the wealth manager that can take those individual strategies and tailor it to the client such that they actually can meet their goals. It's not just the goals, it's your time horizon. So we I'm talking with you and other fantastic wealth managers about working through with clients to understand, OK, yes, you may be, you know, nearing, you know, getting up there in age. Maybe you're an octogenarian. But this capital, you've also told me that you don't need this capital. You have a nest egg in addition to what we're investing that is going to be plenty for what you're for your life. So we should think of this capital as legacy capital in the future. So let's elongate our time horizon and start thinking about what are the goals for your the capital for this for your kids or your grandkids. And that can be so impactful. The other thing that I'd say is, you know, you've given me examples and I'd actually like you maybe provide an example where the financial plan itself has opened up the eyes of your clients on to do something different, completely different. And actually say, OK, well, actually, this is important. We need to structure something this way. And then finally, you mentioned taxes. So I will mention taxes. We can be we the investment team manages on the basis of the investment case and is tax agnostic. However, taxes can have a huge impact in on your on your after tax or actual returns. So your team can be so helpful with folks in figuring out how to do that the most optimized way. And so that's what I would say is why it's more valuable. Makes sense. Do you have an example of something where you could say where, you know, you kind of getting in with someone really kind of changed kind of the way they were thinking about the world? It happens all the time. I think when we have so many clients that come to us that have traded on their own for years and more often than not, there's one person that's in that whether more or not, there's a couple. And one person is the one that likes to trade and they're more involved in that space. But what you find is that over time, either they just don't want to do this anymore. They want to free their time up to do something else or they start to get a little bit later in years. They're thinking about their life and their family beyond what happens when they can't do this anymore. And so when they come to us, we're looking at, you know, what are their their goals? What's going to happen in the long term? And more importantly, especially in the case of, you know, one person, one spouse surviving the other. We want to look in terms of does that change materially what your portfolio should do? Right. Because for so long, so many clients, they have a more growth focused portfolio. Then at some point you want to shift it. Maybe it needs to be more income producing. But a lot of clients have saved a lot in tax deferred accounts. And it is not unusual for me to see that a client is going to have a six figure required minimum distribution. That's one hundred thousand minimum in taxable income that they're going to get slapped with in their 70s. Well, if that's now going to be more than enough income for them at that stage in life, then maybe we want to start to pivot that portfolio. That was maybe more income producing at that point. Looking ahead, saying, let's pivot that to something a bit more, maybe capital appreciation. But regardless if that's the case or not, more tax efficient. We don't need income producing in your portfolio being taxed at your federal marginal tax rate. Right. Alongside now six figures more of taxable income. So we're always working with clients trying to stay a step ahead. The worst is finding out after the fact and trying to pivot quickly. Yeah. And I think that that really is a good dovetail into our actual point here. The big reveal is that really both of these things are absolutely mission critical to generating wealth. Both the investments that you own and the financial plan that you build to decide exactly how to own those things. And in fact, I'd go one step further, Kim. And that is that the investment process is better only when the wealth process, the wealth planning process is done well and vice versa. I feel like you've told me, you know, you're you can do your job better that you're confident that our team is is doing our job well. Oh, gosh, it's infinitely easier when you guys are doing as good a job as you are. I think that was I've said this more than once. So I didn't know how well SAM was doing in terms of performance until after I joined during interviews never came up. But it really I think that our investment committee is very strong and and that's rare. I don't see that often in the industry. You know, we're an RIA. And in this space, you see a lot of folks that I think may be very strong on the planning side of things. But then they're investing their clients in mutual funds, which by principle back in my Morgan Stanley days was like once you have a certain level of wealth, you don't need to be paying to keep the lights on anymore. Right. Yeah, no, I think that's great. I mean, and if I could add on that, I I think that it is it is a great service to our clients that we're so good at both of these things. You know, the investment world has bifurcated. And so the in in there are the stock picker. So the T row prices of the world that that spend all their time on the investment management piece and they build ETFs and mutual funds that like you noted, mostly mutual funds. But they don't really have any contact with the end client, the investor on that's actually utilizing those products. And then on the other side, you mentioned Morgan Stanley. There's there's the wealth advisors doing a fine job. Well, a nice job with the with the financial plan, but isn't necessarily involved with exactly how the the the funds are being invested for which they're getting paid for. They're utilizing the T row prices for that. What a novel concept to bring those things both back together. And that's what Sam does. But importantly, as a client and our clients, you get both of these things. You get world class worth wealth management and you get my team focused on investment research. A hundred percent versus in many RIAs, the head of the firm is trying to do both of those things, plus trying to do business development. And so, you know, I think it really works well for us. I'll give you one example for my team of how and I don't know if I've ever mentioned this of how the wealth managers really helped us on the investment team. It is through communications with you and you and your clients and Tom and other guys, folks on your team that we understood the importance of really having kind of a strategy. Really, really, have your cake and eat it to strategy, but more of a balanced strategy that could participate in upside for markets, but really reduce risk and lowered volatility on downside in markets. And frankly, we had there was some appetite from clients and prospective clients to use trailing stops for a strategy. And so that is how when our team started doing research on trying to do both of those things and really trying to bring in quantitative investing and marrying it with qualitative fundamental investing. And that's how we got you mentioned tactical select. Yeah, that's what we've done with it. And we're really proud of how the results, the three year results are. You know, we talked about it in our clients. I'm sure could echo this prospective clients. It's doing what we wanted to do. It's outperformed the market by a little more than three and a half percent a year over the last three years, which as you compound, that's really important. But more importantly, it's done it at three quarters of the volatility of the daily beta or volatility. And most importantly, less than 40 percent of the max drawdown over that period. You know, people don't remember, but the market dropped 19 percent from top to bottom last year around Liberation Day. And this tax credit select dropped about seven percent. So that is to your teams that we have this great product and strategy to offer folks. I don't know if it's a good time to bring up the alternatives, too, but I think that that's another significant factor of what makes what we do different. But, you know, I think it's it is something that a lot of clients have wanted or needed and certainly accredited investors at a certain level are looking to have that. And the fact that we do both. Yeah. And do I think have done very well. So good. Now, actually, it is a great time to do it, because our last thing that we're going to do before going to questions is talking about other, you know, integrated interactions that we've had. You know, I've done presentations to a lot of folks and I now use one of and you do presentations, a lot of folks. And I now use one of the charts that you created in many of my presentations. I know you use a chart that I created in many of your presentations. So, yeah, why don't we go and you can talk about the chart that I that you like. And so maybe I'll put I'll set this up and then you can kind of go into it. But it's all about, you know, why is it's really sort of answering that question that many folks have. Why is not losing money so vastly and vitally important to trying to grow your portfolio? And, you know, the first piece of this that's not related to the chart, but kind of we talked about is that big losses when you have big losses, they really limit your ability to make the best long term investment decisions. They can be emotionally limiting, as we've talked about with clients. Like, you know, it's happened where I'm just I just don't want to lose any more money and I'm tired of losing money. So I'm going to pull out of the market right now. I talked to many clients that did that around the global financial crisis at really the bottom. And they were sitting in cash when the market moves higher and really to the detriment of their retirement. It can be financially limiting because sometimes if you're, you know, in a situation where you're over levered or what have you, you're just forced to sell because you've hit losses. And so avoiding those losses is hugely important from a financial perspective. But then the part that I think you've talked with clients and I'll hand it over to you is that it's actually mathematically very hard to recover from large losses in your portfolio, more so than people appreciate. So, right. Should I set this up or do you want to, I'll hand it to you. I'm going to try this. All right. But if I don't do it right, you can jump in. This is your slide after all. But this is essentially two investors with $100,000 that they're investing over the course of time. Right. An investor A has, you know, good years. Those good years, the portfolio is up 40 percent. Bad years down negative 20. So simple average return of 10 percent. Whereas investor B, it's good years, bad years, same thing. It's just kind of rocking along about the same 10 percent simple average return. But then when you see over the course of 20 years what that $100,000 can do with that bigger variance, you know, just a lot more volatility throughout the years. And you're ending up with, you know, still triple the money, not bad, over $300,000. But investor B, by mitigating those swings, has almost seven times the amount of growth. So there's a slide that comes up after this, and it talks about, you know, what the difference is between the compound average return. And I think that's where you see the numbers really show up. I mean, investor A has a compound average return of 5.8, whereas investor B, that compound average return is 10 percent. I mean, it's notable. And, of course, I'm thinking about one of our tactical selects and kind of leaning towards that. But then I've asked this, posed this to you, you know, and just curious, because I think there is something to be said about forever. I think it is a very good strategy. It has a history of doing well. I also think it's more tax efficient for after tax portfolios. So when I see this, I love this, but it shouldn't mean that that forever is not a great strategy. I'm convicted in seeing that it is. So how. Yeah. How do I talk about those two? OK, yeah. So, Kimberly, for those donors are talking about our forever strategy, which is just owning the world's best businesses essentially forever. So long as we continue to think that they're not just today's best businesses, but tomorrow's best businesses as well, and that they traded a reasonable multiple. Let me just back up one second just on this chart. I think it's important that investor B is that blue line. And the further you go out, the more important it is. You know, the simple average for both of these is the 10 percent. But compound is really what we care about. What at what average annual rate does it equate to? And so we want that number to be highest. That's what we always talk about when we talk about our returns. So that that really is is what you're going for. In other words, investor A only made six percent, but they did it steady every year. They still would be better than their simple average return of 10 percent. But with these big ups and downs. So so when we compare our forever to our tactical select, yes, I would expect the simple average on forever to be higher, materially higher than tactical select, because it won't because it will have big ups, bigger ups and downs. And tactical select will have the smaller. But what the way we evaluate both of these is on that compound annual growth rate. And for both of them, I think it's going to be really, really strong, perhaps over the long run, maybe even stronger for forever. But to your point, it may it won't have the draw that it may have larger drawdowns and tactical select could be a sleep, a better sleep well at night strategy on taxes. It is true that. And you've done and you've talked about this with your clients that bring in some IRA money or retirement account money and some taxable money. Maybe the taxable money is more suitable for forever where we generate lower realized gains. Yeah, realized gains because we're not trading it as often versus in tactical select. If the market changes, the momentum changes, there may be a little more velocity in that in that account. And so maybe it's more suitable for a retirement account. Great. So this is your chart. This is my chart that you use. And I want to show your chart that I use. And it really gets back to what you were talking about in terms of alternative assets. And this is a chart that a lot of financial advisors talk about, which is on the bottom on the X axis is the volatility that you can expect over time in your portfolio, meaning the moves up and down on an annual basis. And then the annualized return that you can expect on an average annual basis at varying levels of of fixed income and equities. And so that orange line in the middle is sort of the traditional 60, 40, 60 percent stocks, 40 percent fixed income. You can see that if you raise the stock level and lower the fixed income, you are low raising your your average return. But you're greatly impacting your your volatility and the risk of loss. But when we add alternatives to this, something great happens, something magical. They talk about the holy grail where not only have we raised our average expected annual return. We do that, but we've done it in a way that actually lowers volatility. So you've actually jump shifted the return profile and we call it northwest investing, where you're moving your your risk or your expected risk and return up into that northwest quadrant. It's great when it happens. And I like talking about this. This is data. This is realized data from Bloomberg, Faxet and S&P and J.P. Morgan over the last three decades. And the question I think that many people have and I know you get from clients is, well, how is this possible? How can alternative assets actually do that? And for me, it's it's two reasons. One, there is an illiquidity bargain in order to generate those returns. You are sacrificing to do it right. And the only way that we know to do it right, you need to sacrifice liquidity for part of your portfolio. And that is to get in to the institutional grade investments of these alternative assets and be OK owning something kind of five, seven, in some cases longer. But I guess I would throw it back and say, OK, think about this. And actually, over time, these are this is the data, you know, it really has produced excess return on an annualized basis being in these alternatives. But, you know, I would say if if two things were equal returns and one was liquid and one was illiquid, no one would pick the illiquid vehicle. Liquidity itself has so much value to it. So it really does need the illiquid assets of alternatives really do need to generate a higher return in order to justify giving up illiquidity. Now, what what we've talked about and what you've talked about with your clients is that's a valuable thing to give up. So you really only want to do it with part of your portfolio. Well, that too, I think when you deal with especially generational wealth where there's you'll see in the alternatives a lot more. It feels like it's de rigueur in that space. And you just now I mean, stocks are going to not always be up every year. Bonds are the same way. So when you are dealing with generational wealth where there's a family that's living off of their assets while still trying to grow those assets, ideally having that alternative part of their portfolio that's creating these distributions that are pretty regular, albeit their capital is not liquid, that helps to offset the illiquidity that can come from stocks being down for a given length of time. So it creates that overall sense, even though the stocks are just as volatile as they've always been. It creates an overall sense that it's less volatile in terms of the impact on the client. Right. And well, and here's the other piece to that. Yeah, you're allowing, you know, it's almost a forced illiquidity to get through it. But I also think it broadens your base of investments and that this is the part that I, you know, I talk about lowering your correlation all the time. We want to lower the correlation of the assets that we own across our portfolio such that when one thing's up or sorry, such that when one thing's down, it's not everything is down. Something else can be ballast and be up on that. The great benefit of being an alternative assets and in private markets is there's so much of the world that actually is in the private market. I throw this chart up and most folks are really shocked that big companies, companies with $100 million or more in revenues, only 13% of those are public companies. The vast majority of those are privates. And by investing alternatives, we broaden our investment base and we have an opportunity to invest in things like that. One more thing I'd point to before we get to questions. And that is, and this is, this comes to the point of what I talked about before, these, these investment goals that are tailored. We have investment strategies that are tailored to individual goals. And then they get more tailored to an individual investor by utilizing a wealth manager like Kimberley. And, and we have ways to really lower the correlation and do all those things. Even in addition to alternative investments, our gold strategy does that. It is a lower correlation strategy. Our tactical select and our all weather are ways to reduce your correlation. We focus very much on those strategies to doing that. So I just want to say that, you know, again, our, our job is, gets part of the way there. And then you can round it out in your team by figuring out which mix of strategies make the most sense for the individual investor. Well, and two, I have to say, just because this is not always the case when we have managed strategies, right? And there are a lot of separately managed accounts and SMAs, UMAs, whatever that you can find. A lot of companies have these, but what is, what I like about what SAM has done is I'll take all weather, because I think that's a really good example of this. Although income too, does a really good job of just finding the alpha without necessarily defining what all weather is by what's in it. In other words, let me try to say that a different way. The mandates allow for a broader, you know, versatility. It's not just this little style box where what's in all weather has to always stay the same, right? What its mandate is, is to protect on the downside. And it can do that. There's been times historically it's been majority in stocks. You know, when bonds were, interest rates were zero. I don't think there were any bonds in all weather at that time. But there's also been times where there's been a liquidation, just given some things that have happened in the markets temporarily. Now I think it's roughly 63-ish, 60%, you know, equities. But there's nothing, say, it has to be in large cap stocks or it has to be. You can just find that alpha wherever you can. And there are strategies within the strategy to protect on the downside using equities and other things, which I think has done very well over time. Yeah, we believe investing is seasonal. And you don't need to be invested in every asset in every season. And so, yeah, you will not see little style boxes for us. They're not international small cap value because there are times when you're not going to want to be invested in international small cap value. It's inevitably going to do poorly in certain times of the market. Yeah, it's just not going to do well. So we're going to go to questions now. Claire, I want to keep the slides up, though, because one of them is interested. It relates to slides that I had prepared just in case people were asking about this. And Carrie asks, business news is focused on private credit currently collapsing or defaulting. How confident are you in our alternative investment fund? And so I want to hit on that. There is I'll have to go through my slides to get to that part. Let me say this, that the headlines are scary for something like private credit. And I'm going to tell you that there are going to be some issues in private credit, just the way there are in public credit and the way there are in private equity and public equities. I want to be clear on that. But there's a certain type of of private credit investments. And what do we mean by that for people that don't know? This is direct lending. This is lending directly to businesses or to assets like real estate, where banks used to do some more of that. And now because of flexibility or banks pulling back or what have you or or being smaller and middle market, there's an opportunity to go direct. So lenders go direct versus going through a bank and intermediary. I think most of the headlines. So the headlines started talking about some defaults when J.P. Morgan was talking about two things. It was tricolor and first brands. These were not even private credit investments. They were actually bank syndicated loans, but they got swept up in the concerns. Now we have what I would call a mismatch of the duration of assets and liabilities. We're actually not seeing that many defaults. What we're seeing is people getting worried about defaults and they've been promised liquidity. So if you think back to my first point was you have to make sure that you're in that if you own an illiquid asset, you are in a vehicle that could hold an illiquid asset. And what they've done in many of these private semi-liquid funds is they've mismatched that where it's long term many year asset like a loan to a company. But then they're promising quarterly liquidity. And that is just we've seen that in global financial crisis. Kimberly, we saw this many, many decades ago. Why are people in the financial world still trying to do things like that? Here's what I would say. The time is very good for private credit. If you think we talked about investing being seasonal, this is actually the environment we want. If we have a closed IPO window with tight lending standards, relatively high interest rates and lots of capital waiting to be ployed. That's great. That's a that's a way better time to be a lender versus a borrower. So it's funny when I hear people worried about private credit, it actually makes me worried about private equity because private credit sits on top. They get paid ahead of the private equity deals that many of which are being financed with that. Think about any company in distress. If it were in distress, would you want to own its equity or would you want to own its senior secured credit? I mean, I think we know the answer to that. So let me just just hit this real quick and then we can get to some of our other questions. This is the traditional mainstream approach to this industry. People are talking about it. You know, so it's it's junior. It's unsecured debt. It's very lower on the capital structure. It's sponsoring these private equity deals in competitive bidding. It's larger deals that are being bid out to many other investors. And then I think most importantly, the manager is focused on deploying lots of capital. You know, our approach and we're so why we're so excited about what we're doing is we're the senior secured debt. We're not junior. We are avoiding those sponsors. We are the strategic capital. So you want to be want to figure out who is providing strategic capital. And so a lot of times we're doing it in lieu of there being a private equity investor. And then importantly, our goal and our manager's goals are to generate high rates of return on the investment, not just to do a lot of of investing in general. So that would be that would be my my explanation on that. Currently, we actually like the residential real estate session. Yeah, sorry. And now I'm going to be slides, Claire. No, I was going to ask you, though. I mean, we aren't just newly getting into private credit. Our funds have been up and running for years. So there's a difference in somebody saying today I want to now I want to go in. I feel like that's yes. Yes, you're right that that ours have been seasoned and and we've got no defaults and things are going great. But contrary to the public opinion, I actually really like I would put new capital and I am putting new capital to work in private credit right now. And it's it's really exciting. I just think residential real estate related private credit is slightly more interesting than the corporate credit at the at the moment. But yeah, that's it. That's a great, you know. Remember that slide you had? I mean, but you do. And I'm totally catching you blind because I meant to talk to you and I bet you don't have it. But you guys used to put up a slide that had the red light and the green light. It talked about what are the factors for this part of the of real estate versus venture capital or whatever. And that was a really great, great way of kind of explaining how, you know, timing what makes sense when you want to start paying attention. Right. To one part of alternatives versus another. Yeah. And in that that red, that red light, green light. That was a fun game back in the day. Did you play red light, green light? But no, but those are still flashing green or yellow for for private credit. And frankly, in my opinion, they're flashing red or yellow for private equity and venture capital. So it's the time to be we think of the alternative investments actually as a way to upgrade the 40 in your portfolio rather than the 60. There are parts of, you know, if we think about the public bond market, I am more concerned about putting a new dollar there than in private credit because the spreads are so tight. We're not you know, you're not going to generate much of a return unless you take more risk. So we like the barbell approach where we own a lot of short term U.S. Treasuries are generating a reasonable return at low levels of risk. And then we can find some esoteric and interesting bonds that are off the run that we do use in our bond plus strategy. So let's see. We've got questions. How about how do we charge for financial planning? And I think that this maybe I'll answer this and then you can talk. You know, the nice thing for us is it's all one fee. You get one investment management and financial planning fee that is really based on the more that you invest with us, the lower that fee goes as a percent of assets. But we're aligned if you're if your assets do well, then we both do better in that regard. I would say this. There are many investment RIAs that have multiple fees or brokers. So we're not a broker dealer. So charge no commissions. And there's not some folks have you pay an advisory fee and then you pay an investment management fee on top of that or they charge you for mutual funds. We don't use those. So, yeah, there's just kind of one fee for both. Right. And I just think a holistic advising is better. It's just it's better. You know, clients. Some, you know, we first when SAM first started, we really weren't doing a lot of that financial planning sort of things. And there are still clients that I talk to that really just don't want to lean in that space. But they'll tell me a lot of what's going on outside of SAM. And then I've got to kind of try to remember it. And it's tough to do. Right. Every time you're talking. So for the clients that that will entrust us with the time, because it's time on their end, too. It's a partnership. You know, that client I'm putting in time. I need you to do that. I need supporting documentation. Why? Because I want to be able to reference that. Maybe you haven't claimed Social Security yet and you're thinking about what's the optimum timing. Well, let me see that schedule. Let me have that because we may decide this now talking. And then in a year or two, something changes. We go back and reference. But it allows us to better advise on strategies. But there I don't think there's any exceptions to that. If we could see these things, it would be better for a lot of folks. They just they're excited. They want to join SAM. They want to just know what they're investing and get going. And that's OK, too. But we would we love being able to take a deeper dive with clients. And we have so many ways to do that now, Austin, more than we have time to talk about here. But I mean, it's changing all the time. Yeah, we are getting a ton of questions about gold and and silver and precious metals. You know, I think the the basis for most of these questions are why? Why is it why they all dropped significantly over the past month when they were doing so well? And then we also have another question. So I'll do both of them. And so then maybe you can come back on the second piece. But now I'll hold off on that. So the first question. So it is really interesting to us. That I would say part of this is the first leg up in in gold and precious metals and silver was doing exactly what we expected, which was providing a superior store of value than fiat currencies. And so as people start getting worried about the dollar or other fiat currencies, capital needs to flow somewhere. And so that was the first piece. Then we learned about central banks also feeling that way, where now the largest holding of central banks is is not short term U.S. treasuries or U.S. treasuries. It's gold. So that's good. And those were supporting. I think they're what was built in over the last couple of months, however, was a little bit of a momentum trade. And so we can look at this in terms of flows. Retail investors did start buying gold because, like I mentioned earlier, it was not only going up as a chaos hedge when markets were skittish. It was going up as a momentum bet when markets were going higher. So I made the joke on one of our investment teams. So our wealth management team meets with the investment management team regularly, and we talked through this. And, you know, the joke was, OK, interest rates go up. Gold goes up. Interest rates go down. Gold goes up. Stocks go up. Gold goes up. Stocks go down. Gold goes up. Like it was just there was continued buying. So it makes sense to me that there's going to be a little bit of a pullback or a reset here because those momentum buyers have lost their bid there. In fact, our tactical select for the first time is now showing many of the gold miners losing, you know, losing momentum. And we did reduce our exposure in one of those. But we still, as a firm, are big believers in precious metals and gold. It will still do those three main things we talked about. Be a better store of value than fiat currencies. Be a diversifier. This is the second piece I want to get you in on. And then also be a chaos hedge. And if things are scary in the world, people will still trust gold. We had a question from Anthony about being new in investment stocks and that he has a nice portfolio of silver and gold investments and bullion. But I think that when we talk with, you know, your team, Kimberly, we do see clients come in that are over indexed to one thing. Maybe they love tech stocks. Maybe they love gold. Maybe they loved crypto or something to that effect. And, you know, I think it's important to know people talk about being diversified as owning at least 15 different assets. But if all of those assets are the same, if you own, if your whole portfolio was 40 different gold miners, you are not diversified. And I think your team does a good job of helping through, you know, someone that those types of thoughts. Oh, inevitably. I mean, that comes up a lot just because we have so many folks that have traded on their own for so long. And that's one person a lot over the course of time picking different stocks. And oftentimes they double down. It does well. They sort of keep continuing to buy. And then before they know it, they've got, you know, a real significant presence and not that many stocks. It's not terribly diversified. So, sure. We deal with that all the time. And it's a matter of knowing where they've been, where are they going? Same thing we've talked about. Where do you want to go? How can we incorporate your strategy, you know, what you have into what we're doing and do that in a very intentional and mindful way? That's a big part of the job. And, you know, one thing about wealth managers is this is a long-term relationship. So we take it very seriously to do right by clients from day one because we expect to be working with them for the long haul. Right. And it's not just a relationship with the key account holder. I think you do a great job of making this a family relationship, right? So not getting to know the spouse. And in many cases, I know we were in an event in Florida where three brothers brought their, each brought their spouse and we got to meet kind of the whole family. We did. And actually I saw he sent me an email. My emails, I don't know that they were, I didn't know they were going to be popping up while we were talking on this. He wants some copies of slides. But that happens a lot. And that's a huge part of what I talk about a lot. You know, I talk with the, typically it's more often than not, it's the husband who's kind of leading the charge on the finances. But opening up that possibility of at least even if the other spouse is not interested in our regular meetings, just knowing who she is and saying hi and just establishing that connection. It's super important and beyond to the next, you know, the next generation. I honestly, I have a number of clients that's multi -generational where the kids are coming in. Those kids are adults, right? They're 40s, 50s, 60s, 20s. And we'll meet with them as well. And their goals, what they're trying to do are very different. But talk about a wider perspective. You know, it certainly allows that because you've met with one person and then now you're understanding the other generations. It is so helpful for us. And that's really gives, it gives me a great deal of joy and, you know, kind of pushes me to enjoy and I love what I do because I think what we do matters. It matters, you know. Well, I think because you do that, it's such a great value for investors. You know, we have so many investors that enjoy doing the investing themselves, but they've made this, they've made the move to us in no small part because of that bringing in their spouse to the investment process. And so that is great because I know you've had examples of spouses, of the, you know, the primary investor passing away. But because you had built that relationship with the spouse and the family, kind of knew where everything was and it wasn't a crisis that otherwise could have been financially. And honestly, it's a very, I've unfortunately or fortunately, depending how you look at this, I've been in that place where I've worked with that surviving spouse. And sometimes the surviving spouse I've never met and, and talking through things and saying, you know what, I know that now a good story is when the spouse has done a financial plan, even if I haven't met the other spouse. And so you are, I am privy to other assets I can help and have with surviving spouses to say, you know what, we, you know, there's an annuity as an example and let's go. And this is kind of the process on what you need to do. They're not going to talk to me, happy to be on the phone with you, but, but it's these processes that, that you, you go through oftentimes because you're on, we are on the short list of people that they call. They don't know and they're grieving. It's just a really hard time to say, gosh, I guess I need to really understand what's going on, you know, and that's, we're here for that. But, but what I try to do, and I know every member on my team tries to do is to expand the conversation so that that doesn't happen. Yep. No, that's right. And, and doggone it, we, and my team can do a pretty darn good job of actually doing the investment piece as well. So I think that's a good way, place to, to end this. We are, we're going to, like, if we go back to the three little pigs, we've got the bricks. We're going to have, make sure you have bricks, but we're going to design that house incredibly well using your team as well. Making sure it's exactly what you want for your family. So Kimberley, thank you for, for your time and thoughts. I think this went pretty well. It was fun. Yeah, good. Sorry to hear sirens in the background. I think that was a couple of times. No, no, it's good. And, and thank you all at home. You, Kimberly, you mentioned one of your clients had already noted that they'd like slides. If any of you existing clients or, or future existing clients, future clients would like the slides, we'd love to share those with you. If you have any questions for us, please, please reach out. I want to make an offer. If you're not a client and would like just a free financial review or a complimentary review of kind of where you're at in the world, we'd love to, to make ourselves available for that. So put your hand up in the questions box. If you'd either like the slides or you'd like that financial review, be happy to get back to you. Any final words? That's all I got for today. Thanks for letting me come today. This was fun. That's fantastic. All right. Thanks. Thanks everyone at home. And, and we look forward to speaking to you soon. Thank you. Thank you.