Shaking The Leaves Off The Money Tree | Investopedia x RiskReversal

Dan Nathan (0:00)

Welcome to a special and unique edition of the Risk Reversal Podcast. I was very fortunate to be on the Express with my good friend Caleb Silver. He is the Editor-in-Chief of the Investopedia. He also has a live Monday YouTube podcast, and that's what he just printed a couple days ago on their YouTube page.

Go follow that. He is also the author of the Signal from Caleb Silver on Substack. So go check that out here at Risk Reversal Media. We are going to be pushing both of those things because we think they're great pieces of content. We love Caleb. Caleb, welcome to the Risk Reversal Podcast.

Caleb Silver (0:37)

Always good to be here, my friend. I love a little home and away. I have you on my show, I'm on your show. We share each other's sub-stacks. It's good content. I've learned so much from you and Guy over the years, and it's always a pleasure talking to you. And I'm really psyched about the conversation we just had.

Dan Nathan (0:50)

Yeah, right back at you. I mean, you've been coming on Fast Money with us, it seems like forever. And we always appreciate the content that you guys create for Investopedia. You guys go out there, I think it's thousands and thousands in your surveys, and you do that, what, every other month or so?

Caleb Silver (1:06)

We're doing it quarterly now, just to give people a little bit of a breather, because individual investors, we survey them every quarter about what they're doing, how they're feeling, what they're doing with their money, what they're worried about. We don't change the way we feel or even change what we do with our money that often, but there are some things like, whether it's Fed meetings or geopolitical events that make us think twice about how we're investing, and we love to capture that.

Dan Nathan (1:26)

Yeah, I think that sentiment is really interesting from everyday investors. You and I spend a lot of time talking to people, obviously in the financial media, but also institutional players. So really hearing what a lot of the people, and we know that a lot of retail investors are making these markets in many, many different themes. So I'm always appreciate that. I just want to highlight the fact that, A, we've been doing this stuff together for a very long time. And you and I, going back to the conversation that people are going to listen to right now, we covered a lot of stuff. We have bank earnings this week. We have economic data, CPI, PPI, and really the Fed and how that's setting up. We talked a lot about AI and really agents and what that means for the space. We talked about the tech build and how it's being financed. So great, great conversation. I really appreciate Caleb having me.

I appreciate the fact that you guys, if you didn't check out the Express on Investopedia's YouTube channel, it basically streams every Monday at 10 a.m. So go follow them and check that out. And obviously, the signal from Caleb Silver on the sub stack, a lot of great content there. So go check that out too. Caleb, thanks for having me and thanks for joining me here.

Caleb Silver (2:37)

Thanks for having me. It's always a pleasure joining you and having you on my shows here. Shout out to Risk Reversal.

Dan Nathan (2:42)

All right, thanks, Caleb.

Caleb Silver (2:45)

On the Express this week, we can shake it all we want, but at some point we're going to see there's going to be no more money left on that money tree. Stocks and bonds keep diverging, oil prices keep surging, small caps are hurting, Risk Reversal's Dan Nathan is certain that something's got to give. Things aren't what they seem. It costs more than $5.3 million to afford the American dream. Happy birthday to the bull. You're turning four this week. A battle tested in bull bovine. This ain't no market for the meek. Throw a bell around her collar. Dig those spurs in deep. The Express is live from the 505

This road runner needs a beat.

Welcome back and welcome aboard the Investopedia Express live and direct from outside of Santa Fe, New Mexico, the 505, my hometown. Let's go.

Good to be with you all. I know you're joining from all over the world. So drop a comment, chime on in. Good to have you with us on the Investopedia Express, no matter where we are, but we are in studio, Santa Fe, Studio B, Santa Fe. Glad to be with you. What a gorgeous day it is here in New Mexico. What a beautiful state, and what a beautiful time of year. October, we love it here. Markets starting off the week, a little choppy, oil prices surging. We got Brent crude now above $105 a barrel, putting pressure on markets. It must be a Monday, because we've been getting this narrative, really, for the past several months, and the war in Iran continues to rage on, and now there's so many different complications, pushing oil prices up with them, pushing treasury yields up with them as well, putting pressure all over the market, although we've been having these breakout days where the S&P 500 is either hitting or touching records, and the NASDAQ is surging to new records behind the strength of those big tech and AI stocks. Investors just don't want to let go. And now we have the divergence between the 10-year yield in the S&P 500 and an all-time high. In other words, yields driving higher, treasury prices going lower, and the stock market up near record highs. Usually when you have this much pressure in the treasury market and you get yield surging, you get a big breakdown in the stock market. Not this time around. Investors just don't want to give up on their favorite stocks, and those stocks have been powering the market for months, years, it seems. And this whole notion of the 60-40 portfolio, all the old rules of investing that we've been preaching for years, and I'm one of them. I've always been talking about a balanced portfolio, a nice glide path as you get older to settle into a little bit of more conservative investments. Forget all that. As I just wrote on the sub stack on the signal from Caleb Silver, which is on value add on sub stack right now, we got to break up with the old rules of investing. Break up with the old rules of investing. I'm 55, I've broken up with them completely. Yeah, I got bonds, but I have bonds strategically placed in my portfolio. To maximize the yields we've been seeing lately, not to take it easy. I need growth, I need gains, so does everybody else. You've got to lean in to the stock market, and you've got to lean in to the growth part of the stock market, and you have to invest max if you possibly can. Coming up this week, I'll be talking about invest maxing, how to really drive your returns through various methods and various accounts where you can get more than one retirement account and investing account going at the same time. Create the flywheel effect, but this whole 60-40 portfolio has really been dead for a while because the bond market has been in a bear market for years, and I don't see that changing anytime soon. Hello from Albania. Good to have you with us. You know what I'm talking about. Hello from South Africa. Good to have you with us as well. Love to have you all on the conversation from around the world, but this is the scenario. Stocks or nothing right now. You want to chase yields, you can, and I'm doing it with short-term bonds. We're doing it with investment-grade bonds in our accounts. But boy, oh boy, if you have been sitting back at a target date fund, and you're my age, or you're 35, or you're 25, and you didn't elect to put yourself in the stock market in large cap growth and in big tech, you have been missing out. And where are we now? Right in the middle of a four-year presidential cycle. If you just widen things out, I don't really care who's in the White House or not. These presidential cycles, especially as we get towards the midterms, really start to pick up steam for the stock market after the midterms. You're gonna hear a ton of volatility and a lot of headlines and madness over the next few weeks. It's gonna get ugly. But after the midterm election, especially when we're in the second half of the presidential cycle, the stock market usually delivers good gains. And sometimes that is because of the composition of Congress and the Senate and who's in the White House. But usually when you have some sort of a gridlock there, you have maybe one party in president and one party in the executive branch and one party in the Senate, but maybe the other party run in the house, you get that kind of gridlock and investors know what to expect, which is a whole lot of nothing. It's usually good for the stock market. Don't know what's gonna happen this time around. I just know we're in this cycle right now where things usually get better after November, and we are in the strongest six months of the year in terms of the stock market. So you kind of gotta hang in there, even though it seems a little wild right now. And speaking of wild, happy birthday to the bull.