A Gentle Guide Through Market Moves

Our 2 Cents – Episode #209

A Gentle Guide Through Market Moves

On this episode of Our 2 Cents, we strap in for a wild ride through the stock market—exploring the twists and turns of market timing—plus some quick-hit thrills that’ll have you thinking bigger than ever. Tune in now using a link below!

1. Stock Market Clarity:
   • How do you navigate the ups and downs of today’s uncertain market?
   • The Lewits provide insightful advice for riding out market volatility and highlight the silver linings that can present better opportunities.
2. Gabriel’s ‘Quick Hits’:
   • Explore the stunning features of the Burj Khalifa Penthouse for sale, which might just make its sky-high price tag worthwhile.
   • Universal Orlando Resort is unveiling a brand-new theme park, taking its immersive worlds to the next level—are you planning to make a stop on your next vacation?

Request Your Free Consultation Today
847.499.3330

Podcast Transcript

Announcer: You’re listening to Our 2 Cents with the team from SGL Financial, Building Wealth for Life. Steve Lewit is the President of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news trends, strategies, and more.

Gabriel Lewit: Welcome back, everybody. It is time. I know you’ve been awaiting it for Our 2 Cents.

Steve Lewit: Anxiously awaiting.

Gabriel Lewit: I’m kidding.

Steve Lewit: Sitting on the edge of your seats.

Gabriel Lewit: Yes. We always, of course, love to rally fourth here to talk about all things finance, money, retirement, and provide you with information that we think is helpful and valuable for you, especially when the markets are continuing to be a little bit turbulent. So, we’re going to touch upon that here, just briefly here today.

Steve Lewit: Roller coaster, it is.

Gabriel Lewit: And in that theme, we’re going to talk about a brand-new roller coaster/theme park that’s been diligently being built for many years here that’s going to open up in Florida here in May that you’ll be interested in. We’ve got a lot of other great topics for you as we try to always do. Would you say?

Steve Lewit: I would say.

Gabriel Lewit: All right.

Steve Lewit: I can hear the people cheering in the background. They’re off their seats.

Gabriel Lewit: I don’t know what’s going on in your head though, but that’s great.

Steve Lewit: They’re off their seats and up. Cheers are coming our way.

Gabriel Lewit: Well, a couple of quick tidbits for you, so I don’t want to spend too much time on this because we have talked about it quite a bit, but the stock market has continued to be a up and down roller coaster since the “Liberation Day” tariffs were announced, I believe, last Wednesday, about a week and a half ago. So, the best thing you could probably be doing, folks, is not looking at the news in the stock market.

Steve Lewit: That’s exactly right.

Gabriel Lewit: All it is going to be up and down. If you know you’ve built your plan the right way, as many of you have, I’ve actually had many calls from clients saying, “Gabe, just to let you know, I’m good.” Interestingly enough-

Steve Lewit: Isn’t that interesting?

Gabriel Lewit: … they’re calling me or emailing me saying, “Hey, just so you know, we’re good. I’m glad we set up our plan the way that we did.” A couple calls here and there from people wondering, “Are we still okay?” Then we have a quick review to make sure, yup, we set your plan up precisely for this purpose or a couple inquiries. How’s our portfolio doing? And by and large, at least with us here at SGL Financial, if you’ve worked with us, we’ve built your plan, your portfolio in a way where this volatility tends to have a much decreased impact or effect than what you’re seeing on the news with the pure S&P or the Dow or the other things that are going up and down like a roller coaster.

Steve Lewit: Well, it’s the same message, Gabriel, that we’ve been telling people for years. The market is a long-term investment. What you are banking on in the market is over time. It goes up.

Gabriel Lewit: Well. To that end, one thing I wanted to mention, of course, is if you have any concerns about the ups and downs that we’re having, give us a call. But also there was a very interesting article that I read, which I don’t have in front of me, but just use as a kickoff point that was talking about how the level of trading activity inside of a 401k has reached record highs. Actually, this was the day before the market spiked 10%. What it was saying is the vast amount of flows were going from US equity funds into stable value funds or bunds. Do you know what a bund is?

Steve Lewit: Yeah, a bond. The Bunds.

Gabriel Lewit: Funds and Bunds.

Steve Lewit: Bunds is the German currency.

Gabriel Lewit: Funds and Bunds, bonds and bonds.

Steve Lewit: Funds and Bunds.

Gabriel Lewit: Stable value funds and bond funds.

Steve Lewit: That’s a new theme park we’ll have out in the backyard here.

Gabriel Lewit: I sometimes combine words. So, bond funds are now bonds.

Steve Lewit: Bonds. I like it. So, take a hard look at your Bunds.

Gabriel Lewit: Yes, exactly. Well, here’s the challenge. What’s the problem with that, right? The market’s down, let’s call it 5,000 when this was happening down from say 6,000 a month or two ago. All of a sudden, people are selling their money out of their stocks, their stock funds into their bond funds or into cash. What’s the problem with that?

Steve Lewit: Well, the problem is when the market goes up, you’re in bonds.

Gabriel Lewit: You’re in bonds.

Steve Lewit: If you’re in bonds, you are not picking up the hot market.

Gabriel Lewit: What’s the number one rule? It’s the simplest one, right? When you’re in the market, you want to buy what and sell what?

Steve Lewit: Let me think. I think I prefer to buy low and sell high.

Gabriel Lewit: Yup, exactly. So, when the market drops a thousand points-

Steve Lewit: That would be selling, let me think, selling low.

Gabriel Lewit: No buying yet.

Steve Lewit: Missing the buy on, getting back in when it’s high.

Gabriel Lewit: So, I just wanted to point that out there. What was interesting is the very next day, Trump announced his tariff reprieve and the market shot up 10%. If people had the day prior put all their money in bonds, right, or cash, they would’ve lost out on that recovery. Now it has pulled back a little bit since then and they might end up being proven right in their minds if the market continues to slide trading into cash or bonds.

Steve Lewit: Yeah, no, wait, wait.

Gabriel Lewit: In the short term, it can feel good, but I’m going to explain the problem with that.

Steve Lewit: All right, you better.

Gabriel Lewit: So, let’s use a hypothetical scenario here.

Steve Lewit: I’m going to call you out on this.

Gabriel Lewit: Market drops. I’m not saying it’s a good thing. I’m talking about why it’s a bad thing to be clear, right? So market’s at 6,000, drops to 5,000, you sell to your bonds or cash.

Steve Lewit: Let’s just stop right there. Why do you sell? Because fear takes over and you think it’s going to go down further and you can’t tolerate it anymore. You say, “I got to get out.”

Gabriel Lewit: Okay, now here’s what happens when this happens. Why? Because I’ve seen this many times with other people there. We have the luxury of having talked to thousands of people and getting to collect some data from that. So, now let’s say that you’re in cash and you’re saying to yourself, “Well, I’m going to buy back in when? When is this person going to buy back in?” They sold to bonds.

Steve Lewit: As soon as the market bottoms out, I’m going to buy back in. That’s the logic.

Gabriel Lewit: Most of the people selling, by the way, are not trying to be active traders. They’re just scared.

Steve Lewit: They’re afraid. Look, we run from fear as human beings.

Gabriel Lewit: So, I would actually argue they’re not going to say they’re going to buy back in when it bottoms out. They’re going to buy back in when they’re confident that it’s not going to go down anymore in their minds or going back up.

Steve Lewit: Yes. That would be bottoms out.

Gabriel Lewit: No, not necessarily, right? This is why I’m using use this example. Market goes down to 4,500. Does that person that’s now in bonds or cash buy back in at 4,500?

Steve Lewit: I don’t know because it depends on what you just said.

Gabriel Lewit: Here’s why they’re not going to, because they’re conservative, not market timers, right? They’re going to say, “What if it keeps dropping?”

Steve Lewit: Exactly.

Gabriel Lewit: So, they don’t buy in, but let’s say 4,500 was the bottom, which we don’t know in advance where it is. They missed it because they’re worried it’s going to go down more and then it roars back up to 5,200.

Steve Lewit: Yes, sir.

Gabriel Lewit: What happens then? Let’s pause right there. That person says, “Okay, well, it was down at 4,500, it roared back to 5,200. Are they going to buy in at this point?”

Steve Lewit: No.

Gabriel Lewit: Why not? You’re correct.

Steve Lewit: Because they’re going to say, “Well, maybe that’s just a blip. It’s probably going to go down again.”

Gabriel Lewit: Yeah. I’m not sold yet.

Steve Lewit: I’m not sold yet that this is really a recovering market.

Gabriel Lewit: Correct. Correct. Too short term.

Steve Lewit: Too short term.

Gabriel Lewit: Let’s say that they’re wrong and the market was bottomed out and recovering and now the 5,200 goes to 5,600.

Steve Lewit: Yes.

Gabriel Lewit: This is all happening, say over six, seven, eight months. What do they do then?

Steve Lewit: They stay put.

Gabriel Lewit: Well, let’s just say at that point they decide, okay, maybe I’m ready to buy back in. Just bear with me.

Steve Lewit: Okay. Okay, well let’s say they do.

Gabriel Lewit: Okay, so they’re at 5,700.

Steve Lewit: And they buy back in.

Gabriel Lewit: Let’s analyze what happened here. They sold at 5,000, right? They bought back in where?

Steve Lewit: At 5,700. That’s called a bad move.

Gabriel Lewit: That’s called you lost money, right?

Steve Lewit: Yeah.

Gabriel Lewit: Yeah. So, this is what happens, right? Human behavior, consumer psychology, investor psychology takes over. Unless you’re an aggressive market timer, you’re probably not doing… The moment’s at 4,500. An aggressive person’s going to say, “This is a discount, I’m going to buy in there.” A conservative person’s going to be worried it’s going to keep going down more.

Steve Lewit: The aggressive person will say, “If I buy here at 4,500, it’s really low. If it goes lower, so what? I’m already buying low, I’m not going to worry.” Well, they’ll put half their money in at 4,500 and wait and see what happens, but they won’t just hold tight and not do anything.

Gabriel Lewit: By the way, I’m not advocating that you sell the cash and try to buy back and lower it.

Steve Lewit: No. Because here’s the other side of the story, Gabriel, is that it goes up to what, 5,500 now? Now you’re thinking, “Wow, it’s too high now. I’m not going to get-”

Gabriel Lewit: I got to wait for it to go lower.

Steve Lewit: I got to wait for it to go down.

Gabriel Lewit: Before I get down back, it’ll probably go back another blip.

Steve Lewit: So, four years later, you’re sitting in your buns and haven’t made any money.

Gabriel Lewit: And folks, I’m referencing this example for two reasons. One, this happens.

Steve Lewit: It really happens.

Gabriel Lewit: It really happens, right? And there’s so much data that says people that try to time the market or sell when market volatility exists and go to cash lose out in the long run. This is exactly why.

Steve Lewit: They lose their buns.

Gabriel Lewit: The second thing that I’m bringing this up is there’s thoughts out there, and I’ve read these because I read a lot of stuff that a good financial advisor, this is false by the way, should be telling you when to get out of the market and when to get back in. That’s false.

Steve Lewit: We meet lots of people and that come to us and they say, “I’m unhappy with my current advisor.” We asked him, “Well, what are you unhappy about?” Well, the market went down and they didn’t tell me to do anything. How do you tell them you should be happy with your advisor?

Gabriel Lewit: No, in fact, he was doing his job if he told you not to do anything.

Steve Lewit: Exactly.

Gabriel Lewit: Yeah. Because look, the advisor that’s going to tell you, he can tell you when to get out and when to get back in is not telling you the truth. He’s just guessing.

Steve Lewit: Well, then the next logical state-

Gabriel Lewit: It is very speculative if you do that.

Steve Lewit: … that I hear often is, well, what am I paying him for? What are they paying him for?

Gabriel Lewit: To tell you exactly not to do that.

Steve Lewit: Exactly. They’re coaching you.

Gabriel Lewit: That decision could have just saved you hundreds of thousands of dollars by not selling out too low.

Steve Lewit: Exactly.

Gabriel Lewit: And you’ll never be able to quantify that because you won’t see it on a statement somewhere. But that decision to not sell, if we can guide you and coach you on that path, and this is all under the assumptions of the side note, you already have a really good plan in place. If you have no plan, you should have an advisor that gives you a plan.

Steve Lewit: You should have an advisor to get you a plan. But it all goes back to human nature, which is we like short-term satisfaction, and in the market, that don’t work well.

Gabriel Lewit: The other reason psychology wise is there’s proven data that says the fear of losing is stronger than the pleasure of gaining.

Steve Lewit: The joy or pleasure of gain.

Gabriel Lewit: Okay. So, people react to that. I just wanted to mention that because I’ve had a couple of questions from people saying, “Should I sell, should I get out?” I’ve had these conversations one-on-one with a number of clients as I know you have too, dad. So, we wanted to talk a little bit more specifically about that today as opposed to last week where we were talking about what was causing it, the tariff situation. Here’s how you react in a down market and timing is usually going to be a losing endeavor for the vast majority of people.

Steve Lewit: So, what would you say to many of our clients and not our clients that are sitting on cash? They’re fortunate enough. Maybe they sold the property or they’ve accumulated cash. If you’re sitting on cash today, how do you play this game?

Gabriel Lewit: Yeah, so turning the tables a little bit here. If you happen to have money in cash and the market is down, there’s some similar psychology. I had a client just the other day, because there’s two types of conversations we have in down markets. One’s from nervous clients asking if they should sell, which no, we covered that. Others from aggressive clients saying, “Hey, I’ve got money on the side, should I buy in?”

Steve Lewit: What do I do now?

Gabriel Lewit: But here’s what’s funny. They want to wait for the bottom to buy in.

Steve Lewit: Exactly.

Gabriel Lewit: So, we’re having similar conversations, just reverse, right? They’re saying, “Gabe, are we at the bottom point right now?” Which what would be my answer to that?

Steve Lewit: Maybe.

Gabriel Lewit: I don’t know.

Steve Lewit: I don’t know.

Gabriel Lewit: So, what could you do? You could dollar-cost average in, you mentioned this earlier. You buy in some now. You’re buying at a discount. If it goes down further, you put in some more. If it goes down even further and you’re out of money to put in, well, at least you still put some in at a discount. It’s like if you’re buying a shirt 25% off and then the next week that same shirt’s 33% off. You buy it one, you buy two shirts, and then it happens to be a month later it was 50% off.

Steve Lewit: Okay, pick up another one.

Gabriel Lewit: Maybe you pick up if you have more money, right?

Steve Lewit: Exactly.

Gabriel Lewit: But it didn’t mean the first two were a bad deal. You couldn’t have known that the shirt was going to be on 50% sale in a month from now.

Steve Lewit: Yeah. It’s hard for us to imagine we cannot control this. We want to control it, we want to fix it, we want to know the future, we want to make the right bets and so on. But if you’re betting in the stock market, that’s not investing. That is betting and that’s very different.

Gabriel Lewit: It’s very risky. It’s actually more aggressive even than just holding an aggressive portfolio.

Steve Lewit: Exactly. When you’re betting, you’re super aggressive.

Gabriel Lewit: So, people think going to cash is more conservative. It’s actually even more aggressive form of investing called market timing-

Steve Lewit: Exactly.

Gabriel Lewit: … which is what I am trying to, I guess, express here in our show.

Steve Lewit: So, it’s the old rule, Gabriel. If emotions come into your investment decisions, just don’t do it. If fear is driving your decision, it’s a bad decision. It’s just that simple.

Gabriel Lewit: Now I want to say one last thing about this.

Steve Lewit: I thought the last one was the last thing.

Gabriel Lewit: Well, I just thought of one more last thing. If your money is super, super critically tight and you are actively at the point where you’re starting to withdraw money and you happen to be in a very aggressive portfolio that you shouldn’t have been, there could be the tiniest bit of a plan to de-risk some of your money. Because if you are actively taking withdrawal, let’s just say this is start of an extended bear market. We’re talking 2001, 2002, 2003. Market was down three years in a row. That’s where your plan comes into play.

If you really are tight on money and you actually are starting to withdraw big sums from your portfolio at this point and this is the start of an protracted bear market, you want to have a plan for how you’re going to accomplish that. Staying really aggressive, losing even more while withdrawing money is the worst combination of things. So, there’s different scenarios here that can apply that will sometimes change this logic. So, it’s not a one-size-fits-all, but again, that would be not a market timing decision. That would be a plan reallocation that’s done very strategically with just the amount that you need to last you through what would be a protracted bear market.

Steve Lewit: That’s based on logic and numbers and not on emotions. If you’re tight, you’re not fortunate enough to be very wealthy and that money is in the market and you need that for income, it’s logical to say to yourself or to your advisor, “Hey, should I de-risk this a little bit, even though the market is down?”

Gabriel Lewit: But that’s different than the 40-year-old in the 401k that doesn’t need his 401k and can’t even touch it for 20 years. That’s selling to bonds or cash.

Steve Lewit: No, don’t do that.

Gabriel Lewit: Today that’s very, very different. So, I just wanted to walk through some of those scenarios. All right. Any last comments you’ve got on that, Mr. Lew?

Steve Lewit: No, I’m just sticking with the bonds. I love that, an acronym.

Gabriel Lewit: Bonds and sons.

Steve Lewit: Bonds and sons.

Gabriel Lewit: All right. If you’ve got questions for us here, give us a call 847-499-3330 or go to sglfinancial.com or email us info@sglfinancial.com with your questions. What should I or should I not be doing in these down market times? We’re happy to answer those for you.

Steve Lewit: Exactly.

Gabriel Lewit: All right.

Steve Lewit: All right. Good job.

Gabriel Lewit: Okay. A little minor interlude before we talk about our second main topic for today. The first is if you’ve got a little extra money on your hands.

Steve Lewit: Yeah, I was considering this.

Gabriel Lewit: In particular, you would need approximately… Hold on here.

Steve Lewit: $51 million.

Gabriel Lewit: Oh yeah, $51 million. If you have an extra $51 million on hand.

Steve Lewit: Well, yeah, there’s more to it than the-

Gabriel Lewit: Well, I was going to say, you can buy the Burj Khalifa penthouse, which is the Burj Khalifa is the world’s tallest building. You can buy that for $51 million.

Steve Lewit: Only 1,300 feet off the ground, 21,000 square feet. Guess what, for the $51 million, guess what you get?

Gabriel Lewit: What?

Steve Lewit: A shell. You get cement.

Gabriel Lewit: It’s unfinished.

Steve Lewit: It’s unfinished. So, you probably have to put in another $10 million to finish the darn thing.

Gabriel Lewit: Now it was interesting, there was a picture of this, which you’re not going to be able to see. That was showing a person that was on this penthouse in the right weather conditions would see nothing but clouds below them.

Steve Lewit: Well, it is in Dubai. I don’t know how much clouds they get.

Gabriel Lewit: No, I think this was a real-

Steve Lewit: It was a real picture. Yeah.

Gabriel Lewit: Meaning if it was a cloudy day, you’d be above the clouds looking down, you couldn’t see anything but clouds.

Steve Lewit: That would freak me out. Could you live in-

Gabriel Lewit: I wouldn’t be able to live there.

Steve Lewit: I couldn’t live there.

Gabriel Lewit: No way.

Steve Lewit: On the top of a needle.

Gabriel Lewit: You’ve got to be able to feel that swaying, right?

Steve Lewit: Oh yeah, definitely. I can’t imagine doing that.

Gabriel Lewit: You couldn’t pay me $51 million to live up there, I don’t think.

Steve Lewit: Yeah, you could. Think about that.

Gabriel Lewit: For a short amount of time.

Steve Lewit: Short amount.

Gabriel Lewit: Yeah. So, anyways, apparently, it includes a private elevator and an indoor swimming pool up on the 107th floor.

Steve Lewit: Yes.

Gabriel Lewit: Yeah. That’s weird. How do they do that? That’s crazy to me. The only thing a buyer cannot do, they said, is add another bigger swimming pool due to weight.

Steve Lewit: Oh, that’s just terrible. I won’t buy it if I can’t add a bigger swimming pool.

Gabriel Lewit: Yes. For your $51 million and your unfinished penthouse, you also get access to the amenity package, which includes a lounge, fitness center, spa, infinity pool, and a co-working space, because I’m sure you’re going to co-work with others when you can afford a $51 million space.

Steve Lewit: It should include a massage every day.

Gabriel Lewit: Oh, you also get 12 parking spaces for your cars.

Steve Lewit: 12?

Gabriel Lewit: 12.

Steve Lewit: For your cars. Oh yes.

Gabriel Lewit: Okay. All right. So, yeah, just wanted you to be aware of that. Apparently, it’s received the most interest from USA-based sellers or buyers. Sorry. They’ve provided some nice renderings of what you could do with the space. So, basically they say you’ll feel like you’re floating above the city or up in the sky. Yeah, if that’s for you and you got $51 million, now you know.

Steve Lewit: Good. Take a look.

Gabriel Lewit: All right. Now one last thing-

Steve Lewit: You like this?

Gabriel Lewit: One last thing, apparently there’s-

Steve Lewit: He’s really stuck on this property.

Gabriel Lewit: The penthouse isn’t the tallest floor in the building. There are actually 50 additional floors above it. Well, that’s crazy.

Steve Lewit: I thought it was on the top floor.

Gabriel Lewit: The top residential floor. A number of these stories hold maintenance facilities and corporate offices. Oh, gosh. I wouldn’t want to be 50 floors above that.

Steve Lewit: So, we need an office in Dubai.

Gabriel Lewit: It says at the atmosphere is the tallest Restaurant in the world located on the 102nd floor. The observation decks are on the 124th and 125th floor.

Steve Lewit: Folks, you can tell there’s a little part of Gabriel that he would like to have this property.

Gabriel Lewit: No, no. Have you seen a movie called… I think it’s called Fall, where these kids climb up like a really tall cell phone tower or something.

Steve Lewit: Two young women, right?

Gabriel Lewit: The way the cinematography is done is enough to make you-

Steve Lewit: Scared the hell out of me.

Gabriel Lewit: … feel like you’re on the building and you’re going to fall off.

Steve Lewit: It’s not a building, it’s just a pole.

Gabriel Lewit: Just little pole. Yeah, sorry. So, yeah, I don’t think I could live up there. I don’t have an extreme fear of heights, but I have a fear of really, really, really, really tall heights.

Steve Lewit: I’d never go near the window. Yeah.

Gabriel Lewit: Yeah. All right.

Steve Lewit: Well, keep that in mind folks. Let us know if you need help. We can put you in contact with the real estate agents.

Gabriel Lewit: Yes. Now moving on, for those of you with kids, grandkids, and a desire to travel and see theme parks. I’ve got our next really cool thing to share with you here. So, basically, Universal Orlando Resort has opened or will officially open its third and newest theme park, Park Epic Universe-

Steve Lewit: I saw pictures of this.

Gabriel Lewit: … on May 22nd and it is the first major theme park to open in Florida in 26 years.

Steve Lewit: Yeah. It’s supposed to be amazing.

Gabriel Lewit: Yeah. So, listen to this, guys. I’m actually really interested in this because my wife and I were talking about maybe taking our kids to Disney and I don’t know. I haven’t taken them yet because my youngest is five. When she was younger, I thought it would be difficult and she wouldn’t remember it. So, we were waiting. But it’s so expensive, it’s so crowded, and I’m really interested in this one.

So, let me explain this to you here and then maybe this is something you decide to do with your family. So, here’s how things enter. You go through a fluorescent green fog tunnel and shrouds of clouds, right? People walking through a Wizarding World, Floo Network, transit tunnel to be greeted on the other side by an atrium with soaring ceilings depicting moving storm clouds to right out of the movie Harry Potter and the Order of the Phoenix.

Steve Lewit: Well, there are four worlds here.

Gabriel Lewit: Very distinct worlds. Every time you’re in one, you feel like you’re in the world.

Steve Lewit: They say you can’t see any other part of the park. So, you’re in that world. It’s like an immersion into that world.

Gabriel Lewit: At 750 acres, it’s believed to be the largest theme park in the world and estimated to have cost up to $7.7 billion to build. Somebody here that’s essentially a theme park service consultant named Dennis Spiegel says, “I’ve seen them all,” referencing all the theme parks around the world. “Epic Universe,” he said, “is too darn good.” Too darn good.

Steve Lewit: No. Let me ask you a question. Do you go on the rides like the roller coasters?

Gabriel Lewit: I assume they’re there for people to go on them.

Steve Lewit: But would you go on them?

Gabriel Lewit: Oh yeah, I’d go on roller coasters.

Steve Lewit: Really?

Gabriel Lewit: Yeah, heights-wise that doesn’t bother me. The 124th floors of building, I can’t do.

Steve Lewit: So, they have a trackless roller coaster. What is that?

Gabriel Lewit: Trackless roller coaster? I have no idea what a trackless is. It’s levitating with magnets.

Steve Lewit: I don’t know. I was trying to figure that out. Can you look that up, a trackless roller coaster?

Gabriel Lewit: Where did you see that? I don’t think I saw it.

Steve Lewit: It’s buried in there. I did see it.

Gabriel Lewit: Yeah. Well, anyways, so let me just explain the quick worlds for you. Okay? Okay, you enter these different portals, right? You’re in How to Train Your Dragon, the world from How to Train Your Dragon, first of its kind. You’re in the video game world of Nintendo. You’re in the Harry Potter Wizarding World, and you’re in the world of Universal Monsters called Dark Universe. So, basically, as you mentioned, there’s four different worlds here and apparently there’s super immersive and they of course spent oodles and oodles of billions of dollars on this.

You have all sorts of different elevators like horizontal elevators, roller coasters, what they say advanced-like robotics that they’ve ever seen. So, all sorts of really, really cool stuff. Kid-friendly boat ride in the midst of an elaborate Isle of Burke where dragons breathe fire and ice. So, apparently there’s lifelike flying dragons going through the sky.

Steve Lewit: No, listen, listen to this, Gabriel. The Harry Potter ride feels like an experience combining elements of universals existing Spider-Man ride and Disney ride of the resistance. It features trackless ride systems, augmented reality, and high-resolution projections combined in new ways.

Gabriel Lewit: Now, I don’t know. Well, your guess is as good as mine. Now pricing-wise, this isn’t too much less… It’s actually comparable to Disney pricing. Some people might do Disney and this new theme park. Some might just do this. There’s multi-day packages. There’s express passes, of course, allow you to get through lines and things faster.

Steve Lewit: Two hundred bucks maximum I think is the max you could spend.

Gabriel Lewit: Yeah, I think, well it’s 250 with the express passes, it says here, right? So anyways, apparently, Disney and Universal are continuing with their theme park boxing match. In case you’re a big Disney fan, maybe check this one out as well.

Steve Lewit: Yeah. Do you know which theme park is the most visited in the world?

Gabriel Lewit: I do not. Do you?

Steve Lewit: It is the Orlando Disney.

Gabriel Lewit: Yeah, I believe it.

Steve Lewit: Yeah. You’ve got to take your kids there. Every kid has to go to Disney World.

Gabriel Lewit: I think their grandparents should take their Grandkids there.

Steve Lewit: They’re building the basketball court. You have to explain what that means.

Gabriel Lewit: No. Well, you’re not, so I’m not going to explain it.

Steve Lewit: Well, I might.

Gabriel Lewit: I’m thinking about putting in a little mini basketball square court/pickleball thing in my backyard.

Steve Lewit: Guess who he’s lobbying to pay for it?

Gabriel Lewit: For your grandkids.

Steve Lewit: Hey, dad. We’re not going to get to that article.

Gabriel Lewit: No, we’re not. Okay.

Steve Lewit: Can we do it next time?

Gabriel Lewit: Yeah, we can definitely… I mean, we keep running out of time here. I actually decided to expand as we were talking. I realized there was more to say about the markets and how to approach that. So, actually, let me circle back to that because I have a lot of thoughts on that. Then we’ll do spring-cleaning next time.

Steve Lewit: And how to treat your adult children.

Gabriel Lewit: Yeah, we didn’t do either of the other two articles we were going to, which means we got a lot already lined up for the next show. What’s another thing you can do with the stock market being down?

Steve Lewit: Drinking is always good. Alcohol helps.

Gabriel Lewit: You could drink wine and alcohol-

Steve Lewit: Drink wine and alcohol.

Gabriel Lewit: … to feel better.

Steve Lewit: Celebrate your good fortune.

Gabriel Lewit: You could also explore doing-

Steve Lewit: Be thankful.

Gabriel Lewit: We talked about buying in. Also, it’s a good time if you are in the phase of your life where you’re doing Roth conversions.

Steve Lewit: Oh, yeah. Yeah, good one.

Gabriel Lewit: This is a good opportunity to do a Roth conversion while the market’s down. Let me give you an example for you folks. So, let’s say you had 100 shares of stock X at $100 a share. You’d have $10,000 of that stock. I’ll just use easy math examples. Or maybe we do 1,000 shares. So, it’s $100,000. Let’s say you wanted to convert this to a Roth IRA and it was $100 a share. You’re in the 22% tax bracket. That would cost you $22,000 in taxes to convert those shares. You still have the same 100 shares, the price rebounds the year later. All right. You would’ve converted all that money to Roth. Let’s say it was at $100 a share, not a bad option, right? Let’s say the market was up a couple months ago and you were going to think about doing a Roth conversion.

It still would’ve been a good idea. If you’re doing a Roth conversion, it still has to be a good idea. Meaning your current tax bracket on conversion would be lower than your future expected tax bracket if you didn’t do the conversion. If I’m going to not convert today and in the future I pull out the $100,000 at a 30% tax bracket, it would’ve been better to convert it today at a 22% tax bracket and then be forever tax-free growth from there. But let’s say the market’s down temporarily to $80 a share. So, I now have $80,000 in this stock and I convert the 1,000 shares. You with me?

Steve Lewit: I’m with you. I hope everybody else is with you.

Gabriel Lewit: Instead of owing $22,000 in taxes, I would owe 22% on an $80,000 conversion, which I think is 16,000 in change. I converted the same 100,000 shares. I save $6,000 in taxes.

Steve Lewit: Yeah, it’s a huge discount.

Gabriel Lewit: Which makes it a much lower effective tax rate if you can do a conversion that you otherwise would’ve planned to do temporarily while the market is down. So, this is a good opportunity to do that. So, keep that in mind. I was doing this with a client walking through this. There’s different ways of doing Roth conversions, either cash-based conversions or share-based conversions. In this example, you really want to do a share-based conversion. If this is something that you have interest in, is it right for me? Is it the right time? How much would it cost tax wise? We can help you navigate that and calculate all of that together.

Steve Lewit: Yeah, so what you’re really saying, Gabriel, in the bigger picture is that when the market’s down, there are other opportunities to look at other than… Nobody likes to lose money. I certainly don’t. But there are opportunities when the market goes down in terms of tax harvesting or Roth conversions.

Gabriel Lewit: You buy in lower with cash on the sideline.

Steve Lewit: Buying in low.

Gabriel Lewit: You can do tax loss harvesting if you have taxable accounts that happen to be negative from a cost basis perspective. They have capital losses. Yes, you can do Roth conversions temporarily while the market’s down. The only thing I don’t suggest is market timing. But what you could do is you don’t have to have money in cash either. Let’s say that if you are a more aggressive investor and you happen to have some money in bonds for whatever reason, you could also sell your bonds and buy cash, right?

You’re selling bonds while they didn’t lose value much, and you’re buying something at a much lower value. This could even be a temporary move and you could rebalance yourself a couple years later. That’s a more aggressive move going from bonds to stocks. But again, it’s not pulling money out of the market. That’s where you’re truly getting into market timing and we don’t condone that.

Steve Lewit: If you’re thinking of any of these things, folks, I really urge you to get counsel either from us or from somebody. It’s hard to negotiate all of these fluctuations in the mark. I think the reason is there’s so many emotions behind it. There’s a lot of contentiousness with the political system.

Gabriel Lewit: Can I mention something on that?

Steve Lewit: Sure.

Gabriel Lewit: There was a really interesting report that said, I mean basically if you were a Trump supporter, you weren’t worried about this current market downturn. If you aren’t a Trump supporter, you’re very concerned about the market downturn. So, it’s interesting because this is obviously a market downturn, but also, it has some political leanings and affiliations based on your preferences there. So, we try to strip all of that away and just say, “Okay, market’s down, what can we do with that?”

Steve Lewit: Exactly.

Gabriel Lewit: But yeah, let’s look at this very factually, regardless of politics. Don’t freak out because the market’s down. Don’t make panic decisions. Look at the opportunities and the silver linings that are available to you and then call us for guidance and counseling so we can really help navigate you through this.

Steve Lewit: Yeah, so it’s taking… What’s your favorite phrase? It’s how to make lemonade? Well, no, you have the squeeze and the juice.

Gabriel Lewit: That one doesn’t work in this scenario. Is the juice worth the squeeze?

Steve Lewit: But the other one is how to make lemonade-

Gabriel Lewit: Lemonade out of lemons.

Steve Lewit: … out of lemons.

Gabriel Lewit: That’s not my phrase.

Steve Lewit: Yeah, you’re the juice and the squeeze guy. Well, I hope these juice was worth the squeeze, folks, for you on this podcast.

Gabriel Lewit: Yes, of course. If you have questions, call us 847-499-3330. Call us anytime. If you have friends or family members that want to talk to us, also let them know that we’re here. We’d love to talk with them. You can also email us info@sglfinancial.com or go to our website, sglfinancial.com, and click contact us.

Steve Lewit: I’m going to see if there are any hot buns in the oven, in the microwave.

Gabriel Lewit: Bunds?

Steve Lewit: Bunds.

Gabriel Lewit: Bunds. Yes.

Steve Lewit: All right.

Gabriel Lewit: Well, good luck to that.

Steve Lewit: Thank you. Thank you.

Gabriel Lewit: All right, guys. Have a wonderful rest of your day. We’ll talk to you next time.

Steve Lewit: Stay well, everybody.

Gabriel Lewit: Bye-bye.

Steve Lewit: See you.

Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at 847-499-3330 or visit us on the web at sglfinancial.com and be sure to subscribe to join us on next week’s episode.

Prerecorded Voice: Investment Advisory Services are offered through SGL Financial, LLC, an SEC Registered Investment Advisor. Insurance and other financial products are offered separately through individually licensed and appointed agents.