Fast food restaurants like Wendy’s are experiencing a slowdown in business

The affordability index for people buying a home is the worst in 50 years

The brokerage firm Robinhood looks more like a gambling platform than a brokerage firm

Financial Planning: The Real Cost of Employer Coverage vs. Medicare

When reaching age 65, sometimes there is the option to join Medicare or stay with an employer health insurance plan.  This is most common when a spouse retires after age 65 and they have the ability to join their spouse’s work plan. When comparing the cost of coverage, there is a key difference in how each affects your tax bill. Premiums paid through payroll for employer-sponsored health insurance are pre-tax, meaning you avoid federal, state, and payroll taxes such as the 6.2% Social Security, 1.45% Medicare, and 1.2% CA SDI tax in California.  This is different from a 401(k) for example where contributions are only pre-tax from federal and state taxes. For someone in the 22% tax bracket, a $500 premium would be around $300 after the tax savings. Medicare premiums on the other hand are paid with after-tax dollars and are only tax-deductible for people who itemize and have total medical expenses exceeding 7.5% of AGI, which means very few retirees actually receive any tax benefit. Additionally, Medicare Part B and D premiums may be elevated due to higher levels of income because of IRMAA. Employer health insurance can vary in coverage and cost so at times Medicare may be a more comprehensive and cost-effective option, but it is necessary to compare the after-tax costs to be sure.

Companies Discussed: Cisco Systems, Inc. (CSCO), The Walt Disney Company (DIS), Spectrum Brands Holdings, Inc. (SPB), Maplebear Inc. (CART)

No surprise to me that there’s a glut of apartments on the market 

A 50-year mortgage is being discussed as a way to reduce monthly payments and help with affordability, offering borrowers slightly lower costs that could help them qualify for homes otherwise out of reach. Critics argue that these loans would saddle buyers with far more interest paid to banks and that many borrowers would never pay off such a long mortgage, but those arguments often miss the bigger picture. Paying a low rate of interest to a bank is not inherently bad if it allows someone to invest money elsewhere at higher returns, just as today’s homeowners with 30-year mortgages at 2% benefit greatly from not paying them off early. Also, most mortgages today are never fully paid off anyway because homes are sold, or loans are refinanced long before they reach maturity. A 50-year loan would be no different, especially since borrowers could always pay more than the minimum if they wanted to accelerate payoff. In practice, savvy investors would likely use the freed-up cash flow from 50-year mortgages to invest in higher-return opportunities, but most borrowers probably wouldn’t resulting in slower wealth accumulation for the masses without addressing the root cause of housing affordability. If used correctly, this loan could be a useful tool, but I fear the overall impact could be damaging.  

Apple CEO Tim Cook pulled three rabbits out of a hat

In 2026 you could be buying stocks on the Texas Stock Exchange

Public companies that bought Bitcoin are getting worried

Financial Planning: The Conflict of Interest around Universal Life Insurance

Universal life insurance is often presented as a hybrid policy that combines features of term life and whole life, marketed for its perceived benefits of tax-deferred cash value growth and the potential for tax-free income through policy loans in addition to a permanent death benefit. However, realizing these benefits typically requires significant overfunding, meaning the policyholder must pay premiums well above the minimum needed to keep the policy in force. Universal life offers flexible premiums, but there are ongoing fees and costs of insurance, which increase with age, required to maintain coverage. Only premiums paid beyond those costs build cash value that can be invested. The problem is that agent commissions are usually based on the “target premium”—the minimum amount needed to keep the policy active, not the funding level required for it to perform as illustrated. This creates a conflict of interest, where many agents are incentivized to sell the policy but not to ensure it’s structured or funded properly. As a result, many universal life policies become underfunded, fail to accumulate meaningful cash value, and ultimately function as expensive term insurance. While some advisors structure these policies correctly, they are the exception rather than the rule. Because the life insurance industry is easy to enter and highly lucrative, it attracts many underqualified or self-interested salespeople. For most people, term life insurance combined with disciplined investing remains a more transparent and cost-effective approach that will outperform even the most efficiently structured life insurance, especially since the need for a death benefit typically declines by retirement. It’s important to regularly review existing life insurance policies to ensure they’re performing as intended and not quietly eroding in value over time.

Companies Discussed: Alexandria Real Estate Equities, Inc. (ARE), Kimberly-Clark Corporation (KMB), Chipotle Mexican Grill, Inc. (CMG) & Newell Brands Inc. (NWL)

The big brokerage firms are fighting for your investment accounts

Can Travis Kelce turn around Six Flags?

Markets actually declined after the Fed rate cut 

On Wednesday, the Fed announced they would lower their benchmark overnight borrowing rate by 0.25% to a range of 3.75%-4%. This marked the second consecutive cut of 0.25% and there is still one meeting left this year where we could see another rate cut. The keyword here is could and the lack of conviction around another cut is likely what spooked the market. Powell said a December rate cut isn’t a “foregone conclusion” and while recently appointed Fed Governor Stephen Miran again dissented in favor of a 0.5% cut, there was also a hawkish dissent with Kansas City Fed President Jeffrey Schmid voting for no decrease. Schmid's vote and Powell's language was likely what sent the market lower after the announcement as many essentially had the December rate cut factored in as a sure thing. Powell also added that there is “a growing chorus” among the 19 Fed officials to “at least wait a cycle” before cutting again. This resulted in traders lowering the odds for a December cut to 67% from 90% the day prior. Given the lack of data and an economy that still appears to be in an alright position, I do believe the Fed needs to be careful cutting too quickly especially since they are taking another accommodative stance with the announcement that they would be ending the reduction of its asset purchases – a process known as quantitative tightening – on Dec 1. This in theory will stimulate the Treasury and mortgage-backed securities markets, which should help with longer dated debt instruments, as the Fed was allowing these assets to just roll off the balance sheet and now will need to step in and buy new debt to replace the securities as they mature. While QT shaved off around $2.3 trillion from the Fed's balance sheet, Covid led to a major expansion from just over $4 trillion to close to $9 trillion. The question is with the rapid expansion just a few years ago, was enough removed from the balance sheet to put it at a more normalized level. Like with the Fed cuts, I do believe if monetary policy eases too much, we risk a return of inflation and a further increase in many speculative assets that could cause problems down the road.

Financial Planning: When does a Solar System Make Sense?

Buying a solar system generally makes the most sense if you use a lot of electricity and plan to stay in your home long term. Installing by the end of 2025 allows you to capture the 30% federal tax credit, which significantly shortens the payback period. If the system is financed with a mortgage or home equity line of credit (HELOC), the interest may be tax-deductible, allowing for little or no upfront cash outlay and after-tax loan payments that can be lower than the monthly electricity savings. Owned solar panels usually increase home value, though not always enough to fully offset the system’s cost, which is why longer-term ownership is important to recoup the investment. In California, including a battery is almost always recommended so you can store power generated during the day for use at night, reducing the need to buy expensive electricity from the grid. Leasing can be attractive for shorter-term homeowners if lease payments are well below current utility costs, but leases generally don’t increase home value and don’t qualify for tax credits. The main advantage is immediate monthly savings without an upfront investment, though leased panels can complicate a future home sale. In some cases, it may be best not to install solar at all—for example, if you don’t plan to stay in the home long term, or if your electricity usage and potential savings are too low to justify the hassle and possible roof wear from installation.

Companies Discussed: The Coca-Cola Company (KO), Capital One Financial Corporation (COF), QUALCOMM Incorporated (QCOM), Knight-Swift Transportation Holdings Inc. (KNX)

Inflation report likely solidifies Fed rate cut this month 

The September Consumer Price Index, also known as CPI, showed inflation climbed 3% year over year for both the headline and core numbers. Core CPI, which excludes food and energy, came in better than both the estimate and the previous month's reading; both stood at 3.1%. It was a surprise to get this data with the government shutdown, but since it is used as a benchmark for cost-of living adjustments in benefit checks by the Social Security Administration it was a rare economic point in an otherwise quiet period. Energy, which provided such a benefit to the headline number for many months, has started to reverse course as it climbed 2.8% compared to last year. Gasoline was a small benefit as it was down 0.5%, but energy services climbed 6.4% thanks to an increase of 5.1% for electricity and an increase of 11.7% for utility gas service. What I would look to as tariff impacted areas, has still remained quite muted considering apparel prices fell 0.1%, new vehicles were up just 0.8%, and food prices had maybe thehardest hit with an increase of 3.1%. Much of this came from food away from home, which was up 3.7%. Food at home saw a more muted increase of 2.7%. Shelter inflation remained above the headline and core numbers at 3.6%, but it is much less problematic than it was in prior periods. Another positive was owner's equivalent rent climbed 0.1% compared to the prior month, which was the smallest month over month increase since January 2021. Overall, this report likely produced enough evidence for the Fed to cut rates at this month's meeting as odds stood above 95% after the inflation annoucement. The likelihood for a December cut also initially climbed to 98.5% following the report. 

The bank earnings from last week had some surprising undertones.

Overall, the third-quarter report from the big banks showed things are pretty much going along OK. But then a couple of the big banks brought up the issue of private credit and some bankruptcies that led to write-downs. Jamie Dimon, the CEO of JPMorgan Chase, pointed out that even though he said he probably should not say it that "if you see one cockroach, there are probably more." Some smaller financial institutions like Zions Bancorp and Alliance Bancorp took a $50 million charge and $100 million charge respectively due to potentially fraudulent loans. The issue here is commercial banks have been making loans to nonfinancial depository institutions or NFDIs and I point out that this type of funding is not very transparent for investors to see what is going on behind the scenes. I was surprised to learn that these NFDIs now account for roughly 1/3 of commercial and industrial loans originated by large banks. One may think if you’re invested in AI companies, you’re safe but research has shown that even your deep pocket players of AI are funding investments with these private loans. As time passes, the more I read, the more I become concerned about what we don’t know about leverage in this economy.

Risky investing behavior continues to amaze me!

Many people will point out that we have missed the boat on crypto, but I continue to worry about the space long term as there is no true way to value what these cryptocurrencies are worth. While this is a major concern for our firm, I would say leverage in the space is another major risk. A big problem is the rules and regulations and ultimately the transparency in the space is not as clear as when you invest in public equities. I was blown away reading an article on CNBC by how crazy the leverage can be, and I bet most investors have no clue about it. While there are ways to leverage crypto in the US, the offshore market is where things get wild! Offshore, decentralized exchanges Hyperliquid offer maximum leverage of 40-times for bitcoin and 25-times for ether and Binance Labs-linked Aster offers as much as 100x leverage, depending on the token. Leverage is so dangerous because if a decline comes and investors need to unwind a position it can create a cascade of selling that leads to massive losses. It is not just the crypto market where people are gambling though. We saw a return to meme craziness with Beyond Meat producing massive gains of 128% Monday and 146% Tuesday. On Wednesday, the stock at one point produced another triple-digit intraday gain, but it ended up closing down 1% on the day. I also saw a nuclear power development company by the name of Oklo have a sizeable pullback after the Financial Times noted the 500% advance in 2025 and $20 billion market value has come despite “no revenues, no license to operate reactors and no binding contracts to supply power.”  These are examples of pure gambling and examples like these typically come during frothy times before reality hits and big pullback comes. 

Financial Planning: The real cost of financial mistakes

When it comes to financial wellbeing, avoiding mistakes can be even more powerful than chasing great decisions. Too often, people lose ground not from lack of opportunity, but from unforced errors. Drawing retirement income without tax strategy can quietly cost thousands in extra taxes or Medicare premiums. Holding too much cash or being overly aggressive both expose you to risk, one to inflation, the other to unrecoverable losses. Maintaining investing discipline sounds simple but emotional reactions like selling when markets fall or chasing what’s hot can destroy more wealth than poor returns ever could. Many homeowners also miss out by not structuring their mortgage correctly resulting in more short-term fees, long-term interest, and missed investment returns. The key isn’t perfection; it’s recognizing that protecting yourself from big mistakes is often the best investment you can make.  When making a financial decision, do your best to get your information and advice from accurate and unbiased sources so you can fully understand the impact of the decision.

Companies Discussed: The Progressive Corporation (PGR), Bank of America Corporation (BAC), ManpowerGroup, Inc. (MAN) & Snap-on Incorporated (SNA)

Will gold hit $5000 an ounce?

Great news, more working-class Americans than ever before are in the stock market.

Lower end consumers are having a hard time making their car payments

Financial Planning: Upgrade Your Emergency Fund to an Emergency Plan

When paychecks stop, as many federal employees are currently experiencing, having an emergency plan with multiple layers of liquidity is essential. The first line of defense is your credit card. When used strategically, it can buy you up to two months of interest-free spending since no interest accrues until after the statement due date. However, you don’t want to carry a balance beyond that point. Next comes cash reserves, ideally kept in a high-yield Treasury bill money market fund, where your money earns competitive interest while avoiding state tax. Beyond cash, having credit lines such as a HELOC provides deeper, low-cost access to capital without forcing you to liquidate investments. These can take a couple of months to establish, and since they generally don’t have origination fees, it’s best to set them up before you need them. After that, investment accounts can serve as a secondary safety net. Taxable accounts may generate capital gains, but withdrawals are unrestricted. Roth IRA contributions can be withdrawn tax- and penalty-free at any age, and HSA accounts can issue reimbursements for qualified medical expenses incurred in prior years. In a true last-resort scenario, you can even access retirement funds through a 60-day rollover, temporarily using the cash before redepositing it. By layering these tools, from credit to cash to credit lines to investments, you build a structured, flexible liquidity plan that can withstand extended income disruptions and operate far more efficiently than simply keeping 12 months of expenses in a savings account.

Do stock dividends give you better returns?

How will the US government shutdown affect you and the economy?

Public debt looks strong, but private debt not so much

Financial Planning: Updated Tax Brackets for 2026

For 2025, married couples filing jointly will see their standard deduction rise from $31,500 to $32,200 with an additional $1,650 per spouse for those age 65 or older and a new $6,000 deduction per spouse for households with adjusted gross income (AGI) under $150,000, bringing the total possible standard deduction to $47,500. The 12% federal tax bracket will now apply to taxable income up to $100,800 (up from $96,950), and the 0% capital gains and qualified dividend threshold will increase to $98,900 (from $96,700). When calculating tax liability, AGI minus the standard deduction equals taxable income.  For retirees, this means the $150,000 AGI level is an especially important threshold to stay under. It unlocks the extra $6,000 standard deduction, keeps all ordinary income in the 10% and 12% brackets, and ensures that capital gains and dividend income remain tax-free. These inflation adjustments give married couples, especially retirees and middle-income earners, more room to keep their income in lower tax brackets and reduce their overall taxable income going into 2026.

Companies Discussed: Verizon Communications Inc. (VZ), Cal-Maine Foods, Inc. (CALM), International Paper Company (IP) & Advanced Micro Devices, Inc. (AMD)

Is a reduction in cardboard demand a warning sign of a slowing economy?

Will the revenue from AI cover all the debt and expenses it created?

Finally, some scrutiny on private investments from the SEC!

Financial Planning: Keeping more of your Home Sale Proceeds

Selling your primary residence can result in a substantial profit, but the IRS provides a valuable tax break to help offset that gain. Individuals can exclude up to $250,000 of capital gains ($500,000 for married couples filing jointly) if they’ve owned and lived in the home for at least two of the past five years. Be careful not to confuse this with selling an investment property, which does not qualify for the primary residence exclusion. Instead, gains from investment property sales may be deferred using a 1031 exchange, where the seller reinvests the proceeds into another investment property. By contrast, with a primary residence sale, you can use the proceeds however you like, and the gain is excluded up to the allowable limit without any reinvestment requirement. Importantly, even if your income exceeds the thresholds for the 3.8% Net Investment Income Tax (NIIT) ,$200,000 for single filers or $250,000 for joint filers, the portion of the gain excluded under this rule is not subject to NIIT. Only any gain above the $250,000/$500,000 exclusion could be subject to the tax. Most states, including California, conform to the federal exclusion, meaning they also will not tax gains up to the $250,000/$500,000 limit. For those expecting taxable gain, timing the sale in a year with lower income can help reduce the capital gains tax rate, since some or all of the gain may fall into the 0% or 15% capital gains brackets. It’s also wise to keep records of capital improvements such as remodels, additions, or system upgrades since these increase your cost basis and reduce the taxable portion of any gain. With proper planning, documentation, and a clear understanding of these rules, many homeowners can sell their primary residence while minimizing or even avoiding capital gains tax.

Companies Discussed: AutoZone, Inc. (AZO), Tilray Brands, Inc. (TLRY), Starbucks Corporation (SBUX) & Wynn Resorts, Limited (WYNN)

Investors have a false sense of safety in the stock market

A psychologist by the name of Gerald Wilde came up with the term homeostatic years ago and I believe this is totally relevant in today's market. It essentially means that when the environment comes to feel safer, people’s behavior becomes riskier. A great example he used was that people will probably drive faster in a big SUV than in a little tin can of a car. Relating it to today's market, investors seem to feel safer because of the long bull market. As the market continues to rise in the longer term, investors' appetite for risk increases. They do not realize that their behavior is risky because they have a false sense that the market will not drop. While the risk of their investments is high, because of the confirmation day after day of the market going up, they don’t feel that they are taking any risk. From my perspective, the risk just seems like it continues to climb as people chase quick returns. AS an example, out of 672 launches of new exchange-traded funds so far this year, according to FactSet, 28% are tied to a single stock and 25% are leveraged and at least three seek to double the daily gains or losses of cryptocurrencies! You may not want to believe it, but there is a lot of risk in markets today and this could all end very poorly for those gambling in the market. Ultimately, there are two different types of investors, one is the long-term investor who is investing to build long-term wealth, while the other investor is in it for entertainment and they enjoy the roller coaster ride with the thrill of gains and the pain of the losses. This is a lot like the addiction that gamblers get. The difference is that long-term investors have odds of nearly 100% when it comes to making money over the long-term. Unfortunately, for those who do a lot of trading and take the higher risk road, well the odds of making money over the long term is closer to zero. If you check the prices of your stocks, I would say much more than a few times a year, you’re probably in it for the entertainment and will probably make poor emotional decisions when difficult times come, and they will!

IPOs look hot, don’t touch them, you’ll get burned!

What's going on with the real estate market?

This week we got both existing and new home sales for the month of August and there was a stark difference in the reports. The headline number for new home sales showed an increase of 15.4% compared to last year, while existing home sales were up just 1.8% over that timeframe. The first important consideration here is new home sales can be extremely volatile on a month-to-month basis, and they make up a smaller portion of overall sales. Pre-pandemic, new home sales were normally around 10% of total sales, but with the limited listings in recent years they have been closer to 30% of all sales. One other reason for the large difference is how the reports are calculated. New home sales look at people that were out shopping and signing deals in August, while existing home sales look at closings in the month, which means these were deals that were signed in June or July. Interest rates may have played a factor here as rates for the 30-year fixed mortgage were around 6.7-6.8% in June and July vs around 6.5-6.6% in August. This also doesn't include the fact that many homebuilders offer lower rates to entice buyers. The supply of new homes also looks much better for buyers considering there was a 7.4-month supply in August and that was down from a nine-month supply in July. This compares to a 4.6-month supply for existing homes in the month of August. Homebuilders have a much larger need to move homes quickly as many of them don't want them sitting on their balance sheet as that can create risks. This compares to the average home seller that may not have a need to sell their home and when looking at the crazy market from just a couple years ago, I believe many of them have unrealistic expectations for how much their homes are worth and how fast the property will sell. Homes are staying on the market longer at around 31 days on average, which compares to 26 days last year. These factors have led sellers to either pull their listing or even delay listing in the first place. One similarity between the two reports was the annual price appreciation with the median price on existing home sales climbing 2% to $422,600 and the price on new home sales climbing 1.9% to $413,500. These high prices and higher mortgage rates have continued to impact the first-time buyer as their share in the existing home sale market was near historical lows at 28%. With everything considered here I still believe the housing market will remain on a slow upward trajectory with limited supply continuing to battle against affordability concerns.

Financial Planning: Insurance Vs Investments

When building a financial plan, it’s important to recognize that investments and insurance serve very different purposes. Insurance is designed to protect against loss. Life insurance provides for your family if you pass away, health insurance shields you from crushing medical bills, and auto insurance protects you financially from accidents or damage. You pay a known cost, the premium, to avoid a potentially devastating unknown cost, which makes insurance a valuable safety net. Investments, on the other hand, are meant to grow wealth and produce income. Stocks, bonds, and real estate help your money work for you overtime. While they can experience short-term volatility and uncertainty, most high-quality investments are built on solid foundations and have historically rewarded patience; those who can tolerate the ups and downs are almost guaranteed to come out ahead in the long run. The confusion comes when insurance products, like permanent life policies or annuities, are marketed as investments. While they may promise guarantees or cash value, they usually come with high fees, low returns, limited flexibility, and lots of fine print, making them poor substitutes for true investments. That doesn’t mean insurance is bad, it simply means it works best when used for protection, not growth. The healthiest financial plans keep the roles clear: use insurance to protect and use investments to build wealth. Mixing the two often results in an expensive compromise that doesn’t perform well on either front.

Companies Discussed: Compass, Inc. (COMP), PACCAR Inc. (PCAR) & Amazon, Inc. (AMZN)

Retail sales are still surprisingly strong

Although the labor market has been softening and consumers say they are worried about inflation, people are still spending money. August retail sales were up 5% compared to last year and if the annual decline of 0.7% in gasoline stations was excluded, sales would have increased 5.5% compared to last August. Strength was broad based in the report and outside of gasoline stations the only other major categories that saw declines were department stores where sales were down 1% and building material & garden equipment & supplies dealers, which fell 2.3%. Non-store retailers continued to be a dominant category as sales climbed 10.1% and food services and drinking places still saw impressive growth of 6.5%. It's because of reports like this that I worry the Fed may make a mistake if they cut rates too quickly. If they overstep, they run the risk of overheating the economy and putting added pressure on inflation. 

Are quarterly reports necessary for public companies?

President Trump floated the idea of switching company reports from quarterly to semiannual. It appears Trump believes this will help companies focus more on the long-term business performance rather than fixating on short-term quarterly numbers. There's also hope this will save time and money for public corporations. The SEC acknowledged they are actively looking into the plan as a spokesperson for the agency stated, "At President Trump’s request, Chairman [Paul] Atkins and the SEC is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies." Being a long-term investor, I can see the benefits of changing this requirement as one quarter should not dictate your decision on whether you should buy, sell, or hold a business. Ultimately, a change like this wouldn't have a real impact on my investment philosophy and if this enabled companies to focus more on the long term and helps with costs, I would be in favor of giving companies the option to make this switch. In terms of the long-term focus, both Jamie Dimon and Warren Buffett have spoken out against not necessarily the quarterly reports, but the quarterly guidance. In a 2018 op-ed piece for the Wall Street Journal, the pair said, “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.” As for the regulatory burden, I'm sure there is hope this would help entice companies to come public. There has been a huge shift in companies staying private longer and I do believe the compliance piece deters some from coming public. I'm sure there are other reasons for staying private, including control and other liquidity avenues that weren't as prominent years ago. Nonetheless, it is concerning that the number of publicly listed companies in the U.S. has fallen from more than 7,000 in 1996 to around 4,000 today. 

Is your financial advisor "quiet retiring"?

Understand the risk of low rated bonds

Financial Planning: Dealing with underwater cars

About a quarter of vehicles traded in today carry negative equity, with the average shortfall around $6,500. This happens because cars depreciate quickly, and the trade-in value offered by a dealership is the lowest number you’ll see—less than what you might get in a private sale, and well below the dealer’s eventual resale price.  Because of this depreciation, about 40% of financed vehicles on the road carry negative equity. While it’s possible to roll negative equity into a new auto loan, that often creates a deeper hole: you’re financing more than the car is worth, and the new vehicle immediately begins its own depreciation cycle. Lenders may approve the loan, but the higher loan-to-value ratio can lead to higher interest rates or tighter terms. GAP insurance can be used to cover the difference between a car’s actual value and what’s owed in the event of a total loss, but it doesn’t prevent the financial strain of trading in too early, and it comes with an extra cost. With so many vehicles underwater, the safer move for most people is to keep driving the current car until the balance catches up with its value rather than trading in and compounding the problem or bring more cash to the deal, so you don’t have to finance as much.

Companies Discussed: Zillow Group, Inc (Z), Workday, Inc. (WDAY), Lyft, Inc. (LYFT) & Synopsys, Inc. (SNPS)