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Announcer 00:00:01 This is Blue Money, a finance podcast made for cops by cops with us. You know, your money safe. Retired Lieutenant Jim Donnelly of the Bensalem Police Department and co-host Kevin McGarry of Valley Financial Group come together to help protect and serve your financial needs. This is Blue Money.

Jim Donnelly 00:00:20 I want to welcome everyone back to the Blue Money podcast. This is your host, Jim Donnelly. I’m here with my co-host, Kevin McGarry. What’s up? Jimmy? nothing much. Kevin. There’s a lot going on in the news. state of the Union tonight. USAA just won hockey over the weekend, so Olympics just wrapped up. So what do you got? Kevin, that’s a great goal, wasn’t it? Yeah, it was amazing.

Kevin McGarry 00:00:38 It was a great game.

Jim Donnelly 00:00:39 Amazing.

Kevin McGarry 00:00:39 The guy looked like Bobby Clark, didn’t he?

Jim Donnelly 00:00:41 Yeah he did. It couldn’t happen. And he couldn’t hold it any better. What a script. He couldn’t run his script better than that. How it ended. He could slash in the face with the stick.

Jim Donnelly 00:00:48 Teeth missing. He has the flag draped around him. Winning goal. I mean, it was amazing.

Kevin McGarry 00:00:53 Well, I had a story, too. the night before, they were sharing a room and his other brother said to him. What are you thinking about? Are you up? He goes, I’m up. He says, what are you thinking about? He goes, I’m thinking about scoring the winning goal.

Jim Donnelly 00:01:04 Yeah.

Kevin McGarry 00:01:05 Golden goal. So he visualized it. Jimmy.

Jim Donnelly 00:01:07 He did. Man. Hey, guys. Living the dream right now, man. Good for him, man. Happy for him.

Kevin McGarry 00:01:12 Now, there’s a lot of news out there right now.

Jim Donnelly 00:01:14 Yeah. So what do you got, Kev?

Kevin McGarry 00:01:16 I think I think, you know, there’s, you know, speaking to a lot of clients, a lot of potential investors, everyone’s concern. But even if you look at last year, you know, surveys out there that, you know, market finished 2025 and all time highs and 76% of investors were nervous and concerned and felt conditions were bad in the market.

Kevin McGarry 00:01:37 I believe a lot to do is you know what they’re watching. You know, a lot of people consume a lot of news. There’s a pullback in 2018 over. The average adult is watching over 30,000. You know minutes of news a year. Now with the devices you know we’re getting we can get that the news pretty quickly.

Jim Donnelly 00:01:56 Yeah. No I think that’s what it is. And obviously Friday just passed the tariffs came down. The Supreme Court ruled against the tariffs that Trump had been Trump basically was using before the International Emergency Economic Powers Act, and that’s how he was just making the tariffs on his own. A Supreme Court ruled 6 to 3 that they felt that, you know, it was unconstitutional. So now what is he doing now? Do you see these tariffs happening yesterday? Market reacted over the weekend. He said he’s going to charge 15% a global tariff. And what’s that coming from that section 122 of the Trade Act of 1974. And what that’s going to do. It’s going to let him be able to set the global tariffs for 150 days.

Jim Donnelly 00:02:32 And people always ask, what’s going to happen after 150 days? Well, the Congress will have to prove it to keep continuing. But it does. That’s why the market really went upside down yesterday. The markets don’t like the uncertainty. So we got on that.

Kevin McGarry 00:02:44 I think listen you know deja news right. You know we’ve been through tariffs. We’ve been through Iran issues. We’ve been through war. You know gold’s at all time. Highs like these are things if you go back to the 70s the 80s the 90s and now they’re around. They’ve been around the Middle East, you know, problems in Russia, wars and tariffs. The short term you know volatility. News. It’s just how do we behave. How do we react to it. Because hey listen. You know the decision could help lower prices. Right. but also the uncertainty. The way the administration behaves. Could cause some volatility and uncertainty, which allows investors to hopefully not behave, you know, poorly and make bad decisions.

Jim Donnelly 00:03:32 Yeah.

Jim Donnelly 00:03:32 Like, on a positive note, like you just talked about gold. Obviously a lot of people are fleeing the gold because of it’s a safe asset. They store value. And like right now it’s like $5,100 an ounce. The last I’ve just seen. So yeah, it’s really climbing. But even the forecast they have for the S&P for 2026. They’re saying like the median should be around 7600 with all the big firms out there. No no one has a crystal ball. No one knows. But the economy is still driving. It’s there are plenty of reasons to be more positive and negative. Like we just talked about the tariffs as people are making the market react. The political stuff going around with Iran. Venezuela, we just had So the oil prices are, you know, all over the charts sometimes. So there’s a lot of things going on, but there’s still a lot of positive. Why aren’t you hit upon that? What do you see the positives for 2026.

Kevin McGarry 00:04:17 So I think here’s the positive.

Kevin McGarry 00:04:18 The way we behave. We want to behave like, hey, we want to remain diversified. We understand this is you know, we’ve seen this news before, right? To give you an example, our investors withdrew over $820 billion from domestic equity mutual funds and ETFs between 130 107 to the end of 24. So money’s moved out of equities during panic. Okay. And where where has it gone? It’s gone into bonds. Right. $3.8 trillion of one in bonds. And the rest is one in cash. When we see this volatility we see this uncertainty. We want to go to safe havens. And what you’ll notice here, the real return on CDs you know right now are probably about plus two a little bit over and minus one. So you’re safely losing money by getting out of the market. So really staying diversified. Right. And, you know, having conversations, educated conversations of, hey, don’t panic. We’ve been through situations and uncertainty before.

Jim Donnelly 00:05:22 Okay. What do you think about the Mag seven? I think it’s get more S&P.

Jim Donnelly 00:05:25 Still they still carrying it or you see other opportunities out there in 2026. Like with the AI build out. So can you hit upon someone that you just sent an email out recently?

Kevin McGarry 00:05:33 Well, I think I think the big thing here is if you if you really look at it, you know, the back seven, you know, has really had, you know, pullbacks from their 50 week highs. You know Alphabet’s down. Med is down. Amazon Microsoft Oracle you know Nvidia Broadcom. They’ve all been impacted. But the interesting thing when we look at the market the market’s broadening. The other 493 you know companies within the index are doing a lot better than the traditional Mac seven. Think about energy you know materials gold E for Europe small caps mid caps. They’re all Outperforming the index is essentially flat. Right. But all these other sectors of the index are really, you know, performing well year to date. And a lot of that possibly could be doing from the CapEx, the spending from a lot of the bigger, you know, tech companies.

Jim Donnelly 00:06:30 Yeah, I mean, they’re spending billions and billions of dollars to try to get this right. I mean, another one that’s getting crushed recently is Bitcoin the crypto. I mean, I think before we just started this podcast today the crypto is down. Bitcoin was down in like 62,000. I mean I think the one thing they’re waiting for that the Clarity Act is going to be coming out soon. Congress is voting on that. And people say well what’s the Clarity Act? The Clarity Act is basically going to be a federal law designed to answer who regulates crypto in the US. Like right now it’s kind of split. We have the US secretary, secretary and Exchange Commission, and we also have the Commodity Futures Trade Commission. So it’s kind of all over the place. The Clarity Act’s going to really give us some clarification on that. But like I said MicroStrategy. Well now strategy they’re the one that’s really holding on to Bitcoin. They’re down I think like 69% in the last two years total. So Bitcoin has really been taking a beating.

Jim Donnelly 00:07:20 I’m not sure what’s going to make it go again. I mean, there’s a lot of things that have drove it in the past, such as, you know, we’re supposed to be an inflation head in 2022. It showed it wasn’t an inflation head. Recently they said it was going to be a store of value. It’s going to be like a currency or a currency. Meaning these these stablecoins are going to be more accurate for the. So I don’t know what’s going to drive it next. I mean, we have a president that’s very crypto friendly. a lot of these ETFs came. So that made the that really made it take off. But now it dropped back down. So I don’t know what’s going to make a pull. Maybe there’s something out there that I’m not seeing or missing. But crypto is really going to be on the radar right now. What do you got on that, Kev?

Kevin McGarry 00:07:55 I mean, listen, it’s been very volatile. It’s a, you know, there’s a there’s a lot of, headwinds and tailwinds for digital assets and digital currency.

Kevin McGarry 00:08:06 But at the end of the day, like when you have a lot of news, a lot of volatility, you know, in a, in an asset class, you just don’t want to be overweight in that asset class. You want to be diversified as as you know, right now, I’m pretty excited that, you know, it’s just not seven companies driving to market. Yeah, right. It’s broadened and you know portfolios and diversification. You know they’re doing knock on wood. They’re doing pretty well this year. And I think there’s a lot of there is tailwind out there for portfolios. Number one you got companies have earnings right. Number two you got you know cash flow from tax breaks and potential interest rate cuts. Right. Less debt service. You know unemployment is ticked up. But if you look at the 25 to 55 year olds, you know, it’s the highest employment rate we’ve had since 2001. So people are working. Yeah. We we need some wage growth out there and there’s some cracks.

Kevin McGarry 00:09:01 You know, personal debt people, consumers using debt to, you know, buy goods. But at the end of the day, right now there are some tailwinds. And you’re really not hearing on the news that, hey, we’re in the fourth year of a bull market, right. And historically, you know, the fourth year has been truly a, you know, good year for the market. So you know right now there’s some volatility. Stock prices and valuations are high. But a lot of the big boys have come back a little bit. And the market’s starting to broaden. And I think there’s some news out there. You know with the tariffs with the wars with inflation. But if you go back in time they’ve always been there.

Jim Donnelly 00:09:38 Yeah. No always. And one thing I’m gonna remind people it’s not obviously a headline, but I always try to remind police officers at the beginning of the year or any career that you’re in. You know, January just came a lot of us got 3%, maybe 4% increase in law enforcement.

Jim Donnelly 00:09:52 Make sure you put more away. I always tell you, you can put an extra 1%, extra 2%. Or if you managed to do it last year, you had some money left over. Put the whole three and a half, 4% in your 457 year old, 4118 whatever you have at work. So it’s just a great time. Just a reminder that if you didn’t do it, I know a lot of people say Come January 1st, I’m going to tell my HR department, hold another percentage of my paycheck. And typical cops, man, we just get lazy. We don’t do it or we just don’t want to send an email. Do it. I just here to remind you again, guys, please keep firing away these accounts. You know, we always preach dollar cost averaging. It’s not about just timing the market. It’s time in the market. And we’ll tell you that to the end of the day. So what do you got on that curve.

Kevin McGarry 00:10:29 I think here’s the thing. There’s a lot of news and and you know bad news sells.

Kevin McGarry 00:10:33 And you know Michael Lewis, the author of The Big Short, he’s quoted probably even heard this. Jimmy, how many times does the end of the world as we know it need to arrive before we realize that it’s not the end of the world as we know it? It seems bad. It seems like it’s the worst time ever. You know? Shit’s happening and you can’t see through it, but at the end of the day, remain diversified overcommunicate and, you know, make sure you have financial planning and and visit that revisit that financial plan often.

Jim Donnelly 00:11:05 Yeah I just want my closing is just don’t scratch don’t try to time the market out there. Just keep staying keep plugging away. Do that dollar cost averaging every time you get paid. Just keep putting it in there. Don’t get caught up in it. Don’t try to look at your accounts five six times a day. It’s not going to change anything. Don’t try to time the market, just stay in the game. Be safe. Thanks for listening.

Announcer 00:11:24 Thanks for listening. To Blue Money. To learn more about Jim and Kevin, or for a free financial assessment, visit Valley Financial. Com or click on the link in the podcast description or shownotes. Until next time safe investing. This material is intended to be educational in nature and not as a recommendation for any particular strategy, approach, product, or concept for any particular advisor or client. These materials are not intended for any form of substitute or individualized investment advice. This discussion is general in nature and therefore not intended to recommend or endorse any asset, class, security or technical aspect of any security for the purpose of allowing a reader to use the approach on their own before participating in any investment program or making any investment. Clients, as well as all other readers, are encouraged to consult with their own professional advisors, including investment advisors and tax advisors. Valley financial can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.