I'm glad that we finally got this done.
We've been talking about you joining our podcast for a long time.
And, fortunately, our calendars have finally worked their way, you know, where we're compatible.
You probably had to leave the office, what, about 30 minutes ago?
Well, I had to plan for traffic, so I I left 50 minutes ago, and
I still was a little late.
When we talk about the, the traffic of LA, you always have to factor in at least another 30 minutes, I think.
You know, and where was your office?
I was working out of Clermont today.
Because you have an office in Pasadena and Clermont.
Well, before we get into the nitty gritty of your testimony today, let's, let's introduce you to our audience.
So I know I've known Michael for many, many years.
He's a trusted financial advisor.
He's a portfolio manager.
And the reason why we want him to, join us today, we you know, we're just excited to have him, is because of the fact that now is the time where people really have a lot of questions about their finances.
And are you know, are we doing the right thing to our portfolios?
Are we making the right decisions in light of the current economic circumstances?
So Michael's a senior vice president, financial advisor, and portfolio manager in DA Davidson's Pasadena and Clairemont Wealth Management Offices.
He's got over 2 decades of industry experience, and he brings, a life mission planning mentality to his clients and his families.
He prides himself on understanding the needs and aspirations of his clients and constructing plans to help them achieve their goals through ongoing education, discipline, and patience.
I think people need to know really who you are though because, I want to put a real face to you and that is is that Michael lives in La Verne with his wife, Alicia, a a former high school teacher in University of La Verne alumnus.
So the 2 of you you met in college, it looks like.
And most importantly, the 2 of you have 3 children, and, you keep, they keep you very active in the community.
I know you and I have talked before, but you definitely have not sacrificed your family life in spite of the fact that you're very successful in your career because you take time off with your kids and you make sure that that part of your life is is taken care of.
We're we're in soccer season right now, which fills my tank.
I played soccer since I was 5 years old, and I played in high school school and college and traveled to Europe to play soccer when I was younger.
So when, you know, their soccer practice, I I love it.
We're there at the soccer field 7 days a week.
I didn't know that you were that much of a soccer player.
I know that when we spoke about this before that you played in college.
You went even went to Europe.
Where did you go to play?
So, my college, I went to University of La Verne, graduated from there, and, you know, played soccer for the 3 years that I went there before graduating.
When I was 14, I was selected on a soccer team that traveled to Europe, and, we were coached by the Dutch National Football Association, which was a wonderful experience, played in tournaments in Italy and Austria.
We'll have to talk about that.
Sometimes we'll bring you back.
We'll talk about you playing in Italy because I just got back from Italy.
I just got back from a a really nice vacation.
And, since you spent so much time there, you could even educate me and everybody else more about what we didn't see when we were there.
Anyways, let's talk about, you know, some of the things that are going on right now.
As we sit here today, interest rates are climbing.
Gas prices are outrageously high.
We got a war going on in Ukraine that's impacting the the the whole globe.
You know, and, wages aren't necessarily keeping up with the inflation.
You know, there's just a lot going on out there.
And, you know, in my profession, I'm dealing with with people that are in a lot of stress, a lot of financial stress, emotional stress.
A lot of my clients and former clients probably will appreciate this podcast hearing from you with respect to, are they making the right decisions in light of what's going on?
You know, what should they be considering as we navigate through the economic times?
So one thing that I've learned I went to an economic summit about maybe a week ago, and I learned that we're not in a recession right now.
Is that is that your feeling too?
Well, technically, we're not in a recession.
But we're headed for 1, possibly.
There are some people that think we are in a recession right now.
Technically, you have to be in a recession after a group of people come together
So, you know, it feels the stress that people are feeling.
I mean, you could theoretically say that it feels like a recession.
So, I think it it comes down to how people are feeling at home.
And that stress, whether it's, you know, the emotional stress or the financial stress, I think that plays a lot into some of the decisions that we ultimately make with our money.
And, you know, money to me is really just a utility.
It's a utility that we have available to utilize for whatever our life's mission or our life's purpose is, whether that's taking care of our family.
We may have children that have special needs.
There's a there's an element of planning different for a person who has special needs in your family than if they didn't.
And so that money being used as utility for the life planning for that child or that adult person that ends up growing up with those special circumstances, that's that's those are those are the reasons why we we put planning in place or retiring at a particular age comfortably and continuing to live the lifestyle that you wanna live.
Money is used as a utility to continue to keep that ongoing.
There's a whole host of things.
So so so in light of that, I mean, you're you're talking, like, when we met last time about the importance of planning and and making sound decisions.
Does that process change at all in light of whether we're in a recession now or we're about to get into recession?
I mean, is how is it different or or what?
So if we looked at the different types of individuals that we're working with, you might be able to divide them up into 3 categories or, you know, based off of age, 0 to 30, 30 to 60, and 60 to 90 or end of end of life.
The planning that you would do for somebody at the early part of their life, 0 to 30, may be different than the person that you're planning for at the end of their life, 60 to 90 or 60 to the end of their life.
So whether you're headed into a recession or you have high inflation or you have higher interest rates, the planning between these three categories based off of just age, simply age, may change, and that's okay for it to change.
The wholesale changes of abandoning a financial plan, when I've seen this in my experience, is where people get into real trouble.
It's the it's the working around the edges that can enhance one's financial plan when there are interruptions or dislocations in the economic, you know, the the economy or in the financial markets.
I I've heard so many people talk about you know, once upon a time, I had a financial planner, and I was doing okay.
And then we ran into some rough times, and I just stopped doing it.
And I pulled out, you know, and I started doing my own thing.
And, consequently, I have nothing left over.
So that's kinda what you're talking about.
Maybe during these times, stay on course with somebody like you and allow the professionals to make adjustments, but not abandon a plan, I presume.
And I think I think the client, the person that we're working with, and just like you're having a good relationship and being able to communicate openly with full disclosure and transparency with the adviser and vice versa with the client is paramount.
If a client feels uncomfortable contacting the adviser to share the stressors that are happening in their life, then the plan was you know, there's a chance that it could fail.
So what I find is you need to be accessible as a as an adviser because people are depending on you.
They wanna bend your ear.
They may not do anything, but they just wanna hear about your thoughts about things, right, and be reminded of why they had the financial plan in the 1st place.
I find that for me personally, when I'm having a conversation with a client about their financial plan, I I I believe so much in it that I have my own financial plan.
You know, oftentimes, you know, we may hire an adviser, whether that's a real estate person or, you know, an accountant or even a legal adviser, but they're not eating their own cooking.
They're not actually doing the things that they're advising their clients to do for themselves.
That's that would be a good indicator.
I think a lot of times you don't know, I think.
I mean, if I were to walk into a financial planner's office and sit across the the desk, I wouldn't know if they're not if they're eating their own cooking or not.
I mean but for your point of view, I mean, it's like, why wouldn't you consider that as being a very significant thing?
I mean, you know so would you do you think that when you're talking to a financial planner kind of asking Absolutely.
think it's a two way street.
I think that as much as the the the adviser is looking to, you know, get a profile of that particular client, or at least they should be, gathering information that would be beneficial to providing advice.
The client on the other side of the table should also be looking at gathering information about that adviser, whether it's a financial adviser, a real estate adviser, whatever, and asking the appropriate questions so that they can sense whether this person is actually doing this in their own life too.
You would think that if you're mismanaging your own personal finances, then you're probably
You know, you're probably not qualified to handle somebody else's or make decisions or even give advice about that.
So I was looking at you know, there's some things that are in the market right now, and I'm just wondering how that plays into your financial planning.
And, obviously, you're not giving advice to anybody right now, and we're just gonna be talking very, very generally.
But with regard to the real estate, market, you know, it looks like now it might be a buyer's market is what I'm hearing out there.
You've got, you know, the Ukraine war.
We talked about that a little bit and how that might be impacting inflation and stuff.
Can you just talk about what the the scuttle is among the professionals about the state of things right now?
And let's start off with the the real estate market as it is.
So a year ago, interest rates were sub 3.
You could get a 30 year mortgage for a good borrower creditworthy borrower under 3%.
Today, the news headlines hit today that, you know, Freddie Mac came out with a 30 year mortgage, hit 7% today.
So interest rates have climbed dramatically.
So the cost of borrowing is is more expensive, clearly.
So buying a home, at the same value that you did a year ago is just going to cost you, you know, that much more.
That that plays into the whole budgeting idea.
And doing the financial plan and making sure that what you're tying yourself into, if it's in a if it is a 30 year mortgage, if you're intending on buying a house, that that's something that you can continue to afford long term, you know, assuming that that that rate doesn't change.
So, Michael, as we're sitting here, I'm thinking that, you know, the young person who wants to get into the real estate market is damned if she does and damned if she doesn't.
And in some respect, okay, it's the buyer's market.
So prices are coming down a little bit or they're at least not growing the way they are.
I've got some money saved up.
However, now that the interest rates are so darn high
You know, and, you know, how do how do you feel about young people, you know, purchasing their first home, you know, as part of their investment plan right now going in or do you even look at it as an investment plan or a financial plan?
You know, generally, your home is typically your largest investment.
And every month you're paying that mortgage.
It's forcing you to save by paying back that debt long term.
So that's the way I look at it.
And in fact, you know, some people have, sort of this disdain about debt.
Then there's other people that look at debt as a financial tool, and I understand that as well.
To me, I look at debt as a financial tool for younger individuals that can continue to withstand owning that debt and holding that debt.
But that for savings, that mortgage allows them to continue to build equity paying down the mortgage in addition to wait for the appreciation in the home.
So I think buying a home is a wonderful investment.
It typically is, again, the largest investment for most individuals.
And then you have the ability in the future to decide what you wanna do, whether you wanna sell that home and and, you know, move into a different home or hold on to it forever.
And and, you know, there's a whole whole host of things that you can do.
And then, you know, obviously, if you're looking to raise a family, having a home is, you know, second to none.
I mean, it's it's that's where you wanna be.
From the standpoint of beyond a primary residence, I like, you know, investment, you know, properties as well, But the numbers have to make sense because now you're getting tenants, and the interest rates are gonna be a little bit higher because it's investment property.
But the cash flow that you can generate from investment property is is definitely something that would benefit, you know, people over time as well.
It's just a supplement to their retirement income in the future.
And I see a lot of that with financial plans that I do for a lot of my clients.
They may have a primary residence, but they may have the 1 or 2 other investment properties that they've held for a long time.
And it's it's almost like they're generating their own personal pension from the cash flow that they're generating from those properties.
So is the is it a good time?
Just based off it's based off of what that person's circumstances are at that given time.
I think that where interest rates are are headed or or they've gone, and it appears that prices are now starting to come down and there's a softening in the real estate market.
If somebody's interested in looking at buying a a place that they don't they don't necessarily own one right now, I think it would be a great time to start sharpening the pencil and looking at opportunities.
I'm glad that that you know so much about this.
It kind of, corroborates what I heard at the economic summit that I was at at the Chamber of Commerce last week, where the expert talked about interest rates may not be going up substantially more.
It might be topping off because they're seeing prices stabilizing.
And the whole purpose of that is to stabilize prices and to keep the inflation, you know, from skyrocketing further.
So if we if somebody knows that and they're looking at the real estate market, maybe it's a time to look and, like you said, sharpen your pencil.
So, you know, in in my practice, I deal with divorces, and there are a lot of people that are starting life again.
You know, they their dream didn't come true.
You know, the family broke up.
They may be walking away with some money, maybe some property, and they come to you, and they have no knowledge at all because the other spouse had taken care of all the finances.
What's the what's the first thing you're going to tell somebody like that as they turn their life over to you and they say, can you help me?
You know, I I want to be able to do the best I can with what I have coming out of this divorce.
Well, I think the first thing is obviously need to build some rapport and and learn a little bit about that person's goals, their objectives.
Like, you know, things may have changed.
There's been an adjustment in their life, and we've seen this a lot when we're doing financial plans for individuals that do have some adjustments that have been made in their in their lives.
So to regroup and and sort and sort of, you know, gather that information that can be utilized to provide appropriate advice for that individual.
You know, they may have had a goal of a, but now that the adjustment has has happened, perhaps they need to adjust those goals.
And with the help of a financial plan and having a written plan that can be, you know, reviewed on a regular basis every year, every couple of years, it's good to to reflect and remind that individual, this is why we put this plan in place.
This is where you're going.
This is the objective of the plan.
That way, when there are these stressors of uncertainty in the capital markets, they can, you know, maybe go to bed at night realizing, hey.
I I I have a plan in place to provide them some peace of mind.
Everybody's situation is is gonna be slightly different.
There are those sort of, like, you know, common principles, if you will.
You know, living below your means is probably a very common principle that people should be enacting.
These are things that we would want to put down in a financial plan, making sure that they're not going to outlive the resources that they have.
Well, it's it looks to me like, you're the type of person that my clients would like to meet with.
The problem that I have, I gotta tell you, is is that when I recommend an expert to a client, they always think that I'm getting paid out of the back end or something, which is, you know, absolutely unethical.
I would never do anything like that.
But I do think that people coming out of a a divorce, if they don't if they're not experts themselves then where are they experts?
They should be talking to somebody like you.
You know, you were telling me, I think, the last time we met that there should be a stress test done with every plan.
And, you know, that's a fancy name for what?
So right now, we're in a bear market.
Everybody's talking about it.
Turn on Fox Business, CNBC, open up the Wall Street Journal.
That's what everybody is talking about right now, bear market.
What, essentially, that means is that the stock market has fallen by 20%, and that's where we're at.
And some of the, tech heavy indexes, like the Nasdaq, have even gone down more than that.
Now some of it has there has been some recovery, but it still is down a lot, double digit declines.
A stress test is essentially a way for us to, like, take a look at the current plan, take a financial snapshot of the plan, which includes their portfolio, their needs, which includes the cash flow that they're generating from all of their resources, and, essentially, run that through a a stress test, meaning looking back at certain periods of time where the market has declined, like the Lehman Brothers crash or looking at 911 and seeing what that portfolio did during that period of time.
So it's a backdating of looking at periods of time where we've had these dislocations, these bear markets, and to at least then begin to show the client, okay, here's your portfolio today.
If we experienced another Lehman event or another 911, and there's a whole host of other things, right, we can look at.
But if we experience those events, again, here's what we can anticipate.
Now it's not entirely exact because there are certain positions that have come on scene.
There are new companies that are traded in the public markets that may not have existed on 911 or may have not have existed even in the Lehman Brothers crash that you may have within your portfolio.
But it gives us a way of talking about, on paper, what kind of stress would we experience during this time.
And then as an advisor being able to communicate with the client, what happens if you held through this?
Because if you look at some of those I mean, you know, everybody talks about guarantees.
There's no guarantees, right, except death and taxes.
However, when we look back at certain events like Lehman Brothers or 911 or any other period of bear market turmoil, there's there's one other truth that happens is that we tend to recover.
It's just a matter of how much time it takes for a recovery and at the pace of the recovery.
So usually, we have these declines.
We usually have a period of recovery where we go on to, you know, better days are ahead.
So we can have a conversation centered around what that portfolio is doing during this stressful event in the market.
But let's remind ourselves, what are we doing?
Why do we have this portfolio in the first
Are you still gonna be able to spend the money that you need to maintain the lifestyle that you want to continue to live based off of even this decline?
If the answer is yes, then you're in a and you're gonna in a good position.
If the answer is no, then what adjustments should we be making around the edges that can enhance the portfolio to get you to the place where you are able to continue to live the lifestyle that you want to live?
Well, I know that you craft plans and you do lifetime income analysis.
It seems that if somebody's in that 3rd phase of life that you were talking about, you know, somebody from 60 to 90 and they're in a bear market, that stress test is gonna look a lot differently than somebody that's in that first phase.
I think somebody that are in their twenties or early thirties.
Well, I think we've thrown a lot at our viewers.
I'd like to have you come back, and we can talk about some other things.
But this was a good introduction to what they should be thinking about.
If somebody had any, questions of you they wanna ask you directly, how can they contact
Well, they can contact me, directly by a telephone number.
626-773-4244 is my direct office number.
They can also email me, and, I can provide you with the email address, m campopiano, spelled camp0p ian0@dadcodadc0.com.
Well, Michael, thank you very much for coming.
And thank you for joining us, and we'll see you next time.
