SVB default and a potential Fed pause?
Need some more drama? – the debt ceiling debate is on its way.
RHP Partners Natalie Picha and Glenn Royal talk you through what’s happening in this month’s Market Talk, Episode 28, and a bonus Market Flash update on the Silicon Valley Bank failure.
Experience the difference of working with a firm that empowers your life—a firm that focuses on what matters most—you.
Whether you are beginning your financial journey now or have already taken steps toward your ultimate life goals, we are here to guide you.
https://podcasts.apple.com/us/podcast/rhp-market-talk/id1538051530
SVB default and a potential Fed pause?
Need some more drama? – the debt ceiling debate is on its way.
RHP Partners Natalie Picha and Glenn Royal talk you through what’s happening in this month’s Market Talk, Episode 28, and a bonus Market Flash update on the Silicon Valley Bank failure.
Experience the difference of working with a firm that empowers your life—a firm that focuses on what matters most—you.
Whether you are beginning your financial journey now or have already taken steps toward your ultimate life goals, we are here to guide you.
https://podcasts.apple.com/us/podcast/rhp-market-talk/id1538051530
Good morning to our regular Market Talk listeners out there. I'm Natalie Picha, founding partner of RHP Wealth Management, joined by our portfolio manager and founding partner, Glenn Royal. Today is Monday, March 13th, 2023, and this is a special podcast opener to address the SVB or Silicone Valley Bank failure that happened Friday, March 10th. Our regular podcast recording was done on Thursday, March 9th, and that recording will immediately follow this quick market flash, as we want to be sure to address the events of March 9th and why we believe this is different from 2008. So, thank you Glenn, for jumping in with me first thing today and sharing your expertise and vast experience in this area. You're a longtime student of the bond market, and you had a front-row seat to the 2008 crisis. So, why don't we start out talking a little bit about what we saw happen on Friday?
Glenn Royal:Yeah, and I always like to look at things like this in context. So, I want to take us back. A year ago, there was a big PowerPoint slide deck, 50 pages. It went around the whole Wall Street. We saw it here. It was out of the venture capital firms that were advising their portfolio of startup tech companies to take down their lines of credit, and get defensive; it's when the feds started the beginning of its hiking cycle. They saw this Tempest in a teapot. They saw the storm coming based on their 2008 experience. And so what we saw with SVB Bank or Silicon Valley Bank, which is the preferred bank for the Tech Startup, VC crowd, a very, very concentrated group of investors and depositors. Are their assets in the last year almost doubled by a hundred billion up to 200 billion? So, what you have, with this bank in particular, is a very concentrated depositor base. And last week earlier in the week, the VC firms started advising their clients to take cash out of the bank.
Natalie Picha:So, basically an old-fashioned run on the bank.
Glenn Royal:It was a run on the bank when you had over 90% of the deposits in SVB above the FDIC insurance limits.
Natalie Picha:Right. But a very specific niche in the market in terms of venture capitalists and the, basically, it's all the tech startup.
Glenn Royal:It is. It is. And so, what happened at the bank is whenever you know, banks basically take deposit assets. They invested in treasuries and mortgages. And they earned the spread. In that interest margin, we call it. So their portfolio, what they did in the last year, is they bought a lot of longer-dated maturities. A lot of long bonds, and what we all saw last year was we had this rapid rise and increase of the federal funds rate, which put pressure on that bond market and their portfolio that they had held for sale securities. This is where they have to go get money to meet the investor withdrawals. So when, this run was happening, they were forced to sell their bond portfolio that was actually 15% underwater to the market in terms of values. If you hold these treasuries to maturity, which most banks have, it's not a problem. But when you're forced liquidation and you own a 1% bond, when the rest of the world now is paying you 3% on those bonds, you have a loss in that bond that you have to realize.
Natalie Picha:Right. So I think just for our listeners out there, just to be clear, and I feel like we've said this before and and hate to be redundant. But the inverse relationship between interest rates and bond values. And so there are these long dated bonds that basically didn't have the same value that they did when they purchased them. They still get their, they were still marking that coupon. But for a lot of people, the understanding that well, bond is my safest place of my portfolio. Right. Even in the banking world, we're talking about treasuries, great place to be.
Glenn Royal:Risk free.
Natalie Picha:Right. But the bond values do still fluctuate. Just like everything else.
Glenn Royal:We use that, you've heard me talk a lot to clients in meetings, I talk about the switch. Right? You hold this switch in your hand. The part out at the tip of the switch is the 30 year bond. It's the most volatile to interest rate moves. The shorter end, you know, up near your finger is, you know, the securities are going to CDs, things like that. Very low volatility. So what this bank had SVB was they had that tip of that switch. They had those longer maturities that are most acceptable. It's a concept we call duration risk. And, you know, we are aware of that. We kept our duration very short last year. And then when rates rose, we were able to step out and start adding to that duration and get those five plus yields.
Natalie Picha:So why is this different from 2008?
Glenn Royal:So 2008 was really counterparty risk. We did know there were all types of derivatives. We had a very poor credit quality. Homeowners were getting what we call liar loans. Low documentation. We had fraudulent cases were mortgage homeowners were being told things that they didn't even understand what they were doing in a mortgage. The case of the lawn care guy out in LA the guy like an$800,000 mortgage when he was making 20,000 a year. You know, all these types of fraud. Then you had the counterparty risk, because of the derivatives that you did not know what the other person had as collateral against the loans that you were giving them. So it was kind of like a shootout at the OK Corral and all the banks started calling each other's collateral, and then they started collapsing on each other. What's the big difference is out of that 2008, we had bank reform, the Dodd-Frank, bill that came out. And it's put heavy regulation, higher capital requirements. It's removed the capital markets trading that the banks used to do. So they're much more stable. The other thing to realize where SVB had a very concentrated investor deposit base. These big banks don't. They're very, very diversified. They're very, very well capitalized. They also use something, as a portfolio manager. If I was running that big portfolio like that, I would use interest rate swaps. I would've hedged my upside risk to rates. And why SVB didn't do that is is puzzles me. But that led to their demise.
Natalie Picha:So the Fed already has met this morning, we're seeing them, you know, they're making all the right moves, which in 2008 we didn't, I don't think we even knew what the moves were to make. You know, they were doing the best that they could under the circumstance, but we had never been there before. But you see the Fed already stepping in this morning to really try to stab off that contagion and stabilize things. You know, we're a little bit later into this trading day now, what do you think? Are they doing the right things? Are things starting to kind of calm down?
Glenn Royal:They are. I mean, it's still a little volatile here on a Monday morning, but they did learn quite a few lessons from the 2008 episode. So, they're employing different tools right now to give liquidity backstops to these depositors. They're protecting the people that have money in excess of the FDIC limits of$250,000. They're not in protecting shareholders. They're not in protecting the bond holders. They'll be wiped out. In 2008 they did that, and that caused a moral dilemma. Right. That really angered a lot of people. They're not doing that this time, but they are protecting the depositors because it is payroll. It's a number of things that affect a lot of people, particularly out in California.
Natalie Picha:So we've already had a couple of calls this morning from different clients asking about their own security of their own banks. Do you think big banks are safer than small banks?
Glenn Royal:With the Fed regulation. The oversight of FDIC, the bank examination, they have to. They have a living will. It's a, it's a document all banks have, including SVB, where if we were to have a risk-off event like this, what would we do to resolve this situation? So there are a lot of things in place. You're not seeing the big, big banks really have as much issue. Again, it's that diversified depositor base and protections from Dodd-Frank. So I don't have any concerns there.
Natalie Picha:So, we're fixing to... You and I are doing this quick little short; I'm going to call it an opening addendum to what is going to be our episode 28, which is going to follow this. We make a statement in that upcoming podcast that this is not 2008, and banks are really well-capitalized. And then this happened on Friday. This is maybe that break that we talked about. That might cause the fed to pause. And so we're going to stand by our comments, which are fixing to come up in this next podcast, that banks are well capitalized. This is, this is a really an isolated event. However, this might be the break that the Fed needs to pause, not pivot, but to pause in this rate hiking cycle.
Glenn Royal:Exactly. And, the markets are telling you that today you're seeing the Fed futures contracts price, maybe a quarter of a point. I know one of the big investment houses out today said the fed's not going to raise a quarter of a point. They're going to wait and skip this meeting. They need to absorb the data and see what's going on. The number one job is the financial stability of the fed.
Natalie Picha:Exactly. Exactly.
Glenn Royal:When you get this kind of hiking cycles, this kind of things happen. What I'm not worried about...while we talked in this podcast was a credit risk. Today, the average FICO score of a homeowner is in the 700 plus range for individuals, companies, et cetera, in pretty good situations. So, I don't see this as a credit contagion risk. I do see it isolated to an old fashioned run on the bank. Based on depositor concerns of that Tech VC startup crowd. Okay. Pretty, pretty limited at this
Natalie Picha:Point. All right. Okay. Thank you, Glenn. I appreciate your time and for watching global markets on behalf of RHP and our clients. I mean, for many of you out there, I just want you to know, but the market's never close. And so around the world, Glenn, who's has a lifelong passion for these markets, there's not really any days or night or weekends for him. So, you know, Glenn, our hats off to you for never sleeping, basically. So now we'll just go ahead to our regular opening for our regular episode number 28th, which was recorded on March 9th. Welcome to the RHP Market Talk podcast, episode 28, brought to you by Royal Harbor Partners Wealth Management, located along the beautiful Gulf Coast of Houston, Texas, serving families across the country. I'm Natalie Picha, founding Partner
Glenn Royal:And I'm Glenn Royal, founding partner.
Natalie Picha:Well, thank you, Glenn, for joining me. Again. We are absent our sidekick here. Jason is, uh, on a business trip this week. So he is out. And so it's just the two of us and get to start this conversation off for our listeners out there. Not to be redundant, I feel like we keep talking about the same thing over and over again. And we, we do. And it's because of where we are in this current economy. It's because we keep looking to the fed, to the interest rates, to the, the inflation rates, because it really is what this market is hinged on. And so you and I have just had a quick conversation about this just a few minutes ago about, all right, where do we go from here? Chair pals next move markets, we're pretty much set last month, even in our last podcast. We said, you know, we're expecting a 25 basis point hike on March 22nd, but then we had some conversation this week and looks like could be 50 basis points. What do you think?
Glenn Royal:Well, that's the market saying that we'll see, as Chair Powell said on the second day of his congressional testimony, that it's predicated upon the data. If the data comes in hot, then they're going to respond appropriately. I think the biggest thing we really have going on is when you see this type of news leap from the business pages, newspapers, or online to the front page of your local paper; it gets people's attention. And that's probably why we're talking about a whole lot more. And this is something people fill at the grocery store, they fill at the retail store, they fill everywhere. So it's, it's top of mind.
Natalie Picha:Right. And it certainly, it's not just the grocery store, the retail stores. I mean, it's the housing market, it's the labor market where those numbers are all coming out. And they all have a lot to do with where we go this year. 2023? I think everyone, you know, 2020 covid that shock to the market was a lot to digest for investors. And then we saw a recovery in that market really quickly, actually. And then we knew we were going to have some hurt as we saw inflation go up for 2022. And we saw that pullback in the market. And I keep thinking that, what I hear from our clients, what I hear from people out there is when do we get relief? What does the relief look like? And the interest rates with, along with that inflation number, is really the data that tells us, oh, are we okay now? Are we, are we in a recession? Not in a recession; are we having a recession?
Glenn Royal:Yeah. So understandable. All those things create a lot of anxiety. Yep. Of course. One thing I really want to stress to our listeners is the background of this type of inflation in the fed hike cycle. Typically we, when we have a recessionary thing coming, we know 2008 was a credit-risk recession. Yes. Covid was a shock to the system that shut down a business overnight globally. Those were credit risk issues that we had. We don't have that today. What we're simply dealing with is a fed that's fighting inflation, and we are already seeing markers from used car prices to transportation costs, et cetera. Inventory is caught up. You're seeing the cells that are going on because of excess inventory. So we are seeing a lot of the markers of inflation come over. Some of them are staying sticky, like food prices and things of that nature energy. But even that's come down quite a bit from a year ago when we were all paying, you know, four bucks a gallon for gas. Right. Right. So we are seeing that come down, and the one thing I think we have to really understand is that 2008 affected your homes. Right. That was the credit issue. The banking crisis that we had today. Banks are the best capitalized they've ever been. Yeah. We're not having, you know, we'll have a crypto bank that's blown up, but that was, you know, you know, their own deal. Right. Not, but we're not seeing the big bank, shaky Morgan, Bank of America, et cetera. So I think the other thing is, as we get through this, Powell says this quite a bit, Chair Powell, the monetary policy operates with long and variable lags. Yeah. We are just now filling the first-order effect. The rate increases began a year ago, last March. So as that comes aboard and, and one little interesting factor, that'll when you attribute a bet, but the fed's balance sheet post-pandemic ex, it was 9 trillion in assets. It was 35% of our nation's GDP largest on record by far. Just unbelievable. They're pairing that off at the same time. They're increasing the fed funds rate for every 1 trillion declines in the Fed's balance sheet, which has a tightening effect equivalent to about a third of a percent of the Fed funds rate hike. That's where I kind of wonder about the Fed. You know, they were going 75, 75, went to 50, then went to 25. It will be hard for them to keep going in step back up to 50 basis points because they're very well aware of what's happening as money basically money's being drained from the system. Right. And it tightens conditions.
Natalie Picha:So another, I guess, obstacle on the horizon for this year would be the debt ceiling and the conversations we're probably looking at coming up in June.
Glenn Royal:Yeah. And, there was a proposal today by the Republican party to basically prioritize treasury spending in terms of the treasury notes, the bills, the social security, et cetera. The issue with that is the Treasury Department says our systems aren't set up to be able to handle that. And even Powell, who it's not his job to intervene in this conversation. But he did say, you know, the only solution is to raise the debt ceiling or suspend. So that fight's coming. I can tell you that's probably what keeps me up a little bit at night—that and issues with China, you know, what they're doing there. But I can remember 2011; we did see the equity markets decline about 15% as the rhetoric really became heated on the debt ceiling fight. There was a wave at that time. We had the tea party that just came into Congress. You had certain politicians that were really out there trying to make a name for themselves and fighting it. This time I mean, things really are different from, we weren't that far from 2008, you still had the credit crisis in your mind, things are a little bit different. So I don't know if that's going to fold out, but it's something that we really have to pay attention to. And there are some things that we are doing in our portfolios to mitigate that risk. One of them is kind of moving away from what I call credit spreads. If I have a treasury, that's a risk-free rate. That's the benchmark reference rate. Right. If I have a corporate bond, I've compensated extra yield for that perceived extra risk. Right. That's where I wonder a little bit about what could happen in those credit spreads. In these fixed-income worlds. So we're walking back our exposure to that and relying more on treasuries. And what I would call very, very short maturities. If you have a CD, or you have a bond that matures in a year, and the credit quality's good. You're going to get your hundred bucks back. So we've shortened our maturities, our duration, we call it, in order to minimize that volatility as a result. And plus, hey, today, we're getting paid over 5% for short-term investments. So there's a place to hide. It's not like it was in 2011; I didn't have a place to hide. Interest rates were zero. Now that rates have reset. We've got a good place to kind of hang out. And I know we're doing a lot of that with clients. We are having them change their portfolio allocation from perhaps a little bit more aggressive to a little bit more conservative pricing.
Natalie Picha:We actually get paid.
Glenn Royal:So I, you know, the big part about all this, Natalie, is that what is the starting point of valuations in the market, you know, going forward when you have a rich market, future returns get pulled down by that because your starting point is so high. But the other side of that coin is, which we can argue it's a little rich on valuations. The other side of that coin is that if you invest after a sharp down year, your odds of long-run performance are much better. It's kind of the same thing. Well, we had that last year, particularly in the bond market. So I'm optimistic once we get past this fed hiking cycle, inflation starts to come down. Things look pretty good in the future. The last time we had, this was 93, 94, and once the Fed finished their hiking cycle. Boom, we were off to the races leading up to the dot com bubble. But it was...there were some really good years in there.
Natalie Picha:Well, I just had a conversation with a client about 10 or 15 minutes ago about market cycles. And the ability to ride out a full market cycle. With an understanding of markets going up, markets going down, interest rates fluctuating. Like that's where we are. And having to stay in...stay in the game. Yes. You know, over longer periods of time. Emotionally, it's fun to get in when it feels like everything's going up.
Glenn Royal:Hey, there were two years ago there were podcasts programs, YouTube, where the hosts were pulling, uh, Scrabble letters out of the bag to create a ticker, and the stocks would go up based on that. So that was a period of really high...lots of money in the system. Stupid money is going everywhere. You saw all kinds of crazy things. Well, those days are over. And that, so sobriety is coming back. The fed is draining that punch bowl. Ending this party in order to get the inflation rate down, and they have a track record of succeeding.
Natalie Picha:Yeah. Well, and at the end of the day, emotionally, you want to, you see...and that's what we try to do is work with clients to take the emotion out of it. Are they, they buy in when it seems like everything's going great? And then they immediately want to sell out when things are down.
Glenn Royal:I'm the opposite.
Natalie Picha:I'm the opposite. Right. We're the opposite.
Glenn Royal:I'm a professional worrier.
Natalie Picha:Woo-hoo. We want to buy when things are on sale. You know, and so...
Glenn Royal:So the cheap part right now we're seeing, and we're doing more of, is we're moving abroad. Europe is outperforming the United States this year. If I look at all the metrics across the board, international looks like a much better place to be. So that's kind of where we're going. You buy your straw hats in the wintertime, as they say—value investors.
Natalie Picha:Exactly. Exactly. I'm glad that you brought up the international markets because I also just, you know me, I'm always kind of keeping my ear out and grabbing headlines here and there and going...oh, why are they talking about that now? Something that has been a topic over the last few years, really, is trying to bring production back to the U.S. This idea that globalism is dead. Or it's all about building it all in the U.S., And that's not an easy feat. Because we are in a super tight labor market. And we don't have the resources to just suddenly make all the chips in the world. Talk about that.
Glenn Royal:Well, immigration issues, things like that. We were talking a little bit earlier about the educated workforce that's over here in the HB1. H1B visas. They're getting laid off in the tech space. They have 60 days to find a new job, or they're deported. These are the cream of the crop, the people we want in this country. So it does argue for immigration reform. Different levels. There are all kinds of things there. Right. That's a big can of worms. But certain things like that, you don't; you want to keep the talent over here to be able to manufacture chips. To be able to know how to work in one of those clean rooms that are 10,000 times cleaner than a surgical room. It's a special skillset set. I can say we watched the labor force participation rate. See what's going on—a lot of boomers.
Natalie Picha:Right. Help us grow. Right. Yeah. It takes people to grow. So the only other thing I really wanted to touch on today was some of China's concerns you see out there coming up. It's certainly been a big topic in the last couple of weeks.
Glenn Royal:Yeah. So a lot of it has to do with the consolidation of power with President Xi. Before this last couple of weeks, the people in charge out on the field were either academics or Chinese nationalists that had foreign affairs experience. That's all gone now. They've replaced them with people that have survived the Communist Party in China. These are pretty tough individuals to survive that. So they're the closest allies of the president. She, they will affect his policy. They're going to make it happen. There are two sides to that coin. We did see where China reduced its official GDP growth forecast from five and a half to five, which put a little pause in the market last week just a little bit, but it was enough. The positive side of this is that these state-owned enterprises are run by these party politicians. They can get things done where before; they had more conflict, more issues, and things. If you want to see the silver lining, you could take it that you're going to see more effective action out of the politicians in China start going. Now, on the other side of that, we saw a big high-tech investment banker that disappeared. It reminds you of Jack Ma about Obama, that disappeared a few years ago. So there is concern amongst the Chinese entrepreneurs about the government's approach of, you know, restriction and then No, no, you can go ahead in advance, and they come back and restrict them. And so there are challenges there. My takeaway from it is, is where a lot of Wall Street has thought that the reopening of China would be a positive impact on the global economy and could cause more inflation as they, you know, demand raw goods to manufacture. Maybe that calms down that inflation concern globally backs that off a little bit, but you won't necessarily see the big growth from the rest of the world participating in China's expansion. They're turning inwards. They're trying to create their own internal consumption. Of course, we had the issues with, you know, the chips and all this. And they saw the president; she called the US outright the other day, which is not his style, but he's going there. So I don't think it's necessarily a Cold war. I'm an old Cold War veteran of the Soviet Union back in the day. I don't see anything like that, but it's certainly something that we're paying attention to. A lot of debt, a lot of real estate issues, et cetera. The one thing I would like to talk a little bit about is if we can just give people an idea of the calendar and what's coming up in front of the Fed meeting. So there are some key things here to look at. Today is Thursday, the 9th of March. So tomorrow it's a big day. There are three big prints that are economic indicators coming before the fed meeting on March 22nd, which will give us an idea, are they going to go to half a point or stay at a quarter the first one tomorrow? And that's job numbers. So what kicked all this off, this kind of sell-off and all the concerns, the 50 base point hike, et cetera? It was last month. Jobs just came in stronger than expected—over 500,000 job gains. We are looking for a 25,000 employment gain tomorrow. That's going to be the big picture. You'll look at the unemployment rate to stay about 3.4% month over month. By the way, if we get more than 300,000 job gains, that probably means a 50 basis point increase. Boom. Right? If I get into CPI, which comes out the consumer price index is March 14th, followed by the producer price index the next day, those are going to be another case where if we see month over month increases, a greater than a half a percent on the core rate, which is CPI, less food and energy, which are more volatile components. If I keep seeing that core rate go up, that could be another half a point, baked into the cake, and PPI, and then retail cells are going to come up. These are four big data points that the fed's going to take into their March 22nd meeting. Now, one of the things I've noticed really, really closely, and if you have the ability to look at a chart at home, look at the SPY and chart it compared to BND, which is the Vanguard Bond index. So I've got the S&P 500 ETF and the total bond marketing index, ETF; they are trading in unison. So in January, I had bond prices, rally yields went down, the equity market lifted, we hit February, you know, bond prices went down, yields went up. So went to the equity market. We're back in that. So the bond market, you know, the old bond vigilantes, if you will, they're back in control, and they're, it is driving this bus right now, but I, I am optimistic. I do believe that inflation is going to wane. Maybe they stay higher for longer on fed funds. The big change, we've talked about this before. You've see it in mortgage rates; I think we're over 7% now in a 30-year. If you're under 45., you know, this is, this is shocking. Right. But if you're my age, my first mortgage was seven and a half, and that was a screaming deal as a VA loan. So we're kind of the long-run average is about 5.7 for 30-year mortgages. So what you're seeing is a reset of the extraordinarily low-interest period, post-2008, to more normal levels. Yes. It's going to be a little higher now because the fed's fighting that inflation. They'll get that under control. We think when rates trend back down, which could be 2024 right now, you're not going to necessarily scope back to a 3% mortgage. It's probably going to go in the four... High fours, five in there. So that funds, we think, come back down to four, three, and three quarters from a potential peak of five and a half, five, and three quarters.
Natalie Picha:It's really hard to explain to people who haven't experienced anything more than a 0% interest rate world that money isn't free.
Glenn Royal:Right. Right.
Natalie Picha:And so there's this sense of, well, that's, there's something really wrong. But in reality, it's, we're actually going back to normal. You should...you should be able to save money and get paid on it.
Glenn Royal:Right. If I were a Fed governor, I am just happy as can be. I don't like having a, you know, the job losses and things like that part of the job. But it returns monetary policy, which is the big tool for the Fed, to more normal levels. So if I have a recession, I can cut rates. When I was at a quarter of a point, I had to do these quantitative easing all these experiments and monetary policy in order to get an effect on the market. I go back to the standard. It's really a nice world for investors to be in when you have that kind of normal monetary policy. It's something I've been screaming about for years now.
Natalie Picha:Since 2008.
Glenn Royal:Couldn't wait. Couldn't wait.
Natalie Picha:You know, when are we, when are we going to get back to some sort of normal? Yeah. Well, thank you, Glenn. It's always a lot of fun to have these conversations because I know that we're going to talk about a little bit of everything, but I hope that for our listeners, what we're doing is kind of consolidating kind of a wealth of information into a quick 20 minute sound bite. They can really absorb and digest than you.
Glenn Royal:Thank you for asking the great questions.
Natalie Picha:I'm just passing along the questions that they're asking me.
Glenn Royal:Sure. Sure.
Natalie Picha:So I want to thank our listeners for subscribing to RHP Market Talk and encourage everyone to please listen to our April edition of Market Talk, where we're going to have a special guest joining us to talk about the current state of the commercial real estate markets. I can't wait for that. That's going to be a fun conversation. If you have any questions or would like to discuss today's topics, please feel free to contact us through our website at www.royalharborpartners.com. At RHP, we are passionate about planning for your financial future. Through our one-on-one conversations, we can help you navigate your personal wealth management and investment journey. How different will your life look with the right advice? Royal Harbor Partners is a registered investment advisor and the opinions expressed by Royal Harbor Partners on this show are their own registration of an investment advisor. Does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon. As such, any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.