Revolutionizing Careers Amidst Economic Shifts | Weekly Business Briefs w/ Martin Perdomo

Can the skilled trades sector be seen as the unexpected gold rush of the modern economy? Join us as we uncover this surprising transformation with insights from Ted Polk of Capstable Partners. Discover how private equity's move into HVAC and home services is turning blue-collar jobs into lucrative ventures, attracting a new generation seeking stability in a rapidly automating world. Explore why many small business owners are choosing to reinvest and grow instead of cashing out, reshaping the landscape of the trades industry.

As the presidential election looms, inflation remains a pressing issue on voters' minds. Hear from senior economic analyst Mark Hamrick as we dissect the complex web of economic concerns and the political divide in perceptions of financial health. With interest rates at decade highs and wages failing to keep up with rising costs, the conversation around economic policies is more crucial than ever. Regardless of the next president, the onus is on individuals to harness these policies for personal success. Tune in to understand the critical role of the Federal Reserve and the power of personal responsibility in navigating these challenging economic times.

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Transcript

Speaker 1: 0:28

Inflation is burning a hole in Americans' wallets as we head into the US presidential election. But there's a kicker. How's it all going to play out and what's next for our economy? It's Wednesday, october 16, 2024. And it's time to get down to business and dive into the top three news in this week's Weekly Business Brief.

Speaker 1: 0:50

Ready for a reality check, the guy fixing your AC might be making seven figures thanks to private equity snapping knot HVAC and home services companies left and right. According to the Wall Street Journal, almost 800 of these businesses have been acquired by private equity investors since 2022. And that number is probably even higher than what we know. Here's what's interesting. Not every business owner in these trades is looking for a golden parachute. Ted Polk from Capstable Partners shared that a decade ago, 90% of these small business owners were ready to sell and retire Fast forward to today. And a third of these small business owners were ready to sell and retire Fast forward to today. And a third of these owners are staying in the game after cashing in, eager to grow their business with new capital and resources. And there is more to the story. A recent study by the Harris Poll of Intuit Credit Karma found that ha ha guys of Gen Zs and 42% of millennials are considering making a move into a blue-collar job like welding, plumbing, electrical work With AI and automation reshaping industries. 66% of Americans believe these trade jobs offer more security than traditional corporate roles. The skilled trades are having a moment and it's becoming a lucrative frontier for investors and workers alike.

Speaker 1: 2:25

As inflation dominates the national conversation leading up to the presidential election, we have to ask what's really driving the numbers. According to a recent bank rate survey, 41% of voters identified inflation as their biggest economic concern. Even though inflation has eased from 2022, speed prices remain higher than pre-pandemic levels, impacting everything from emergency savings to retirement contributions. Interest rates, despite a recent Fed cut, are still the highest in over a decade, adding to the cost of living. It's not just inflation that's shaping opinions.

Speaker 1: 3:13

Pessimism about the overall economy is widespread. More than half 55% believe that the economy is on the wrong track, while only 32% of Americans see it moving in the right direction. The divide is also political, with 83% of the Republicans saying the economy is off course, compared to just 27% of Democrats. Generally, gen Xers and Baby Boomers express the most concern, while younger generations like Gen Z millennials are slightly more optimistic when it comes to which candidate voters think can best handle their personal finances, president Donald Trump leads with 42%, while 38% back Vice President Kamala Harris. This preference is aligned with voters' overall feelings about the economy. Those favoring Trump tend to view the economy negatively, while Harris supporters are more likely to feel optimistic.

Speaker 1: 4:23

Despite these divides, the economy has seen more positive recently, including a strong job growth. I don't believe that one, but we'll go with it. A strong job growth market and declining inflation. But for many, these wins are overshadowed by wages not keeping pace with rising prices. Mark Hamrick, fagrate's senior economist analyst, underscores that while candidates promise change, the real work in controlling inflation lies with the Federal Reserve. Here's my thoughts on this.

Speaker 1: 5:00

Guys, regardless of who wins the election, you have to accept personal responsibility for yourself. No one is coming to save us. I want you to ask yourself this question Kamala wins or Trump wins? Regardless of the side? What side of the aisle you're sitting in? Are you confident enough? Have you? Will you be committed enough to win, regardless of who wins the race?

Speaker 1: 5:31

No candidate has ever came into office and really impacted your life directly, your family's life directly, if you're really really honest with yourself Indirectly maybe, but you make the opportunities for yourself and your family by going out, accepting personal responsibility and making things work based on the economic policies that these presidential candidates or president or administrations will put into place during their administrations. My job and your job is to figure out what the policies that are going to come into play. What are the policies that they're going to put into play? And then we have to spend time thinking on how we can take ethical opportunities of those policies that they're putting in play for the American people. One thing's for sure we have a lot of problems in our country and we and the government, whatever administration goes into place, has to solve it, not for the left, not for the right. But administration goes into place, has to solve it, not for the left, not for the right, but for the whole pie, for the whole country. So just keep that in mind as you go to the voting booth and as people are experiencing fear on both sides of the aisle.

Speaker 1: 6:50

This one wins all the world's coming to an end. If that one wins, the world's coming to an end. The world's not coming to an end. Whoever wins, you make your world come to an end or you make your world come alive. Strategize. However, the bottom line is that elections may influence policy, but managing personal finances remain a consistent need. Experts advise Taking proactive steps, such as building a high-yield savings account, paying down debt and shopping for the best rate. To keep control over your financial health, no matter who wins, is very important as inflation and interest rates shift. Now is the perfect time to invest in your future. Whether you're looking to understand the ins and outs of property real estate investing or you want to learn how to capitalize on emerging trends, check out my website, wwwmartinreimasterycom, and let's get you started now. Let's go and get back to this episode.

Speaker 1: 7:56

When the Fed starts slashing rates, everyone starts talking. But where's the smart money actually going? We're breaking down the molds that could change the game in finance and how you ride the wave baby. The Federal Reserve has kept interest rates at a multi-decade high. For over a year. It's been painful I'm an investor, real estate guy Really painful. Investors have been parking their money into money market accounts, taking advantage of yields we haven't seen in a decade. But here's the kicker Since the Fed slashed rates by half a percentage point on September 18th, money hasn't stopped pouring in. In fact, research from Cain Data shows that assets and money market funds have surged by about $180 billion through October 10th. So why are investors still on cash today, still holding on to cash, instead of rushing back into equities?

Speaker 1: 9:04

Goldman Sachs chief equity strategist, david Koston, offers some insight. Historically, when the feds start cutting rates, money market funds attract more inflows than equity or bond funds. Why it all comes down to uncertainty. That's right. That makes a lot of sense. If the feds are cutting rates, right, then this is sending a signal to the market. They're cutting rates because things aren't as good as we're being told. Things aren't as good as we're being told. That's my belief as well. Investors may be in the wait and see mode, halting cash while they gauge whether the economy will head towards a soft landing or a recession. Now let's talk numbers. Money market funds like Fidelity Government Money Market Fund are offering returns of over 4.5%, a lot more attractive than a 10-year average of 1.4.

Speaker 1: 10:04

Kaylee Cox from Ritz Hall's Wealth Management highlights that these higher rates, coupled with nervous investors, make cash an attempting option, but she warns this isn't a forever trend Absolutely not trend, absolutely not. Typically, cash inflows start declining around 14 months after the Fed initiates a rate cut. So what's the takeaway here, guys. Well, there's a lot of cash in the sidelines. It's not a guaranteed boost for the stock market. Whether it flows into equity or bonds depends on how the economic landscape shapes up. If you're not sure which way you'll swing, you're not alone. Investors are getting on cash as a safe play, earning close to 5% returns while waiting on the next big move, the bottom line. The game's still wide open. So, in conclusion, guys, I think that definitely money's money's been sitting on the sideline.

Speaker 1: 11:13

And again, like I said earlier, when the feds cut rates, okay, it sends a signal to the market that there is uncertainty. Why is the rates? Why is the fededs pulling back? Usually, the Feds pull back when there's uncertainty to stimulate the economy. We had overinflation which led them to raising rates to pull off the economy. Now they're cutting rates. Here's what I've learned from experience and from studying economics is that the feds usually late to the party. Are they late to this party this time around? Are they early? Is it going to be a soft landing, hard landing recession? What do you think? And I love to hear your thoughts Drop it in the comments. Let me know what you think and let's discuss it. And this has been your weekly business brief. Appreciate you guys listening and watching Peace out.