Peter Tuchman
speaker
483 appearances
9 recordings
1 series
first heard Dec 2024
last heard Apr 2025
Peter Tuchman’s voice in public audio — every appearance, attributed to the second.
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Appearances
If you've got the right behaviors... the right actions, follow those behaviors, you're going to be totally fine. Most of the permanent damage you see in portfolios is caused by people making mistakes.
I think empathy is a key to this because a lot of people will call and say, I know what you're going to say, but, and then they'll ask the question. They just want the reassurance and kind of what I tell our team here is, you know, if The churches in America were full after 9-11 and nobody wanted to go there and hear anything but what they've always heard, right?
You want to be reassured in times of stress. And so reaffirming, hey, we've talked about these things and we've set up the portfolio this way and this is how this normally plays out is very encouraging. And that's really less about investing and more about education and empathy.
So I'm a big fan of rebalancing in a bear market. And so if you think about a client that might have 80% stocks and 20% bonds, when the stock market goes down 20%, you're no longer 80-20. You now have less in stocks because the stock value has gone down. You've got more in bonds. The time to rebalance is right then when the market's down. Sell those bonds. Buy more stocks.
That's forcing you to buy the stocks when they're low. When the market eventually recovers, and that's what's happened every time in history, you'll be ahead of the market because you'll have added to that position in the down market. So that's something called opportunistic rebalancing. Some people never rebalance. Some people rebalance once a year. That's called periodic rebalancing.
Really, the best investor will rebalance when the opportunity really presents itself.
It's a fantastic time for tax loss harvesting. And basically that's realizing losses on purpose. So this is really hard for people to get excited about. So let's take last year. Let's say you owned the S&P 500 and you owned all 500 companies. Well, over the course of the year, the S&P 500 went up about 25%. That's great. And if you owned just the index, you would do no tax loss harvesting.
It went straight up. But let's say you owned all 500 stocks and some of those stocks were negative throughout the year. Let's say Visa goes down. We would sell it and buy MasterCard. If Conoco goes down, you sell it, you buy Exxon. And you, you know, Hershey's goes down, you sell it, you buy Nestle.
Well, what happens is at the end of the year, you still get the same or extremely similar return to the index. You still have that 25%. But because you sold certain things when they went negative and replaced them, you get to put those losses on your tax return. And then you get paid back by the government on those based on your tax rates.
So you will wind up with a 25% return plus some additional savings on top of it. So it's an incredible opportunity when the market's down to be able to do things like that.
It's something we do regularly. And there's so much that goes into it. The market can't be too volatile to do it. It can't have There has to be a lot of people trading. There has to be what we call liquidity in the business. Buyers and sellers are really active. So we just automatically do it when all of the conditions are met. But usually if something's negative, we're just going to do it.
I mean, you make a great point about the young investors. I mean, if you really believe like, okay, the market's at this level and when I'm retired, it's going to be much higher. The path from here to there, you want it to be as negative as possible and make it all up at the end, the sequence of the returns. really impacts how much money you will have.
But for the person approaching retirement, a lot of times they go, well, Peter, I need the money. I'm gonna need the money in a year or two. And the answer is sort of really when most people retire, they're still going to live 20 to 40 more years. They still need a very, very long-term portfolio. You know, in 1950, if you retired, the average person died that day.
The life expectancy, average person retired in their 60s and the average person died in their 60s. Well, that's not the case anymore. People still retire in their 60s on average, but they live into their 80s on average. So we get this portfolio to go on a long, long, long time. still has to be heavily weighted towards stocks and things like that.
But what that person should start doing as they approach retirement is have enough bonds that between their remaining years of work and a couple more years on top of that, they're not at the mercy of the market. So for example, if someone's going to retire in one year, they'd have maybe four years of bonds. So you've got one year of work plus four years of bonds, that's five years.
The stock market can do whatever it's going to do because you're covered in the short run.
That's right. That's exactly right.
I mean, I think the big the big things an advisor can do is they can it depends what your asset classes you're in. So there can be a lot of opportunities and private investments which have now become available to more and more people that really can present themselves in bear markets, things like private equity, private lending, private real estate.
And in an all stock portfolio, people should be looking for opportunities to buy high quality parts of the portfolio while they're weaker. So for example, today, the Magnificent Seven's in a severe bear market, the seven biggest tech stocks in the United States, Nvidia, Google, and so on.
I mean, if you really believed in those companies a month ago or two months ago, you should really be excited about them now. And helping people lean into those, opportunistically rebalancing, switching asset classes in a down market, And then as you mentioned earlier, Nicole, taking advantage of tax situations. I think all of those are kind of just the beginning.
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