WEBVTT

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Welcome to our video today here
on climate change in the market.

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I'm Jeremy Swonger, financial advisor
here at Braun Wealth Management Group.

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And today I'm joined by Byron
Braun, President of Braun Wealth

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Management. Byron, thank you for joining
us today and sharing your insights.

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Thank you Jeremy, Great.

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Today what we want to do is address
any of the concerns that we're having

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currently in the financial market
and starting off with, Byron,

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can give you us an insight on the shift
from COVID being locked down

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to now, COVID acting more flulike, kind
of what impact that has on us as people.

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Okay.
Well, first of all, it's huge because our

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society was locked down
for over two years.

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So when COVID is now flu
like various things happen.

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But the biggest one is that people
want to become normal again.

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So they want to go to movies, they want to

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go to sporting events, they want to go
to conferences, things of that nature.

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They want to work on
their projects outside.

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Also, too, the other thing that it does,

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it frees up what we call the
delivery systems in our society.

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And that could be shipping, air cargo,
freight, et cetera.

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For example, you don't see the five mile,

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ten mile, 20 mile ships offshore
waiting to get into the ports.

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The other thing that it does is it allows

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corporations that are in
manufacturing of fertilizers or plastics

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or any kind of items that
we use as a society.

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It allows them to get their
production levels higher.

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So net, net, you have more items being
produced, which increases supply.

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And at the same time, on a global basis,

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the free flow of goods is
opening up slowly but surely.

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This could take six to twelve months,
but we will get there eventually.

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Okay.

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And so you mentioned some of the
things it has with the economy.

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Can you talk a little bit further with the
impact of opening backup and how it has

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effects on the market, mainly with
inflation involved with that?

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Well, if you have a freer flow of goods
and you have more goods being produced,

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it's the old supply and demand
formula that we learned in College.

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So if you have ten apples for sale and it
takes a week for those apples to get to

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market, and now today I have 20 apples for
sale and it takes me half the time to get

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to market, eventually those
apples will fall in price.

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Thus, we as a society will
help and be benefited from it.

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We've seen little evidence
now of inflation dropping.

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It's only two tenths of a point,
but it's going in the right direction.

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And hopefully once we get a trend line
and again, that could take six months to

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twelve months, markets will
perceive that and like it.

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All right.

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And then doing this in order to help stave

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off inflation, the Federal Reserve has
started to increase the Fed funds rates.

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Can you tell us if that's good or
bad or how that impacts things?

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Okay.
I'm going to try to put that as good.

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If you're not borrowing bad, if you're

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borrowing, okay, but net, net, the Federal
Reserve probably waited too long to do

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this, but I'm going to give them a
pass because COVID was prevalent.

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But they raised Federal Reserve rates a

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quarter point already,
followed by half a point.

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And so basically, the Federal Reserve
is what we call normalizing it.

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Their target is probably going to be in

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that two and a half range,
which means over the next six to ten

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months we're going to have several
increases of one half of 1%.

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And what that will do is we'll bring the
Fed funds rate into that 2-2.25%

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range, and it's already had an impact on
SBA loans, installment loans, for

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example, you don't see the
0% specials on cars anymore.

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Most of them are 2.

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99%.

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And it also has an impact on mortgage
rates, which have gone from like three and

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a quarter to about five and a
half, five to five eights already.

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And then obviously, a little bit earlier

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this year, we saw the start of
the human tragedy in the Ukraine.

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Can you talk about how the Ukraine war

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kind of impacts the markets
and how we see them?

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Well, first of all, it's a tragedy.

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It's very Hitler like.

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It's sad.

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But markets perceive wars or conflicts as
they will end sooner or later.

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We may not like the ending.

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We may not like the resolution.

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We may not like how it ends.

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But once it gets closer to an end,
that cloud slowly moves away.

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We're kind of in this acceptance mode
right now as far as financial markets are

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concerned, where unfortunately, we've
accepted it,

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moving into the end phase, and who
knows where the end phase will be.

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But anytime there's a cloud out there,

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markets pull their horns in, as we've
been seeing the last three to five weeks.

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Right now with the current climate that

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we're in, what type of advice do you
have for investors or our clients?

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I have been in this industry now 40 years,

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and the analogy I like to use is you
don't want to over steer your portfolio.

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Over steering, in an ice storm will cause

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you to spin and go in a
ditch and have an accident.

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So reevaluate your objectives,
revisit your allocation.

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And if you want to be more growth driven

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and take advantage of this, you would edit
it up as far as equities are concerned, or

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if you're a little cautious,
you would edit it down.

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But you're going to see on the screen in a

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little bit this chart from Wells
Fargo Investment Institute.

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And if you look
on my left side where it says market

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downturns, the downturns since 1928 have
been classified in four different

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categories, 5% or more, 10% or
more, 15% or more or 20% or more.

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So right now we're in that 15% or more

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range, which means the average downturn
was 28.2% and it lasted 6.2 months.

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So if you made an edit in six months
it moves you may regret that edit.

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If you go to the other side and this is
more important

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if you have been fully invested for the
past 30 years or the past 20 years or the

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past 10 years and you remain fully
invested if you had a million dollars

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invested, for example, after ten
years it'd been worth 3.2 million.

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If you missed only ten days
out of those ten years your portfolio will

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be less than 1.8 million
or a lost opportunity of 44%.

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So staying invested
usually is the template.

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That's why we always encourage allocation,
its really what it's all about.

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Allocation dictates your success
and failure and your experience.

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Yeah, those are pretty staggering

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statistics when you look at not
being invested in the market.

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Ten days.

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Ten days out of thousands of days.

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Yeah.

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Quick Closing, is there anything else
that you would like to share with us?

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Yeah I just want to thank all of our
clients for their confidence and trust.

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We will help you navigate through this.

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This will probably last six months or more

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so you don't want to get accustomed to it
but when it does turn the signs to look

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for are an easing of inflation
the signs that the federal reserve may be

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slowing their pace and possibly resolution
overseas with the war.

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So those signs will soon to appear over

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the next six to twelve months and
we're here to help you with it.

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Well, thank you today, Byron, and thank

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everyone for watching our video here
on climate change in the market.

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We do plan on bringing additional videos
like this in the future so we hope you

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have a chance to take a look at those and
we hope you have a great summer and hope

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that you get out and have some great
incredible experiences so thank you.