Guests – Stephanie Ford & Lisa Thurman, Jennifer Clark

Market Update: Trump's China Tariffs and Their Impact

On World Peace Day, financial advisors Stephanie Ford, Senior Vice President, and Lisa Thurman joined Winn Tucson to discuss recent market developments.

The markets experienced volatility last week after President Trump announced potential 100% tariffs on China. "Friday the market was down a little bit because of Trump's tariff talk about China. And then now it's rallying back up," explained Ford. "Yesterday Trump did kind of say everything with China tariffs will be okay and maybe not be as aggressive. Now the S&P 500's up over 600 points this morning."

Thurman noted she was out of town when the market dropped significantly last Friday, about 2.7% in the S&P 500. "Over the weekend, of course, he comes out on social and kind of recants his threats on the China tariffs. So I saw the market was rebounding a little bit today, and I think we expected a lot of this volatility throughout the whole year."

Both advisors emphasized the importance of maintaining investment strategies despite market fluctuations. "In April, we had so many clients panicking because the media was really pushing the tariff talk and how it was affecting the markets negatively. But then now look where we are today at a new all-time high," Thurman pointed out.

Ford highlighted that tariffs have proven to be "an incredible negotiation tool to get the world to come to the table to have other conversations," despite initial fears about rising costs of goods.

Investment Strategies During Market Volatility

When asked if clients call panicked during market downturns, Ford explained their approach: "Few of them, most of them, not really. We just reassure them that this is our plan. We're diversified. And their portfolios, as long as they're invested according to their risk tolerance, they'll be okay."

The advisors discussed strategic opportunities during market downturns. "There's good strategies to do when the market's down," Ford noted. "You can do Roth conversions with some of the funds that are down, if you think the companies are gonna come back."

Using Tesla as an example from the April market selloff, Ford explained: "Converting that to the Roth, you can move those Tesla stocks from your traditional IRA, which is pre-tax, pay the taxes now to convert it to the Roth while it's at a lower price. Then when it has a comeback on the stock for Tesla, if it does, and it did, then now it's growing tax-free versus tax-deferred and then not knowing what the taxes are later."

The Value of Financial Advisors

Thurman emphasized the importance of diversification, a common issue with self-managed portfolios. "The doubling the money diversification is one of the most common things that comes up with clients that manage their own money. They're not diversified enough. And so an event that happened in April with the tariffs, some of them were impacted and then they panic and they sell. Whereas we have money managers and we have our own guidance and we're diversified."

She highlighted how during the recent market downturn, certain stocks actually performed well: "Last week earnings kicked off for third quarter and while the market was down, a couple stocks were up. Things like Pepsi Cola and Delta, because these could be consumer staples. So just staying away from one sector like tech and just getting involved with international stocks and other cyclicals."

Ford added that trying to time the market is a common mistake: "That's the problem that people really try to do is try to time the market. And it's funny, this is the one industry people don't want to buy at a discount which drives me crazy. But I get it, it's an emotional part. That's what our job is to do is to buy when the market is going down instead of the other one."

Professional Background and Independent Advisory Services

Ford and Thurman shared their professional history, revealing they first met while working at a bank nearly 20 years ago. Ford has been in financial services for 16 years, while Thurman transitioned after 35 years in the mortgage industry.

Both emphasized the importance of their independent status as financial advisors. "We're fiduciary. So it doesn't matter. We do what's best for our clients, not what's best for our wallet," said Ford. Thurman added, "We offer products that are generally helpful to clients and will get them through their plan. And it's a relationship. It's not like a one-time commission or anything like that."

Investment Strategies in Today's Market

With the market at record highs, the advisors shared their approach to new investments. They both emphasized dollar-cost averaging as their preferred strategy.

"We both have the philosophy of dollar cost averaging," explained Thurman. "You're basically investing in 25% increments into the models that we're invested in because you don't want to, because we're at all-time highs. If you put the whole 100% of your portfolio into the model, chances are if we have a pullback, which is very common in the stock market, then they're going to experience that. So instead we like to break it up. I like to do it over four months."

Ford noted they sometimes accelerate investments during market pullbacks: "Unless there is a sell-off, then I accelerate the next 25% because it's, that's not timing it. It's just kind of accelerating it because it's a good opportunity to be buying."

This approach parallels the automatic funding of 401(k)s, which is another form of dollar-cost averaging as investors put money in at different price points over time.

Educating Young Investors and Maximizing Employer Benefits

Thurman emphasized educating younger generations about retirement savings. "I try to explain to the younger generations, because I'm really truly about educating them. If they learn living paycheck to paycheck from their parents, most likely they're going to do the same. So if you can at least educate them and let them know their options."

She highlighted the importance of contributing to employer-matched retirement plans: "Maybe just starting out small to contribute to your 401k on a pre-tax basis, which is lowering your taxable income. So it's pretty much a wash and a lot of people don't know that."

Ford added that failing to get the employer match is "throwing away the free money that they're going to match." She noted employers are actually increasing matches as pensions become "a thing of the past for the private sector."

The advisors explained that employers often use vesting schedules of up to six years to retain talent, allowing employees to take a prorated portion of the match if they leave earlier.

Mortgage Rates and Real Estate Perspective

The conversation shifted to housing and mortgage rates, with the advisors noting rates are currently in the "high fives," down from a recent peak of around 7%. This puts current rates in historical context, as Winn shared she paid 17% interest on her first home loan.

Thurman emphasized that though rates may seem high compared to recent years, they're still favorable compared to historical norms. Ford mentioned that current inflation concerns related to tariffs might impact expected Federal Reserve rate cuts: "The Fed is supposed to cut the rates two times more this year. But I think that might be— we can't really count on that until it happens."

The advisors noted many homeowners are reluctant to sell properties with low mortgage rates (around 3% or lower) to purchase new homes at today's higher rates.

Comprehensive Financial Planning

The advisors discussed their approach to comprehensive financial planning, challenging conventional wisdom in some cases. Thurman explained: "A lot of the mentality, the old-school mentality is let's pay off the mortgage before retirement. And I'm like, in your case if you're paying two point seven five and you're earning anywhere from six to eight percent conservatively getting your portfolio, then why would you be paying off an asset that you could use as leverage?"

She emphasized the interconnected nature of financial decisions: "When you show them the numbers and how that impacted especially if they take it from a tax-deferred vehicle, now you're increasing your taxes and your tax bracket drastically. Not to mention maybe your Medicare part B. It's all connected in some way."

Ford added that paying off a house creates liquidity issues: "If you have a big expense and you just paid off your house, it was really bad. What happens if it breaks now, you need to take that loan for seven or eight percent or pull money out of a qualified account."

The advisors recommend at least annual financial checkups for most clients, with quarterly reviews for newer clients. They emphasized the importance of consulting with financial advisors even for seemingly minor decisions like purchasing a car: "Sometimes they'll want to liquidate, 'Oh, great, I'll put a big down payment.' And then there's sometimes when there's 0% interest, why are you liquidating something where you're making money?"

Financial Guidance Through Life Transitions

Thurman highlighted her specialized expertise in divorce financial planning, revealing she holds a Certified Divorce Financial Analyst designation (one of only three in Pima County). "Going through a divorce myself years ago, if I didn't know what I knew because this is my profession, I really would have been lost."

She advocates for collaborative approaches to divorce: "What's more popular now is the collaborative divorces, which they both come in and kind of show what it actually looks like. They can fight, spend money on attorneys back and forth and thousands and thousands of dollars, but if it's a community property state it's pretty black and white."

The advisors also emphasized the importance of estate planning, noting many clients haven't addressed basic needs like powers of attorney and beneficiary designations. "We can always recommend really good estate planning attorneys. Or if they don't need a trust, people think they do to avoid probate and that's not necessarily true. There are some small things you can do like a beneficiary deed on your home, pay $30 to the recorder's office and now that avoids probate."

Specialized Services for Federal Employees

Ford and Thurman have developed expertise in advising federal employees, particularly relevant during the ongoing government shutdown. They partner with Profeds, the only company contracted with the government to provide financial education workshops.

"They put on these workshops four times a year and it's complimentary. The federal employee gets a paid day off. It goes through the details," Ford explained, noting these workshops consistently receive positive feedback.

Regarding the shutdown impact, Ford observed: "I think they're used to it. I think when it gets, as it gets closer to payday, they're going to have more people panicking." While federal employees typically receive back pay after shutdowns, this doesn't help with immediate financial needs.

The advisors expressed hope that political leaders would find a resolution soon: "I think the pressure will mount if they keep the government shut down because I think everyone's now figured out through talking points that the House did their thing."

Education Freedom and School Choice with Jenny Clark

In the second segment, education advocate Jenny Clark, founder and CEO of Love Your School, joined to discuss Arizona's education landscape. Clark, a former Arizona State Board of Education member appointed by Governor Doug Ducey, shared her personal motivation for founding the organization.

"While I went to public schools and graduated from Arizona public schools, I never imagined that my own kids would need something different than what I had," Clark explained. "My two oldest boys ended up being diagnosed with dyslexia, and we went through that entire process as a homeschooling family to get them evaluated and diagnosed. It was a very overwhelming process."

When her family discovered their local school district "did not have the tools and resources to support our dyslexic children," they pursued Arizona's Education Savings Account (ESA) program, also known as the Empowerment Scholarship. This experience inspired Clark to start Love Your School to help other parents navigate their K-12 options.

Arizona's Leadership in School Choice

Clark highlighted Arizona's position as a national leader in school choice. "Our ESA program is one of the most flexible and it's completely universal," she noted. However, she emphasized the need to "defend this program against radical anti-parent activists who really only believe that the public school should be the only option for Arizona families."

Addressing concerns about ESAs being a "political football," Clark emphasized the need to communicate facts: "We protect them by simply telling the truth about these programs. We have nothing to hide when it comes to the benefits and advantages of school choice and programs like ESAs for everyday kids."

She explained the fiscal benefits: "The ESA program is only 90% of the state's per student funding and it does not include federal tax dollars or local tax dollars. So every time a student goes on to an ESA, taxpayers end up saving and parents are able to do more for their child's education with less dollars."

Improving Educational Outcomes

Clark expressed concern about Arizona's educational performance despite significant investment: "We live in a state where we spend more money on education out of the Arizona budget than any other line item, over 7.7 billion dollars, yet when you look at the scores in Arizona on the nation's report card, it is absolutely shocking."

She advocated for greater transparency about school performance: "We really have to make the main thing the main thing. It requires parents talking constantly not about the school maybe being an A or B rated school, not about the football team or the other programs or things that are really great. We need to put in front of parents and report meetings regularly and they need to say what's the reading scores, what are the math scores."

Clark revealed that many parents would be surprised to learn that "an A-rated school means that only a third of those kids are reading proficiently at grade level."

Love Your School's Services

Clark described how Love Your School helps families navigate educational options free of charge. The organization is particularly focused on supporting families of children with disabilities.

"We have a special education coordinator at Love Your School who is absolutely phenomenal navigating all of that," Clark explained. "We do work to help parents know what their rights are and are not and how to access them."

She emphasized that public schools have a responsibility to provide "a free and appropriate public education" under IDEA (Individuals with Disabilities Education Act). Love Your School helps parents understand "how to advocate for that appropriate piece and what their rights are."

Clark noted that their services have expanded beyond Arizona: "We are advancing into states that are passing education savings accounts because those families now finally have the choices that their children deserve by taking their tax dollars to the education environment that works for them." The organization now operates in Alabama and West Virginia in addition to Arizona.

Resources for Parents

Love Your School offers several resources for parents, including three comprehensive guides available for free download: the Arizona Autism Guide, Arizona Special Education Guide, and Arizona Dyslexia Guide. Clark highlighted that "one in five students have a learning disability in reading" and these guides help parents navigate evaluation processes that are "laid out very clearly in the law" but rarely explained to parents upfront.

For parents who suspect their child might have a learning disability, Clark offered practical advice: "If you are a parent and you are paying for tutoring and your child is in a public school, go to the school. Say, I want my child evaluated for a learning disability because I'm over here paying for private tutoring when in reality those types of services should be offered by the public school district or charter."

She emphasized timelines established by law: "In Arizona, the school has 15 days to respond to a parent request for an evaluation, and then after that initial meeting if they agree to evaluate the child, they have 60 days to complete the evaluation, 60 school days."

Clark also announced a new resource, DefendingEducationFreedom.com, which compiles research on school choice from organizations like Ed Choice and the Goldwater Institute. The site provides parents with facts to counter misinformation: "If they're at the park and a parent is saying, 'Well, I heard this,' they can pull the website right up and even have the graphics downloaded on their phone to say, 'Well, here is the actual truth with the source.'"

The Future of Education Freedom

Clark expressed strong support for Arizona's ESA program as currently structured: "Contrary to what you might hear on other radio stations or the news media or just opponents in general, we stand by Arizona's ESA program as it is currently written in the law and rules, one hundred percent. This program is implemented well, it is financially fiscally accountable to the taxpayers."

She noted the program's growing popularity, with approximately 93,000 students currently enrolled and projections to reach 100,000 by January.

Clark concluded with a powerful message about education's purpose: "The aim of education is wisdom and virtue, and for those of us who are Christian, Christian virtue. ESA programs and choice programs in general are finally enabling us to go full force, full steam ahead toward selecting the education that works best for our kids. The state and our future economy depends on it, and so does our country. School choice is now the future. It is a tsunami in the best sense of it, and so folks need to grab a surfboard and ride the wave."