AI Stocks Selloff 2026: Overreaction or a Real Warning Sign for Investors?

This is Invest Talk. From KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero. Good afternoon fellow investors and welcome to the Monday, September 21st, 2026 edition of Invest Talk. I'm your host Luke Guerrero and I'll be with you over this next hour as we dissect the news today. Talk a little bit about the market and most importantly answer your finance and investment questions. That being said, before we run down the market's performance and preview our show topics, why don't we tackle this color question now? Hi, good day Justin and Luke. Long, long time listen to your great show here, Matt from Minneapolis. I have a question for you gentlemen about a stock that I'm considering purchasing. Moderna, I've been watching them and their prices going up here and they've been producing some new and good products and I was wondering if you guys would give this one a thumbs up or not and consideration to adding it to your portfolio. Thank you very much. I'll be listening on the show. Have a good day. Let's take a look at Moderna, take her MRNA. Moderna is a pharmaceutical company. It did particularly well coming out of the pandemic because it had one of the COVID vaccine. So it also had uses MRNA, it's really an mRNA medicine pioneer and they have an expanding pipeline that's moving into flu, into combination vaccines and more recently with its partnership through Merck, these individualized cancer therapies. Now more recently, you see momentum technicals being really poor coming out of the pandemic, a steady downward move and then all of a sudden at the beginning of the year things start to look up and a lot of that has really been related to that movement trials with respect to that partnership with Merck. In fact, you saw a huge upward move from about $59 per share, maybe around $63 per share in the middle of August, a huge jump up to 145 and then up another 12.27% today that puts this name up 486.44% your to date up 585% over the past 52 weeks. Taking a look at growth, I mean growth has been pretty solid, but a lot of this has really been overshadowed by this effectively two-year boost in revenue during the pandemic with that 19 billion in revenue. That's projected only about two billion this year. It's one of the reasons why those are the only two years of the past five years that profits have actually been positive and in existence. I mean, if you look at their growth year over year in their most recent quarter, it's only 2% growth on revenue. They also had, albeit they had the success so far with the cancer trials, although that's still a long way from production. They had a Norovirus vaccine candidate that missed early success and that was a little boon to the stock as well. With all this being said, guidance that had to reiterate up to 10% revenue growth for the full year, their flu vaccine, their mRNA flu vaccine, which is M Fluzeva, got a unanimous positive FDA advisory panel vote ahead of an August decision. So that was a near-term catalyst coming out of earnings that certainly helped the stock. Overall, though, I think this is an interesting thing because a lot of this is going to be predicated upon what happens with this cancer vaccine more recently today. That's what the move was about. They announced three abstracts on its personalized cancer vaccine and put a window for presentation in August on those findings on the phase three data. So this is an interesting case because you don't often see these pharmaceutical companies that did really well for things that exist and then the pipeline kind of dried up and they have so much on horizon. So I think with the move we've seen, it's become a bit of a risky play from here. If they are able to succeed in this in this cancer vaccine, this joint venture with Merck, certainly there is more upside here, but that's still a bit far away. I would expect a bit of a downward move, a little bit more consolidation, and that is when I would be more likely to enter this name. That is Moderna Inc. ticker mRNA. Thanks for the call. We had a great show for you folks on friday. I was out, but Justin brought you a story about whether or not you should sell bonds. Now and also how to reposition fixed income in a high oil high rate world. He also answered a listener question on ticker N-T-R-A, which is Natera Inc. If you happen to miss that episode, I encourage you to check it out and remember the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. Alrighty, well today we have a lot planned for you, including my main focus point, about the AI stock sell-off of 2026, and whether or not it's an overreaction or a real warning sign for investors. We saw recently Anthropics bombshell disclosure that its clawed AI was used for weapons research, spying, cyber attacks, and that said AI-related stocks tumbling this week raising fresh questions about the sector's regulatory future. So we'll dig into whether this is a buying opportunity in a dip that we saw last week or a signal that the AI risk premium is finally being priced in. We also have a couple more story few including one on the big move to cash from the world's biggest investors. Another on how compensation hasn't really kept up with inflation, and should we have time at the end of the show, we'll look at how the market, and I mean prediction markets, have already called the midterm elections, and what that might mean for investors. We also have plenty of voice bank calls ready to play and plenty of questions ready to answer, but we're headed into a short break now, let me remind you that we are happy to play your recorded voice bank questions, but we love taking your five calls, the Invest Talk number, never changes, and the line never closes. Invest Talk, 8 at 8, 99 chart. You've got finance and investment questions, and Luke Guerrero is ready to provide his unbiased answers. Call now or anytime, 888 99 chart. Well before we answer more of your finance and investment questions, why don't we talk a little bit about the market today? It was a pretty positive day overall positive, certainly there were pockets of the market that were far more positive than others. The Dow was up 71 basis points, the S&P 500 up 1.49%, NASDAQ up 2.26% and the Russell 2000 up 52 basis points. In fact, the S&P 500 and NASDAQ posted their best sessions since August 4th. It was the third straight day of gains, and the NASDAQ set fresh record close, while the S&P was about 40 basis points off of that peak that we saw on August 13th. It wasn't like the market cap weighted indices were the only ones that did well. Breath was actually slightly positive, the cap weighted S&P performing very well, but the equal weighted S&P performing well as well. You had big tech, mostly higher, you had software, airlines, iBs, homebuilders, some of the names that have struggled recently doing well, and on the other side you had some of the stronger performers of last week, your energy, your parcels, your managed care, your insurers, amongst the worst performers on the day. The bond side treasuries were a bit stronger, you saw some curve flattening yields down anywhere from one to five basis points. While the dollar index was up 20 bips, gold finished down 90 and silver was down 1.1% on the day. A lot of this move I would say was probably chalked up to this downward pressure on oil prices. We saw WTI crude settling down 3.9%, now down for four straight days. You also saw a bit of an extension of the AI trade rebound from recent worries related to both agent momentum and really this pacing idea of slowing down the frontier and then yields. Another positive move for risk sentiment yields likely helped by what we saw with oil amid some more hawkish post FOMC fed speak, and certainly this is going to be a pretty busy week of that as well. So a lot of what Fed governors are going to say, maybe influence the market for the rest of the week. And then lastly we had U.S.-China trade talks ahead of this Trump G summit, the talks described is successful, although, you know, there's no emphasis on what the actual AI dialogue might have been. Looking ahead to the rest of the week, Wednesday brings the Flash PMIs for September because we actually don't really have any formal data to be released tomorrow. Then on Thursday, we have initial claims in August new home sales, then August durable good orders, and the final University of Michigan consumer sentiment for September will be out on Friday. All right, why don't we keep things moving and get to a live call from David in San Jose. How can he help you, David? I was wondering if this is a good entry point for PEP, PepsiCo. I have some shares, thinking about adding to it. Sure, let's take a look at PEP, which is PepsiCo that is the $177 billion market cap company that many of factors and distributes, not just Pepsi beverages, but all sorts of beverages, some food, and some snacks as well. It is an international conglomerate, it's only 55% of its revenue comes from the United States, and then the rest, of course, from other areas of the world. Now, year to date, it looks like it's down 9.71% down, about 8.58% over the past 52 weeks. And over the past four years, it has been a perennial underperformer of the S&P 500. One of the reasons why might be because growth is not too great, honestly, until this upcoming year when revenue growth is supposed to go from 93 billion to 99 billion, it's been slow. It's been very little change since 2023. At the same time, margins have been compressing, though this is a bit of a correction in that this year on net margin. But if you look at EBITDA, which is earnings before interest, depreciation, and amortization, margins are still a little bit down. In the most recent quarter, you did have a beat on consensus, there was a little bit of an upward move after that, but I mean, it's kind of continued its downward trajectory. You had gap net income that is, sorry, though, up sharply from a year earlier, you had a reaffirmation of guidance, and one thing that I think a lot of people don't particularly think about with companies like this is you see these non-recurring items in the most recent quarters from a tariff refund claims, and so that actually added a full point of earnings per share growth for the year. I think that when you look at earnings for a company, you can oftentimes be lulled into this false sense of positive performance, and you are seeing a revenue beat that certainly was real. You did see a non-gap EPS beat that certainly was real, but the core North American business, which is really still the heart, the beating heart of PepsiCo, it's showing real strain from squeezed US consumers, and I just can't get over this meaningful lag relative to not just to the rest of the market, but the industry as well for the better part of the past six years. So in spite of the revenue beat, I think the main story is this US consumer pullback here, and it certainly has not been good for this company. So for now on PepsiCo, I'm going to have to pass. Thanks for the call. All right, folks, we're headed into a break when we come back, plenty more answers to your finance and investment questions here on Invest Talk. The Invest Talk podcast is in a program break, and since you are listening to the live stream broadcast, Justin or Luke are ready to answer your finance and investment questions right now. You can interact live called 888-99 chart. This is Invest Talk, independent thinking shared success. The Invest Talk podcast is in a program break, Justin or Luke will return in two minutes. But you don't have to wait, submit your questions now, live to Justin or Luke, call Invest Talk, 888-99 chart. Thank you. [Music] The Invest Talk podcast is in a program break, Justin or Luke will return in one minute. [Music] The Invest Talk podcast is about to resume. Remember you can call right now and submit your questions live to Justin or Luke, 888-99 chart. [Music] This isn't a game, it's your life. KPP Financial helps investors work through important decisions before retirement begins. So learn more, request a conversation, or get a free portfolio review. You can start now at InvestTalk.com. So I saw this published report for the 2026 Global Asset Owner Barometer. She looked at 430 pension funds, insurers and dowmins, sovereign wealth funds, it was not just in the United States, it was across 25 countries, and it looked at the combined assets of 5.76 trillion, and the headline finding was a pretty violent swing towards cash. In fact, net cash allocation intentions jumped at positive 22%, a 35.5% percentage point swing from just a year ago. That's a pretty sharp move for really any asset class, especially cash, 37.8% of respondents plan to raise their cash allocation, that was only 9% a year ago. I don't know, when nearly 4 in 10 of the world's largest investors are actively building cash, that's a pretty defensive positioning, and a high level conviction that something might be a miss in current valuations, and the part that really connects to really everything we've been discussing, the only two asset classes with more cutters than adders are US stocks, net negative 10.3 and UK equities, net negative 16.5. So every other asset class had more buyers and sellers, infrastructure had the strongest positive reading at 51% emerging markets, at 47 inflation linked assets at 41, and private market allocations jumped to 96% of respondents up from about 80. What does this all mean? Well, it can be a bit of a lens, sorry, when looking at what the world's most sophisticated investors are doing, and what they are doing is they are leaving the US market, they're building cash, and they're rotating into other areas, into inflation protection, infrastructure EM, and one of the reasons why is because the equity risk premium is pretty much zero, the 10 years at 476, the max 7, is up just 1.1% on the year, so from their vantage point, the risk reward in US equities just isn't there. Now the survey, although it was released recently, was fielded in June and July, so before that September 16th rate hike, before oil ran back to 100, would it read more extreme today? Probably, you know, the cash swing has already 35 points before the Fed hiked. the hike it's hard to imagine. it would moderate with higher yields. And so the lesson for retail investors for you, for all of us, isn't go to cash, right? Institutions de-risk by rotating, not by exiting. They have rebalancing rules, they have asset liability models, and investment committees making weighted decisions. When a household raises cash, it usually means an unstructured bet on timing, pull everything out. Promise to get back in when it "feels right" and end up missing their recovery the same way they miss the bottoms and march, different animals entirely. But the direction is instructive. If you are 100% US equities and 0% cash, 0% international, 0% inflation linked, your position against the world's most informed pool of capital. It doesn't mean they're right, and it doesn't mean you're wrong, but it means maybe you should start to consider why all of these pools of capital are moving. From time to time, we do receive questions from our web forums, and this one came in from our website. It's on ticker MGA. And it says, "How do you guys feel about Magna International ticker MGA? It has risen to 5% of my portfolio. Would you hold or take profit? I'm a long-term holder of this company." MGA is Magna International Inc. It is a global automotive supplier, so it's dual-listed on the TSX and New York Stock Exchange because it's actually headquartered in Canada. It designs and manufactures vehicle systems and components across body and exterior structures, power and vision, seating, and complete vehicles. That's most recent report was July 31st. It looks like revenue was up 30. I'm sorry, 3% year-over-year for that quarter. Just a DPS was at $1.86. That was a record. That was up 29% year-over-year. That was well above the estimate as well because we did see a revenue beat as well, free cash flow. Was it $617 million? That's more than double last year's levels. It's like operating cash flow. Was it $954 million? Three of their four segments actually grew sales, a year-over-year, anywhere from 6% to 8% on an annualized basis. And guidance had a race. It's one of the reasons why this company is up 20.94% year-to-date, 36.54% over the past 52 weeks. They had an ebit margin raise, an earnings raise, a cash flow raise. They had a bit of a sales range trimmed slightly. But with margins expanding, that's certainly good news. For a company that has really struggled up until, from a price performance perspective, up until the middle of 2025. One thing that concerns me is it looks like China's production estimates were cut by about 800,000 units because of weaker market conditions. There also could be persistent headwinds from tariffs with slow recoveries. And although it did have a bit of a move on the beat and raise, I don't know, with margins expanding the way they're supposed to, I would expect a bit of a bigger one. I don't think that means you look past the record quarter and the full year outlook raise. But the market seems to be waiting for, I don't know, some sort of quarter over quarter confirmation of this margin increase. From a trend perspective, margin growth has been slow. And certainly there is a bit of a risk here from the tariffs that you cannot overlook. So for me, I would probably look into take some profit here trimming this back down to what your original allocation was, because there is a lot of uncertainty specifically for this industry. On the next Invest Talk, we'll look into the story. The weight loss drug boom hits its middle age. What the GLP economy means for your portfolio. The obesity drug market is shifting from scarcity to fierce competition as new pills direct consumer pricing and looming patent expectations up and what was once a two player race. With one in five US households now including a GLP one user, let's take a look at what the next phase means for healthcare investors and for food apparel and employer healthcare costs that these drugs are reshaping. That's tomorrow. For now, I'm Luke Guerrero ready to take your calls anytime at 888 99 chart. 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This is a complimentary event, seating is limited, and guests are welcome. You should reserve your spot now. Start at InvestTalk.com. Anthropic, the company behind Claude, published a threat intelligence report on September 10th, titled Detecting and Countering Misuse of AI. In a lot of ways, it kind of read like a spy novel. There are five cases of individuals using Claude to support biological weapons research, including one involving a grant proposal for gain of function experiments with deadly virus, Russian actors developing software for autonomous first-person view attack drone swarms. Terminal guidance, target selection, multi-aircraft coordination, there was state-level cyber espionage using Claude to automate exploit research, automate malware creation, automate these mass targeting operations. There's another Russian individual. Use Claude to identify intermediaries in China and Hong Kong for acquiring European-made goods with military applications than routing them through third countries to avoid sanctions, and also Iranian linked actors working on weapons related to technical proposals. Yikes! Anthropics had every one of these activities was detected, and every single one of them was blocked. They branded these actors "generative threat groups", a new category of adversary that uses Frontier AI as the backbone of their operations. And they also have this pretty blunt assessment that AI has collapsed the labor and tooling gap that used to separate well-resourced state-sponsored operations from individual operators. Now after this, we saw a pretty sharp movement. We saw the S&P Nasdaq opening lower last week. We saw Nvidia getting hit chip makers, getting hit CrowdStrike dropped nearly 7%. Sam Altman told OpenAI staff per Bloomberg that the company is open to slowing AI development into response to some of these safety concerns. And so with this downward move, and certainly we had a little bit of that pair back today, is this a warning sign or is it a buying opportunity? It does not have to be mutually exclusive. It does not have to be one or the other. In a lot of ways, I think it's both, and I think understanding why kind of requires separating two very different risk profiles. The first risk is the risk that every company faces. Certainly this one as well, this industry as well, and that's regulatory. If governments respond to this report by imposing restrictions on AI model deployment, by more export controls on AI chips, by mandatory safety testing requirements, or some sort of liability framework for AI misuse, that kind of changes the cost structure. It also changes the timeline for every company in the AI supply chain. And it's a real risk. You see it in the EU. The EU's AI Act is already in force. The US already has export controls on advanced GPUs to China. And a disclosure showing that Frontier AI was used for bio-weapons research and drone-sformed development is exactly as it should be, the kind of evidence that hopefully catalyzes congressional action. But I also don't think it's time to panic. They being anthropic, publish this report voluntarily. They detected the misuse. They blocked it. They disclosed it. That is exactly how the system is supposed to work. I think another way to look at this report is evidence of proactive safety practices, not an out of control technology in a lot of ways. You know, Anthropic has the most sophisticated detection systems in the industry, their trust and safety team identified patterns across seven different categories, and the bad actors were stopped. The second risk, the one the market is really pricing in is that AI safety concerns become a drag on the growth narrative that has powered markets for a bit of part of two years. If the super cycle depends on unlimited deployment, unlimited adoption and capex, then anything that introduces friction to that narrative is certainly going to be something that slows the timeline and compresses multiples, right? The chip stocks that rallied 78% on the assumption that demand was unlimited, they start to get reprised. Maybe demand has conditions attached to it that a lot of people were not thinking about. So even if the trade is intact, it's probably going to weigh down on some aspects up. Right, this infrastructure bill that isn't stopping. Nvidia's fiscal year 28 guidance of 70% growth, it's supply constraint, it's not demand constraint. So the hyperscalers are not cancelling data center orders, the memory companies, they still have three to five years to take or pay contracts. So the physical bill that is continuing regardless. But the question has to be asked, how can you evaluate a risk when the technology itself is becoming a liability? And that framework has to be based upon separating the companies that benefit from AI deployment regardless of who deploys it and why from the companies whose business model depends on unrestricted deployment. Take Nvidia, for example, memory companies or infrastructure builders, power providers, they benefit regardless, they sell the picks and shovels. Whether those shovels are used by a hospital or a weapons lab, they get paid the same. The regulatory risk to their revenue is limited unless governments restrict chip sales entirely, which would be a form of self imposed recession that I don't think anyone is seriously proposing here. Now the model providers, your anthropic, your open AI, your deep mind from Google, they face the most direct regulatory exposure. They're the ones whose products are being misused and the ones who will be called the testify, who will be regulated, who will be potentially held liable. But paradoxically I mean the companies investing the most in safety like anthropic, they may be better positioned long term because they're building the detection and compliance layer that eventually is going to be demanded. Now the cybersecurity sector, that middle layer, that's kind of interesting to me, but we saw that initial sell-off when the Clawed Code Security Tool earlier this year and we talked about, I talked about how I thought that was a bit of a knee-jerk reaction. I thought it was a bit overblown, but if AI makes threats more sophisticated, the demand for defense rises too. So your crowd strikes, your pedal-out on networks, they may face near-term disruption from AI native security tools, but the total addressable market expands from there, it doesn't shrink. My honest read on what we saw last week, it's an overreaction in the near-term, but still a bit of a warning sign for some of the potential risks. The AI infrastructure trade is very much intact, earnings are very much real. The demand is not the constraint here this applies, but the regulatory risk premium that the market has been ignoring for the past couple years. In a lot of ways, it's probably going to get priced in and it's not going back to zero, so the days of buying AI stocks without accounting for the possibility that governments will regulate how the technology is used and who gets to use it, I think in a lot of ways are over. That doesn't mean sell, it means understand that as risks change, the prices and growth trajectories for securities and themes change as well. It's like we had a live call from Todd from Sunnyvale, got a question on AMD and listening on AM1220 in the Bay Area. How can I help you Todd? I look yeah, I'm fortunate enough that I've held a stock at this AMP for over 10 years, I have heat gains, it's in a pre-tax account, and I am now as of today's bump up over 10 percent of my full portfolio on this single stock, I wonder whether it's time to turn on that at the beginning. Yeah, so is it 10 percent of your overall portfolio or just 10 percent of this one portfolio? Okay, so it's 10 percent of your overall portfolio. Okay, so AMD bit of a volatile name, it's actually pretty in line with what we've been talking about recently because they're a big semiconductor giant that designs these CPUs and GPUs. They certainly have been a beneficiary, of the AI theme, I mean, their most recent quarter revenue was up 50 percent year over year, and so 50 percent when you're in the billions in revenue year over year is pretty crazy, they beat the consensus by about 0.2 billion, they beat on earnings, they beat on cash flow, their data center revenue has just gone through the absolute roof as well, that's more than doubled, year over year, and they also had a non-gap operating income record to boot, and then they guided a bit higher for fiscal year 26 and fiscal year 27. I like this company, I think it is a big beneficiary of what we have seen, but I think for you, there's a bit of a risk mitigation standpoint here. Oftentimes people are, especially when you're in a position where you've held this for 10 years, you have a lot of gains there, and the tax bill is likely to hurt, but Steve used to say there are good problems and bad problems, and having to pay taxes is definitely a good problem, because it means you did well, and you have profits. I think this is a, like I said, solid company, excellent numbers, but the valuation here kind of already priced in a bit of excellence, and so I would be more concerned on the risk mitigation standpoint, it doesn't mean that AMD's not going to continue to move higher, it entirely could. I'm just saying when you got it at 10 percent of your portfolio, I would cut down on a little bit of that risk and not hate yourself if the price moves higher, because at the end of the day, investing is not just about return, it's about risk as well. Yeah, yeah, but it isn't a pre-tax account, so I wouldn't take an immediate, you know, tax it on it. Oh, okay, that's even better there. That gives even more reason, I think that lowers your barrier for why you should take some profits there. Yeah, okay, very good, appreciate your time. Awesome, thanks Todd. Have a great day. It's keeping things moving and dropping another question from 888-99 chart. I'm calling today about Celestica, ticker symbol CLS, wondering if you thought it would be a good idea to put a small position in my portfolio. Just thinking this might be a good live portfolio is heavily commodity energy right now, and my balance is a little bit, but it might be a little bit too volatile. Let me know what you think. Thank you. Bye. Celestica is a Canadian company. They are just like the other one we looked at before, dualisted on the NYSE and TSX, and they are one of the global leaders in data infrastructure, data center infrastructure that is by manufacturing and designing a lot of these cloud infrastructure that hyperscalers are using, as well as not just hyperscalers, but it really, any AI compute customer by building out these networks and building out these server infrastructure. Revenue, about 62% year-over-year, that did beat the high end of its own guidance range, and beat estimates by nearly 290 millions. Revenue sat at 4.7 billion. Gap EPS was at 3.17 that was up from 182 a year ago. A lot of this growth has unsurprisingly, not surprisingly, been concentrated in not just its AI compute, but in its enterprise networking. So you see that a lot of the demand for data data centers has moved not just physical infrastructure companies, but cloud infrastructure companies, like this one. And that's why I was able to raise its 2026 revenue to revenue growth, roughly 65% growth. It's 4-year EPS, roughly 87% growth. And so it's up about 18.98% year-over-year to date, up 38.09% over the past 52 weeks. It was a pretty clean beat and race. You know, its margins have started to expand a bit as well. From 2021, when net margin was about 1% projected to be 6.4% this year, even to margin as well nearly doubled over the past couple years. And it's really trading just above an average valuation. It's trading at 19 times price to 4 look earnings. Its average over the past five years is 15.9%. So near its average, certainly in a reasonable portion of that range, I think one benefit should guidance be accurate from what management is seeing is that guidance is not projected to just, or sorry, growth is not just projected to be in 2026, but expand into 2027 in 2028, which I think is why you've seen some analyst upgrades here, even though it's trading at 483 Canadian. It's projected to, sorry, the analyst target price is sitting around 650 Canadian. Now we don't use analyst estimates as a set in stone, but it does show you the trend of where things have been moving. [BLANK_AUDIO] That's not all good, right? Management itself has flagged some real risks. They say that inventory builds needed to support this ramp up and ongoing materials and long lead time, component constraints and can be pressures on gross margins. But I would say this is probably about as clean a beaten race as it gets, right? Every headline number topped its own guidance at all of its margins are expanding. And management's calling for an acceleration into next year, so I like it. I certainly like this one. This is ticker CLS solid growth at a reasonable valuation. Thanks for the call. See if we can answer a quick question on SCHX. - Hi Justin. My name is Robert and I'm from Florida. I'm just wanted to say thank you for all that you guys do in great show. I learned so much from just listening to you. I just have a quick question about Schwab US large cap ETF. ticker symbol is SCHX. I might be interested in buying a couple of shares and I would like just to get your input on it and just to see how that is. Again, thank you so much for all that you do. Have a great day. - Tigger SCHX is a US large cap ETF. That is the Schwab US large cap ETF. It's really just going to be one of your plain vanilla large cap market cap weighted funds. If you're looking to get US large cap exposures, it's a good way to do it. And the reason is because the expense ratio is about three basis points. So don't expect anything crazy here. It tracks the MSCI USA large cap index. It's returned, has tracked it very well as one of those core US large cap holdings. This is a good way to go. Thanks for the call. Then Vestalk, I'm Luke Rare. We have one goal here that's to help you achieve at your financial freedom. Our work continues after the break, so get your questions and now at 888-99 chart. (upbeat music) - Every investor is working to build a secure financial future. How they get there and when they get there, that depends on many factors. The more you learn about how the market works, the better your chances for success. So don't forget to call in Vestalk, 888-99 chart. - The end of the year tends to bring a really bring about compensation planning. And so in board rooms across the country, that's starting to happen right now for 2027. And the numbers are pretty normal, which is why zero people feel good about them. Mercer's August survey of 1,000 US organizations. Saw 3.2% merit increases for 2027. The conference board September survey had that number at 3.1. Total salary budgets, including promotions, pay equity adjustments, retention bonuses. Those are set at 3.5%. So the gap between merit and total is just about half a percentage point. And most workers never see that half point, 'cause it goes to someone else's promotion of retention. Now, the twist that makes this important is that core CPI just came in at 2.4% year over year. It's the lowest since March of 2021. So your 3.2% merit increase genuinely does beat core inflation. On paper, you're getting a real race. But in reality, not so much. 'Cause headline CPI is 3.4. Gasoline is up 27.4% year over year. Gas accounted for over a third of the monthly CPI increase. And the University of Michigan September preliminary reading showed consumers expected inflation of 4.6%. You're over in your next year versus the 4.0, the economist expected. And so it's understandable that sentiment has fallen to 47.8 from 51. So yes, your race beats core, but your race loses to gas. And your race gets demolished by what people believe inflation will be. The expectations gap, that 4.6 versus 2.4, that is doing enormous damage to how households think about their finances. But what should you actually plan against? Honestly, neither of the extremes, core understates your lived experience because it excludes food and energy, which are the prices you can't really avoid to not pay. Headline that overstates the underlying trend because energy is volatile and it can reverse. Gas prices, they can go down. So really what you should expect from inflation from CPI is three to three and a half, which means a 3.2% raise roughly keeps you even. You don't really get ahead, you don't get behind. But even in a world where people expect 4.6% inflation kind of feels like you're falling behind and that feeling regardless of what the math is, changes spending behavior, it changes savings decisions, it changes how people vote, it changes how people spend. And so what I'm getting at is that this expectations gap is as important as the actual gap. People will spend based on what they expect, not based on whatever government agency is reporting. Now that being said, this is something you need to think about, right, budgets aren't final until they're final. If you're in a role where you have legitimate skill that is relevant, then you can utilize your negotiating power. For those who are in these corporate settings where they may be able to get in before budgets are locked, the next couple of months are absolutely where you need to use that negotiating leverage. Because the reality is inflation, how people experience it, is outpacing wages. And now is the time to try and catch up. Hi folks, you already heard it when we came back from one of the breaks, but I do want to remind you that the Invest Talk Retirement Summit is coming up in just about a month now. It's going to be a great event. We're going to have speakers from various industries that are going to be able to give you critical information about how to prepare for retirement and what to expect when you're in retirement itself. As with everything else, it always starts by going to investtalk.com and registering. The spaces are limited, so head over to investtalk.com and check it out today. I'm Luke Guerrero, and Justin and I thank you for listening to another episode of Invest Talk. We also encourage you to tell your friends and family members about our free podcast at downloads that you need iTunes and you can get at Spotify. And while you're over there, we'd really appreciate it if you left us a rate and review. Additionally, if you have not already, I encourage you to check out our Invest Talk YouTube channel where we do have YouTube exclusive content. And we're working on a new series that we're going to bring to you as soon as we're done developing it. Lastly, if today's show made you think about your personal financial circumstances and whether everything is really working together so that you can achieve your financial goals, we at KPB Financial would love to have a conversation. 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