Ep 33: Current State of the Stock Market + Q&A (Pt. 2)

Jess: You're listening to Market MakeHer, the self-directed stock market education podcast that breaks down complex stock market topics in an easy-to-understand manner from her perspective.

Jessie: Lots of prepositional phrases there.

Jess: We're your hosts.

Jessie: I'm Jessen Skipp, the resident finance expert, here to answer all those questions and more.

Jess: And I'm Jessie Dinwi, a beginner to now intermediate level investor, in theory at least, here to ask all the questions about how to do that thing rich people do and make our money make money.

Jessie: But today, we are continuing our questions on questions from the last episode.

Jess: So this is your part two to getting to all of those questions that you all like to submit that we love to answer.

Jessie: Yes.

Jess: Welcome to part two of questions on questions.

Jessie: Can I ask you a question? Me? Cool.

Jess: That was the Taylor Swift lyric I just sneaked in.

Jessie: Of course.

Jess: Every time.

Jessie: But before we get into the rest of those questions, Jess, you said last week that we were in for a rocky ride.

Jess: So can you tell us which part of the roller coaster we're on now? Is there another drop coming or a few loops or are we just on the Tower of Terror now? Like what's happening in the market? We're definitely having a little fall, but this is normal.

Jessie: So we were on a roller coaster, but it was a very, very smooth ride this year so far.

Jess: And I'm going to give you some statistics here.

Jessie: Anytime we pull statistics, I go back to the 19 and 28.

Jess: But the average intra year drawdown for the S&P 500 is 13%.

Jessie: And that's even on up years where we go up like 30 or 40%.

Jess: We still go down 13% at some point within that year.

Jessie: So this is normal.

Jess: Very normal.

Jessie: Is it like a seasonality type of thing or no? Not necessarily.

Jess: April is normally a flat month, especially on a presidential year.

Jessie: It is down 0.01% of the time.

Jess: That's the mean.

Jessie: I actually know that off the top of my head, which is odd, but I do.

Jess: But I do want to prepare our listeners for what's coming next week.

Jessie: So we've had some inflation data coming in hot, like we've talked about.

Jess: Next week, we've got big tech earnings.

Jessie: So Microsoft, Meta, Amazon, and Google.

Jess: Those four stocks alone represent 15% of the S&P 500.

Jessie: That's a lot.

Jess: It's a lot.

Jessie: And Microsoft is the biggest one.

Jess: And we'll get Apple the following week, and Nvidia is a later one.

Jessie: But that means volatility.

Jess: Volatility just means uncertainty.

Jessie: And once the uncertainty subsides, which is what are the earnings, then volatility goes away.

Jess: And volatility is just a rocky roller coaster ride.

Jessie: So just expect that.

Jess: So we're just maybe expecting some of these stocks to maybe go down in value for a minute type thing? It could.

Jessie: It depends on what happens with the earnings.

Jess: Are earnings going to be good enough from what's expected? Because all of this is going to be AI related.

Jessie: It's so expected to be so much demanded good numbers and revenue.

Jess: And if that's not there to the market's expectations, then we could fall.

Jessie: But even more importantly, on Friday, we get PCE, Personal Consumption Expedentures.

Jess: Say Expedentures right.

Jessie: But that is the Fed's preferred gauge for inflation.

Jess: That's like what does that have to do with what consumers are consuming? Yeah, exactly.

Jessie: So what are the prices of inflation? There's also a component for wages, but it's the measurement of what you spend on goods and services, as in households, us.

Jess: And I saw that you're like clips on TV from this week.

Jessie: You're talking about like just who is spending too, which is an interesting thought about how consumers are consuming, but it's like, who are the consumers? If they're the retired boomers, baby boomers, then they're spending differently than some of us millennials who are in debt right now are spending or not spending.

Jess: Yeah.

Jessie: I did my tour yesterday and this week, and I love going on Making Money with Charles Payne because I send him rabbit holes and he lets me talk about whatever I want.

Jess: So it's the start of a rabbit hole.

Jessie: I know.

Jess: So we need to have an episode on that.

Jessie: But the majority of wealth is owned by baby boomers and Gen X, and that's inclusive of real estate as well.

Jess: And millennials own the majority of debt.

Jessie: So therefore, the market keeps saying this resilient consumer.

Jess: And my whole thought is, well, who actually is the consumer? If the consumer is made up majority of baby boomers, which it seems like it is, then again, millennials get the short end of the stick.

Jessie: It's so unfortunate.

Jess: Yeah.

Jessie: Like we're used to it now, unfortunately.

Jess: There's a rabbit hole to go through here, so I think we should have a whole episode on that.

Jessie: Actually, if you guys want an episode, put it in Spotify or in the comments somewhere.

Jess: Let us know.

Jessie: But a lot to watch.

Jess: I want to prepare you for the ride where we'll find support at some point and stop.

Jessie: But the market is a roller coaster.

Jess: This is so normal to have a downturn.

Jessie: And remember, like we've said before, you don't want to be an emotional investor when things go down.

Jess: Remember, we talk about the roller coaster because you're buckled in for the ride.

Jessie: And if anything, if the market goes down, that means things are on sale.

Jess: So like, yeah, I mean, that's one way of looking at it.

Jessie: That's how I like to look at it.

Jess: But for me personally, since I'm in it for the long haul for at least another 20 years or so, something to remember that when some of the, especially these companies that we know how to research, we know how to analyze, we know how to look at all the data and like how they're doing as a company.

Jessie: That's just strategy, not advice, just thoughts.

Jess: Absolutely.

Jessie: Yes.

Jess: Well, you can be prepared.

Jessie: And that's what we're doing right now.

Jess: Instead of saying the market goes up and down, we're saying, hey, the market's going down and this is why.

Jessie: And this is why it could go down further.

Jess: And that way you have about what you want to do with that information.

Jessie: Exactly.

Jess: Proper expectations is what it is.

Jessie: But I'm personally waiting on PCE and big tech earnings.

Jess: We've talked about AI.

Jessie: It's within my investment thesis for the year.

Jess: I still absolutely believe in it.

Jessie: If it has a good valuation, just like Jesse's saying, then it does mean it's going on sale at some point.

Jess: But I want to look at where I feel like the market will turn around.

Jessie: Well, and we did talk about this earlier.

Jess: We talked about how Nvidia shot up by a few hundred dollars earlier this year.

Jessie: But the whole thing about meeting the analyst's expectations.

Jess: So like they were beating earnings, right? So not then like the analysts have to raise the earning expectation.

Jessie: But then if it's like raised too high because of how much it was beating it, then it's like going to miss that at some point.

Jess: I mean, it could just keep going.

Jessie: True.

Jess: So like that doesn't that affect it somehow? It does.

Jessie: Like they put the earnings up too high because it was doing so well? Well, they have a price target, but then they'll have the earnings per share target.

Jess: And those are in the thousands right now.

Jessie: But yeah, that's market expectations.

Jess: If it's below market expectations, that could be bad.

Jessie: It's like when you're at a job and you know your company has these like goals and it's part of your personal annual goal to help reach whatever goal.

Jess: These numbers are, I don't want to say made up because they're obviously based on something.

Jessie: You're setting the goals and now we're not beating them.

Jess: So like, I don't know.

Jessie: I just feel like.

Jess: You've got a point, but we could do a whole episode on this.

Jessie: Yeah.

Jess: We could do a whole episode on everything.

Jessie: I want to understand like who these people are making these rules or these things.

Jess: It's affecting everything.

Jessie: Know that if you set a goal you want to set realistic is a great analogy.

Jess: You want to set a realistic goal.

Jessie: And we could.

Jess: A smart goal.

Jessie: That acronym.

Jess: Love that.

Jessie: Analysts want to make sure that they meet those expectations and they don't want to have too high or too low, but they consistently set the bar a little low.

Jess: Like earnings always beat by a huge percentage point.

Jessie: Interesting.

Jess: And so we use that information.

Jessie: That's financial literacy is being prepared to understand that because that is a great thought.

Jess: But then we could look at the statistics and say, okay, well actually how good are they at picking stock prices? Yeah.

Jessie: And how there's a whole.

Jess: I've already have a rabbit hole in this.

Jessie: So we'll.

Jess: This will be our next episode.

Jessie: Right.

Jess: We'll just do that.

Jessie: So many episodes.

Jess: It's earning season.

Jessie: So we should do that.

Jess: Yeah.

Jessie: We'll do that next time.

Jess: Okay.

Jessie: Cool.

Jess: All right.

Jessie: Well onto the questions.

Jess: Yep.

Jessie: Let's ask Dahlia's question.

Jess: This is from the what are mutual funds and ETFs episode.

Jessie: It's like way back to episode four.

Jess: But here we are.

Jessie: Yes.

Jess: So Dahlia's question is, can you talk more about those fees behind index funds? So I'm wondering where exactly the money that a fund return comes from.

Jessie: Is it an interest company's profits or something else? Stay with us.

Jess: We'll be right back.

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Jess: See you then.

Jessie: So when you are investing, there are lots of different categories of stocks that you can have.

Jess: The two most common are growth versus income and mutual funds and ETFs can fall into that.

Jessie: When you have a fee, it's normally a percentage and the expense ratio is going to come from that fund directly, which could lead to tracking errors and things like that.

Jess: It's not like all of a sudden you're going to get a fee taken out of your account.

Jessie: It just comes from the fund.

Jess: It's not something you're charged.

Jessie: The returns, it's just like a stock.

Jess: If it collectively goes up, then your mutual fund goes up.

Jessie: In value? Mm-hmm.

Jess: Okay.

Jessie: And you could get interest if it has a dividend.

Jess: SPY has a dividend.

Jessie: Apple has a dividend.

Jess: Because SPY has Apple in it and Apple will give a dividend, SPY will also give you a dividend.

Jessie: Do those funds pay out those dividends to you, like quarterly or whatever, or do they just kind of go back into the fund? They pay you quarterly.

Jess: So you get that quarterly.

Jessie: Mm-hmm.

Jess: If you have a fund that has securities that pay dividends, then you will get the dividend back.

Jessie: It depends on how you have it set up or if you're doing a reinvesting of your funds, right? Yeah.

Jess: Exactly.

Jessie: It depends on their brokerage firm and how they do it, but definitely automatically for mutual funds at every brokerage firm.

Jess: But for ETFs, it does vary.

Jessie: So for automatic for mutual funds, does it reinvest in that same fund? Mm-hmm.

Jess: Oh, okay.

Jessie: Mm-hmm.

Jess: And ETFs, you just have to kind of look and see.

Jessie: Exactly.

Jess: Okay.

Jessie: A little more hands-on.

Jess: Okay.

Jessie: Next question, Mal Jones asked, and we did an episode on this, but, are preferred stocks called options? Are they the same thing or different concepts? And we do have a what are preferred stocks episode.

Jess: Yes.

Jessie: So preferred stock, and I think she's referring to stock options, not options options, which is a tongue twister.

Jess: Dare I ask what the difference is? Yes.

Jessie: So you work for an employer, for example, and they might give you stock options as a benefit.

Jess: Oh, I see.

Jessie: And for restricted stock units, we've actually had a lot of questions on that, and we will do an episode on some employer benefits and things like that, because I think it'd be super, super helpful.

Jess: But no, they are very different.

Jessie: They are not those.

Jess: Right.

Jessie: So stock options is what we're talking about.

Jess: Yeah.

Jessie: Option to options are, they give you the right to buy or sell a stock, essentially.

Jess: One day we'll talk about that.

Jessie: So preferred stock are not the same thing as options, stock options though, right? No.

Jess: Do you remember our analogy for this episode? It's my favorite.

Jessie: It's going to give me a laugh already.

Jess: I can't.

Jessie: As if a stock and a bond.

Jess: Oh, yeah.

Jessie: As if a stock and a bond had a baby, it's like their love child.

Jess: Yeah.

Jessie: You'd have a preferred stock.

Jess: I worked a long time ago at Web.com, and they gave me a hundred shares, like stock options or whatever, however it was, when I joined the company type thing.

Jessie: Is that what the option is? Is like, you can have the stock option where you can have this many shares as part of your like joining the company type thing, like signing on, like, oh, we'll offer you this.

Jess: They might have vesting.

Jessie: There's also sometimes a discounted price compared to the market as well.

Jess: That's why it's an option to buy at a specified price.

Jessie: And that's the way that option contracts work.

Jess: So there is a lot of similarities.

Jessie: Okay.

Jess: But not the same thing as preferred stocks.

Jessie: Those are different.

Jess: Not the same.

Jessie: Yeah.

Jess: Not the same at all.

Jessie: Okay.

Jess: Next question.

Jessie: We have another question from Jane Smith Carson, which says, states, other quote unquote educators talk crap about picking stocks.

Jess: Your advice makes me feel more confident to diversify my own portfolio.

Jessie: What are some other Fin Ed resources and podcasts that you like? Okay.

Jess: So I guess Jane is asking your personal opinion on some other like financial education resources and podcasts, you know, that talk about stocks, like, like basically who are the financial gurus resources we could be listening to or looking at for good diversification advice on what, what we could be looking at to pick.

Jessie: We're not here to convince you that we're the best people to listen to, to invest in the stock market or learn how to invest.

Jess: We just want everyone to know how to invest.

Jessie: So I'm happy to share anyone.

Jess: That is great.

Jessie: Why not? If we don't get it, we educate.

Jess: That's Renee.

Jessie: It's too cheery.

Jess: It hurts.

Jessie: What? That was beautiful.

Jess: I loved it.

Jessie: Up and out the cheerleader.

Jess: So good.

Jessie: It was so good.

Jess: It reminded me of a Jennifer Spoddy when she was a cheerleader.

Jessie: I was like, that was you right there.

Jess: I want to grab a book, but it's really high.

Jessie: I'm going to get it.

Jess: Hold on.

Jessie: Okay.

Jess: I'm going to get it.

Jessie: But this is my favorite book.

Jess: Can you see it? Napkin Finance by Tina Hay.

Jessie: Napkin Finance by Tina Hay.

Jess: You've actually told me about this book before and I have not read it yet.

Jessie: I love it.

Jess: I am a listener, not a reader, unless it's a research report, in which case.

Jessie: But it's great because it has all like little infographics and quizzes.

Jess: Oh, I do love a good picture book.

Jessie: Like how cute.

Jess: Who's this? Got pictures.

Jessie: Cool.

Jess: No, like if you've got an ADHD brain, sometimes you need a few little pictures.

Jessie: Look it.

Jess: This explains a 529 plan.

Jessie: Oh, okay.

Jess: I don't know what that is, but that picture looks informative.

Jessie: It is the way to save for college for your child.

Jess: Oh, cool.

Jessie: Okay.

Jess: So yeah.

Jessie: So many good stuff.

Jess: This is my favorite one.

Jessie: This is my favorite resource for learning because it's basically a glossary, but it goes in a congruent order and not sponsored by them, but it's great.

Jess: I just love them.

Jessie: If you want to be up to date on the market, the best thing is listening to the first 10 minutes of Mad Money every day, which is Jim Cramer's show.

Jess: I'm not kidding.

Jessie: He will tell you what happened at the stock market that day.

Jess: There, he's at the nice thing.

Jessie: He like- Yeah.

Jess: In the show, so.

Jessie: He is.

Jess: Yeah.

Jessie: And he just, it's his life.

Jess: It's his personality.

Jessie: I can relate to that.

Jess: But he breaks it down to the self-directed investor, and that's his mantra.

Jessie: And I think that's why we get along so well.

Jess: His mantra.

Jessie: His mantra.

Jess: This is our woman-tra.

Jessie: And you know what? He introduces the podcast every time that- Yeah.

Jess: Introduces me.

Jessie: Very sweet of him.

Jess: And I- I love him for that.

Jessie: Yeah.

Jess: And he listened to it, and he says it's great.

Jessie: So.

Jess: That looks nice.

Jessie: Yeah.

Jess: But he's- He's a swell guy.

Jessie: He's a swell guy.

Jess: He's like, I would never say a bad word about Jim Cramer.

Jessie: I don't understand why he ever gets hate.

Jess: He actually cares about the self-directed investor.

Jessie: He does not need to do what he does.

Jess: Yeah.

Jessie: He doesn't.

Jess: So.

Jessie: Anyways, I digress.

Jess: That is a podcast you can listen to, though, if you don't want to watch that.

Jessie: And just the first 10 minutes is essential if you are someone who follows the market constantly.

Jess: Bank of America Global Research.

Jessie: I read that every day.

Jess: Oh, really? Mm-hmm.

Jessie: It is very jargony.

Jess: Other podcasts, investing podcasts.

Jessie: Josh Brown's is pretty good, Compound and Friends.

Jess: Money with Kitty's good.

Jessie: Fresh Invest, the one by Fidelity.

Jess: I think that one's really good.

Jessie: And they bring in a lot of experts.

Jess: Really love that one.

Jessie: Global Research, also from Bank of America.

Jess: If you don't have an account, they have a podcast, too.

Jessie: It is dry.

Jess: But informative.

Jessie: Very informative.

Jess: If you really want to know what's going on.

Jessie: Yeah.

Jess: And our friend, Stevie Green, they have a podcast, The Bid, that they produce.

Jessie: That's fantastic.

Jess: Black Rocks, I've listened to it.

Jessie: It's also research.

Jess: So all of these research reports, they all have podcasts.

Jessie: Check those out.

Jess: Yeah.

Jessie: And then listen to those.

Jess: And if you don't get it, ask us the questions.

Jessie: And then we'll just make this loop of information.

Jess: Explainer videos and podcasts to answer what's not fully understood.

Jessie: Exactly.

Jess: And also, two more, irs.gov, because anything tax-wise, it's there.

Jessie: And the FRED website for economic data.

Jess: You can go down a rabbit hole.

Jessie: You could see assets by generation, liabilities by generation.

Jess: You can just go through so much data.

Jessie: And I find that informative and helpful.

Jess: Yeah.

Jessie: I feel like more people should know about that one.

Jess: I had never heard that until you told me about it.

Jessie: I didn't know all that data was just available.

Jess: Yeah.

Jessie: It's so good.

Jess: That's why, when the government was going to shut down, I was concerned with, okay, well, if the government's going to shut down, that means that government employees aren't going to work.

Jessie: Government employees produce this job data and all this other data that we use to gauge inflation.

Jess: And if inflation is our biggest issue with the market, but we don't actually understand what's going on with inflation because the government shut down, that wreaks havoc.

Jessie: It's all related.

Jess: It's not work.

Jessie: It's literally around you.

Jess: Chaos.

Jessie: I can't say it enough.

Jess: Eclipse season, Aries season.

Jessie: Things are happening.

Jess: They are.

Jessie: Okay.

Jess: Next question's from Yankees.

Jessie: I see so many posts about less and less people buying homes, so then why are prices still going up? Well, Yankees, all of you, look at this.

Jess: So I just glitched in my head what you said.

Jessie: The smart on one subject, guys, I want you to know that.

Jess: So it's supply and demand.

Jessie: We have a housing supply issue.

Jess: The Fed raises interest rates.

Jessie: It creates a restrictive environment.

Jess: It constrains money supply, which means credit's hard to get.

Jessie: And if credit's hard to get, and then it's more expensive to get your mortgage, it tackles the demand side.

Jess: Yes, that is a help.

Jessie: But the bigger issue is we don't have enough houses.

Jess: And then it turns into this really big conundrum, honestly, that the Fed's in.

Jessie: Because if they keep interest rates where they are, or they raise them higher, you're not going to sell your house.

Jess: It literally cost me, in this moment of time, if I were to buy the house across the street from me, 40% more.

Jessie: Why would I- Interest rate? Yes.

Jess: Why would I sell my house? I'm not.

Jessie: My expenses would go up by 40%.

Jess: No way.

Jessie: Oh, yeah.

Jess: That's what I sold, and then I'm still renting.

Jessie: It's now.

Jess: It wasn't cheaper to rent, but now it is.

Jessie: Yeah, for sure.

Jess: Which is insane.

Jessie: That's why prices are still going up, because everything is supply and demand.

Jess: So the Fed is tackling demand.

Jessie: It's going down, but we still have a supply issue.

Jess: Which is interesting.

Jessie: That's why, normally, in this type of environment, if you were to go back in time and see when the Fed raised interest rates, the housing market really takes a hit.

Jess: But home builders, like DR Horton and all of those stocks, are still doing really well because we have a housing supply issue.

Jessie: Interesting.

Jess: Yeah.

Jessie: So that's why.

Jess: That's why.

Jessie: Now you know.

Jess: Now you know.

Jessie: Owings, half the battle.

Jess: The other half is lasers.

Jessie: Yes.

Jess: Terry Nicholson asked, my son will be entering the workforce soon.

Jessie: How can I set him up for financial success? She talked about it a little bit already, but- A little bit, yeah.

Jess: So again, I really want to do an episode on this.

Jessie: start early and often, and you just want to create those habits at a very, very young age.

Jess: Which means when you give them allowance.

Jessie: And then when you give them allowance, I am not kidding, tax them.

Jess: Make them pay rent.

Jessie: You're like, here's your $10.

Jess: I will now take $1 away.

Jessie: Ah, yes.

Jess: But it forces them to budget.

Jessie: And then if they want to buy a Lego set, then they have to save for it.

Jess: But you teach them the value of money early.

Jessie: I would be so mad at my parents for taking rent money out of my allowance.

Jess: Cold, cold.

Jessie: I'm mad.

Jess: But- I mean- You don't take it, like put it in a savings account.

Jessie: Right.

Jess: No, yeah, no.

Jessie: You still give it to them.

Jess: But like- Or I guess at least tell them that.

Jessie: Be like, I'm taking this.

Jess: And be like, look, I'm teaching you a lesson.

Jessie: You're going to get it back.

Jess: But like, this is how it works.

Jessie: Yeah, exactly.

Jess: But it teaches, it's a good thing to learn.

Jessie: Because that's the, if your parents didn't do that, and mine didn't, then you get your first paycheck and you're like, where did they go? Yeah.

Jess: They did prepare me for that.

Jessie: They're like, let me tell you about this thing called taxes.

Jess: And like, you're going to find out.

Jessie: And I'm like, oh, that's what that meant.

Jess: My dad did though, like when he, when I bought my first car, he like made me do a little contract with him.

Jessie: And if I was like one day late, it was a $10 fee.

Jess: So he like did that.

Jessie: So I do, I did like have a good credit score because I understood like the credit concept and the late fees and all that, that helped.

Jess: That's awesome.

Jessie: I love that.

Jess: So I was like never, I've never been late on any bill payment ever.

Jessie: Yeah.

Jess: My dad was so mad at me because I take his Christmas money and he's like, it's not fair.

Jessie: I want to buy something.

Jess: And now he's like, oh, I've got how much money actually is.

Jessie: It's fine.

Jess: Yeah.

Jessie: Pretty cool.

Jess: Once it starts adding up, you realize how it all works.

Jessie: Yep.

Jess: But that's how you can set them up for financial success.

Jessie: You break their hearts with their yuck.

Jess: But then, so what do you do with that money that you're saving for that? Like they're taking the rent money out.

Jessie: Where are you stashing that? In a custodial account.

Jess: Buy some stocks.

Jessie: Compounds.

Jess: All the way.

Jessie: And like, you're like, like after a while that you have some money saved up to be like, okay, guess what? All that rent money I took from you because I'm such a nice parent, I actually saved it.

Jess: And now it's in this account and you can buy some stocks and this is how, and then you can teach them about stocks or whatever.

Jessie: Oh yeah.

Jess: Definitely do that.

Jessie: For sure.

Jess: Yeah.

Jessie: For sure.

Jess: For sure.

Jessie: And do what you can.

Jess: Like I also get that sometimes that's not feasible.

Jessie: Yeah.

Jess: And I think I shared that, but I, when I was saving for coal, I started with $20 a month because that's all I could afford.

Jessie: And now I'm up to, I think $250 a month that I do.

Jess: That has really added up over time.

Jessie: Oh yeah.

Jess: I bet.

Jessie: He's lucky.

Jess: Good.

Jessie: He is.

Jess: He's dancing.

Jessie: Hear that call? You're lucky.

Jess: It's like, yeah.

Jessie: It's like, yeah.

Jess: I'm going to outsource that to my mom.

Jessie: I know.

Jess: I'm beautiful.

Jessie: All right.

Jess: Go play on your computer.

Jessie: Okay.

Jess: All right.

Jessie: Last question from anonymous.

Jess: Dividend stocks.

Jessie: What are they and how do they work? Oh, we kind of answered this earlier in a way.

Jess: Yeah.

Jessie: Yeah.

Jess: So.

Jessie: I mean, there's dividend stocks and ETS, but then you can also just buy stocks like as a strategy, right? Like a strategy is just buying dividend stocks.

Jess: Absolutely.

Jessie: All right.

Jess: They actually announced this.

Jessie: They don't have to pay you a dividend.

Jess: And there's actually a hierarchy of payouts because when you buy a stock, you own a piece of the company.

Jessie: And if the company goes bankrupt, there's actually a list of people they have to pay first.

Jess: And that's why preferred stocks are nice, right? Because they are stock.

Jessie: That means you're preferred over all the non-preferred people and you still get your dividend payout.

Jess: You are preferred stock.

Jessie: That's right.

Jess: You have to pay dividends on preferred stocks before you do common stocks.

Jessie: And if they go bankrupt, you have to pay preferred stockholders first.

Jess: Yep.

Jessie: And not the commoners.

Jess: It's really easy because it's in their name.

Jessie: Yeah.

Jess: I might as well call it peasant stocks.

Jessie: Might as well.

Jess: Those are penny stocks.

Jessie: All right.

Jess: Or not.

Jessie: That's funny.

Jess: So, okay.

Jessie: Dividend stocks though, if it's a common stock that gives you a dividend, they announce it and they say, hey, we're going to pay a dividend.

Jess: That's the announcement date.

Jessie: And then they have an X date where they say, you have to own the stock in order to qualify for this dividend.

Jess: It's the day before the X date.

Jessie: And then they have a pay date.

Jess: And this is the day that you get the dividend.

Jessie: But that's all too much information.

Jess: You could literally just pull up a stock quote on your brokerage website and it would say this stock pays this much dividend.

Jessie: Actually, we'll just pull one up.

Jess: Yeah.

Jessie: Because it shows you a percentage and some pay higher dividend percentages than others.

Jess: Right.

Jessie: Apple.

Jess: Apple stock is a W stock.

Jessie: Apple stock is a W stock.

Jess: So, Apple gives a 0.57% dividend, which is 90- 0.57? Well, it's a growth stock.

Jessie: Oh, okay.

Jess: Yeah.

Jessie: Yeah.

Jess: That one's, I'm like, I actually have like a list of dividend stocks.

Jessie: Hold on.

Jess: Well, the biggest one is AT&T.

Jessie: Yeah.

Jess: I was going to say, it was like one of those.

Jessie: Yeah.

Jess: Yeah.

Jessie: So, AT&T gives- Which is the one we did for the preferred stock episode, right? Yes.

Jess: Yeah.

Jessie: So, this one has a dividend yield of 6.63%, which is $1.11 and you'll get paid that quarterly.

Jess: Per stock? Per share? Per share.

Jessie: That's a big portion.

Jess: Some people, and I think it's kind of the, from what I've gathered from life for listening to everyone talk about this stuff, it seems like that's a strategy people like to have a little bit maybe later in life.

Jessie: They kind of like to switch over to dividend stocks to kind of like make more, or no, or is it earlier? Okay.

Jess: Yeah.

Jessie: You're right.

Jess: Yeah.

Jessie: Oh, they're taxed differently too.

Jess: Oh, I forgot about that part.

Jessie: They are taxed differently.

Jess: Mm-hmm.

Jessie: But yeah, that's the point because you're aggressive when you're younger because you need to grow your wealth.

Jess: Once you grow your wealth, you want to protect it, so you create income off of it because the whole point is to not work anymore and retire.

Jessie: Right.

Jess: That's why we're here.

Jessie: I have some dividend stocks in my portfolio just because I like seeing that money quarterly come back into my account and then I can pick new stocks with it.

Jess: I like it.

Jessie: It's fun for me.

Jess: I'm like, ooh, look, with all my dividend money, I'm going to go buy this stock or whatever.

Jessie: It's kind of like my play money for right now in a way.

Jess: I think that's good.

Jessie: Well, I mean, you are 403.

Jess: That's true.

Jessie: I think you should be happy.

Jess: Yeah, all the time in the world, though.

Jessie: Thank you all for submitting your questions, and if you have more questions, please send them our way.

Jess: You know where to find us.

Jessie: We have all the links and all the places.

Jess: We do.

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Jessie: Please share this episode or your favorite episode with your people.

Jess: And if that's too much, just leave us a quick little star rating, five stars if you're feeling so generous because it really helps us spread the word.

Jessie: Yes, it does.

Jess: You know, we work really hard on these.

Jessie: Probably going to have another stay up till midnight night.

Jess: I was going to do it anyways, because we all know that the Tortured Poets Department is releasing at midnight, so I have no choice.

Jessie: But until next time, this might be your CD, though.

Jess: This might be the one.

Jessie: This is the era for you, Jessie.

Jess: This might be the one for me to be a fan.

Jessie: Is it? This is it.

Jess: We're going to find out.

Jessie: That's it.

Jess: I'm not going to have a choice.

Jessie: That's true.

Jess: Until next time, keep learning, keep earning, and keep breaking.

Jessie: Remember, investing involves risk.

Jess: There is always potential to lose money when investing in securities.

Jessie: Market MakeHer provides educational content and resources for informational purposes only.

Jess: We are not registered financial advisors and do not provide personalized investment advice.

Jessie: Any information provided by Market MakeHer on our website or podcast is not intended to be a substitute for professional financial advice.

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