Chapter 9

While Scott thought his vacation was enjoyable he was glad to be back in Belton. He knew he had seen some interesting things and may have turned down seeing one more interesting thing and having an enjoyable time. It was time however to get back to work. With inflation rising along with gas prices, all indications were that the Fed would start tightening and that was not good news for stocks. He gave Maggie and Beth instructions on putting in trailing stop losses on several of the stocks that were in his and his client’s accounts.

Both Beth and Maggie asked him how his vacation had been. He gave them a rundown on the places he visited and what he had seen. That Sharon Anders was instrumental in arranging his touring the movie-television studios with a personal guide was mentioned along with who he met in doing this.

Beth said Scott must have impressed Jon Handley and Rona Cartright because both of them sent emails asking for information on how Scott could become their financial advisor. She responded by sending them the necessary information.

She laughed a little when she said, “Scott, you are now going to be an advisor to the Stars.”

In mid-week, Beth told Scott there was a Caley Morgan on the phone who wanted to talk to Scott. Caley said she was a television producer for Channel Four.

Picking up the phone he said, “Ms. Morgan, this is Scott Martin, what can I do for you?”

“Please call me Caley. I am a producer for our television show called “Opinions.” I don’t know if you have watched it but it’s a show that is taped Friday afternoons and is shown on Saturday evening after the late news. Clarence Thomson is the moderator and it’s him along with four other people sitting around discussing current events. Because of what is happening in the economy we would like you to be a guest this week.”

“Caley, I am not an economist, I am a financial advisor.”

“I know that, but because what is happening could affect people’s investments we want you to give your insight as to what people should be doing regarding investing. Paul Conners who is a regular on this show recommended you. Can I count on you being at the station at one this Friday?”

There was a pause as Scott thought about it and said, “Who else is going to be on the show?”

“Besides Clarence and Paul, there will be Lamar Palmer who is an oil executive, and Nancy Hosman who is an economist from UT. It should make for an interesting discussion.”

“Okay, I will be there,” and after she gave him the station’s address he ended the call.

Beth, Maggie, and his parents were excited when he told them of his forthcoming television appearance. He phoned Donna and told her as well. He asked her out to dinner afterward but she turned down the invitation saying she had a prior commitment. He hoped that commitment wasn’t a date but with her looks that was a possibility he hoped wasn’t happening.

At the agreed time Scott was at the television station. He told the receptionist he was there to see Caley Morgan and after she checked his name on the list she told him to take the elevator to the third floor. Stepping off the elevator he was greeted by Caley. He quickly had the impression Caley was a highly organized individual as she extended her hand to him and thanked him for coming. She guided him to the studio and introduced him to the other people.

Scott shook Paul’s hand and asked if he had installed the downriggers. He said he had and they were working out well for him. Paul said he was surprised more people hadn’t done it.

The show started with Clarence introducing the guests and then he asked Nancy Hosman to give an overview of what is happening in the economy. She did that and said there are all the indications because of rising inflation the Fed will have no recourse but to start tightening by raising rates. Doing that could cause a recession but it is too early to tell if that will happen she said.

Scott was asked because of this possibility what is he telling or doing as a financial advisor for his clients.

“If the Fed raises rates, it will put a damper on the bull market we have been experiencing. I have put in trailing stop-loss orders to protect the profits on several stocks. If those orders are executed there are some stocks that have already dropped in value that I would consider purchasing since they are hedges against inflation. I will hold onto the majority of these funds and wait to see when a bottom has been reached which is usually signaled by the rates either holding steady or decreasing. When that happens I will probably buy back most of the same stocks that I sold or maybe purchase some bonds for income and diversity since the rates will be high.”

“I know it sounds like I am timing the market but I don’t want people to take it that way since studies have shown the long-term trend is for the market to go up. I also don’t mean to say I can tell when a stock has hit the bottom. Doing that is like trying to catch a falling knife and I am not that good. But if there is a significant correction in the market, there are stocks out there that pay and have paid over many years an increasing dividend and all indications are they should continue to do that. I won’t name any individual stock since I could be accused of doing a “pump and dump.” I will say an investor may want to consider purchasing ETFs that are made up of stocks that have paid increasing dividends over the last ten and twenty-five years. For the long-term investor, they should have some funds in an S and P 500 index fund because like I say, the long-term trend in the market has been for it to go up.”

Clarence asked Lamar Palmer about the rising price of gasoline. Lamar responded saying, “While there are some outside factors that are causing supply problems, this supply problem and price increase could be greatly reduced in a short time. This can be done if the present administration would admit it was a mistake in what it did when it first came into office with executive orders and just go back to doing what the prior administration was doing as to petroleum production. Doing that would be a significant step in the right direction. The petroleum industry supports the effort to go green but the present rush to do it cannot make it happen overnight.”