Tips for job hunting, diversifying your portfolio: Wealth!

On today's episode of Wealth! Yahoo Finance's Brad Smith explores the trading day's biggest stories and top personal finance tips, from investment opportunities to grappling with high mortgage rates.

The US added 272,000 jobs in May, surpassing the 180,000 economists projected. As competition for certain jobs heats up, SANDWINA founder and CEO Bridget Lohrius stresses the importance of a great LinkedIn profile: "It's all about building your brand. And that's everything from, of course, building a show-stopping resume and cover letters and building your brand positioning statement." For any job seekers who land contract roles, Yahoo Finance columnist Kerry Hannon breaks down how they can save for retirement when employer-sponsored plans are not available.

Nvidia (NVDA) is gearing up for a 10-for-1 stock split after the market close. Winthrop Capital chief investment officer Adam Coons notes that the stock split will open up an opportunity for investors who have sat on the sidelines as the price becomes more attractive and points to the growth of AI benefitting the cybersecurity sector. TIAA Wealth Management chief investment officer Niladri “Neel” Mukherjee explains that amid the AI story, "[what] investors need to do is be very disciplined. They need to be diversified across different asset classes. Most importantly, they need to have their financial plans in place and stick to it."

The latest data from Freddie Mac reveals that the 30-year fixed-rate mortgage has dipped below the 7% threshold, settling at 6.99%. William Raveis Mortgage regional vice president Melissa Cohn believes that the "American Dream" of homeownership will become more attainable as interest rates decrease, stating, "It is quite likely that when interest rates come down, more buyers will come into the marketplace, and real estate prices will move upward."

This post was written by Melanie Riehl

Video transcript

Welcome to wealth, everyone.

I'm Brad Smith and this is Yahoo.

Finances guide to building your financial footprint.

Our community of experts will give you the resources, the tools, the tips and the tricks that you need to grow your money.

Hey, on today's show, the Bureau of Labor Statistics, big jobs report just dropped this morning.

We'll take you inside the latest data out of the labor market and explain what it means for your job hunt plus mortgage rates, towing that 7% line.

We're bringing on an expert to help you with your home buying journey plus how to find the missing money that's owed to you.

We explain that you could cash in on some missing.

Well, cash.

The US economy added more jobs than expected in the month of May the labor market.

Excuse me, the labor market here adding 272,000 non farm payroll jobs specifically, uh taking a look at the actuals versus the estimates that is significantly higher than the 180,000 expected by economists.

However, the employment rate rising to 4% reaching that level for the first time since get this January 2022 for more on what this means for job seekers.

Let's get to Sandria founder and CEO Bridget Louras who joins us now, for more.

Bridget, just wanna start off with your broad read on today's jobs report.

Yeah, Brad, it's great to see you and, and absolutely what you all have been reporting all morning.

Right.

There's, it's been a big week.

Lots of reports, lots of data to sort of, um, p over.

But it was a big surprise to see this um, explosive sort of growth in May when predictions were significantly lower.

Um, health care, government and leisure and hospitality, of course, leading those gains, average hourly earnings higher as you just pointed out.

But here's the thing, Brad, these big headlines don't tell the whole story, right.

The Bureau of Labor Statistics Report is of course, a tale of two surveys.

Uh they survey households and they survey employers.

So, you know, there, there's gonna be discrepancies there.

Um, unemployment, as you just said, hit 4% for the first time, uh since January of 22.

Uh And importantly, the number of open jobs is the lowest Brad.

It's been in three years and jobless claims are also climbing and the number of available jobs per job seeker reached its lowest level since June of 2021.

And here's what I tell you, Brad.

These numbers actually align much more closely with what we're seeing and hearing from our clients.

It's tough out here Yeah, absolutely.

You know, you, you mentioned this a moment ago, a tale of two surveys and that was much of the reaction that I was seeing by some economists, uh, on the inter webs after the report dropped.

And after I had a moment to kind of catch a breath or step off set for a second and then come back here to start our wealth show.

And many of them pointing to that household survey, what jumped out there that people need to kind of be reminded of here as we're really evaluating.

Sure, the headline beat.

But then there's still some murks under the water there.

Yeah, it's so many things to kind of dig through.

Right.

But clearly what, uh, households are reporting is, a lot of people lost their jobs.

Right.

Um, and businesses of course, are reporting that they're, they're, they're, they're, they're holding, um, they're planning to continue hiring, but they're even acknowledging that they're planning to hire at a slower rate.

Look, I'm not an economist.

My job is to help people find joy and find jobs, but it's clear that there's a gap between what employers are reporting and what households are reporting.

So it will be interesting to see how revisions come out in next month's report.

Yeah.

And it seemed like from what I was seeing the difference in those was what we were seeing on both full time and employment versus that part time employment prison where that came into play on the tail of the two surveys as we were breaking down there.

So let's, let's hold up.

Wait a minute.

Can we put some joy in it?

Because people wanna know as they're perhaps out there throwing their hat into the ring for the positions that are open, what they should be remembering as they're on the job hunt right now.

Bridget.

Absolutely.

And I think Brad, what we're seeing and, and doing with our clients is really trying to modernize our approach to the job search, right?

It's not, it's no longer spray and pray.

Uh, as people say, you know, just pummeling out your resume to as many online job postings as you can, that is an ineffective strategy.

And in fact, what we're hearing from recruiters is they're, they're done with that approach.

A lot of recruiters are saying they're not even posting jobs online anymore because it's just become too overwhelming.

So job seekers really have an opportunity here to get savvy and strategic about how they're approaching their job search.

So we Brad have sort of a three pronged approach and it's really about managing your mindset, building your brand and, and plotting your plan.

Uh, so managing your mindset, this is really all about getting in touch with yourself, getting real about the market so that you can manage your own mindset and get resilient and tap into the grit that you have and that you're going to need to get through the process because it is tough out there.

Um So this includes things like getting a AAA team around you of people who are gonna be cheering you on and supporting you through the journey.

It's also about cataloging your many incredible strengths so that you can boost your confidence as you move through this process.

So that's kind of what we cover in managing your mindset.

Secondly, it's all about building your brand and that's everything from of course, building a show, stopping resume and cover letters and uh building your brand positioning statement.

But this is really Brad all about that linkedin profile.

I just recently read the craziest statistic that hiring managers spend 25 times longer on your linkedin profile than your resume.

And I can tell you uh test here, three clients in the last week have told me that hiring managers that they've interviewed with have said, don't even bother sending me your resume.

I'm gonna look at your linkedin profile.

So that profile is absolutely critical tip to tail the banner photo behind you.

You know, don't put your dog on there unless you work for a pet care company.

Uh Every, every centimeter of that real estate is so valuable.

So you want to spend the time on it.

It deserves and get those recommendations up there.

Put the featured uh section, make the featured section really shine and sing.

It's where you have an opportunity to showcase your skills your strengths and how people think of you.

Uh And then finally, I would say, um it's all, it's all about getting that plan together, which is of course, identifying the companies and the leaders that you're interested in.

But this is all about next gen networking, Brad.

And I know you've had some guests on recently talking about what modern networking looks like.

Yeah, that's absolutely right.

And, and how important that is for uh potentially getting into that new position.

And just lastly while we have, you only got about 45 seconds left when it comes time to negotiate a salary, especially in this labor market right now.

What are some of the most effective strategies you're seeing being enacted?

Yeah.

So the great news is that a lot of states are now requiring pay transparency.

So uh with very little effort, we can do some research online to see what are sort of standard ranges for positions.

And then I, I would encourage people to, to talk about it.

That's what we say, coach our clients to do have the conversations with peers, have the conversations with people you don't even know because with visibility and transparency comes power and knowledge.

San Doo founder and Ceo Bridget Laurus Bridget.

Great to see you.

Thanks so much for joining us this morning.

Thanks Brad.

It's great to see you.

Likewise.

Saving for retirement can be a daunting task for workers even more.

So for contractors or freelancers who are v vulnerable to the ebb and flow.

Well, the ebb and flow of their income streams for more on how this sector of the workforce can tackle retirement.

Let's get to Yahoo finances, Carrie Han and carry clearly.

I've been studying too many tickers this morning.

Everything that's 34 letters is just a ticker to me.

But the ebb and flow here break this down for us.

Uh, Brad.

It is really a big deal because there's something like more than one in 10 US workers is a contractor or independent worker.

And what that means is you don't have access to an employer provided retirement plan and you may think.

Oh, well, that's fine.

But the fact is that the statistics show that just a very small percentage of people, like 5% start saving for retirement if they're not automatically enrolled in their retirement account at their employer.

And when they are automatically, you know, enrolled in that plane at their employer, it bumps up to like 90%.

So you have to do it yourself and it's super hard.

Uh, because a lot of people, especially if you're just getting out of school and you're starting your 1st 1st job.

You go.

Oh my gosh.

I can't possibly squeak by and save for retirement.

I can't afford it right now.

So you kick it down the road and that is something that, that you can't afford to do.

So it's pretty simple there.

Are just a couple of easy ways that self employed people can set up their own retirement account and it starts with the, yes.

Yes.

Yes.

The individual retirement account.

Ira s so you've got the traditional Ira and you've got something called a Epiasep Ira, which is just a simplified plan that allows you to put aside more than the traditional Ira does.

And both of those come in a Roth format.

So that means the first two, the traditional ones you get tax, you don't pay the taxes going in, but you pay the taxes when you take them money out of retirement with the Roth as, as, uh, the listeners probably all know you, uh, pay the taxes going in but not when it comes out at the end, which is really sweet as well.

Um, then there is something called the solo 401k.

So you can set up a 401k just for yourself if you're a solo employer and you are the sole employee.

Um, and that lets you, uh, set aside even more.

So those are the three big ways that, um, you're allowed that you can simply do this.

The final one I like is a health savings account.

So most freelancers are enrolled in pretty high deductible plans.

If you're in one of those plans, you can open a health savings account.

And with that account, it's like a triple whammy because, uh, in a good way, you don't pay tax going in you don't pay taxes on how that uh grows and accumulates over the time it's in the account.

Nor do you pay taxes coming out if it's used for health benefits.

So, I think there are more nuances.

All of these have income limits, all that check out with the IRS.

But it's really great.

The final thing I'm gonna say is states are now getting into the game.

Several states are now offering individual retirement account programs for self employed workers.

Oregon is one of the first ones out of the gate doing that, but Virginia does it.

California.

So, so really take a look and see if your state has that.

Now, Carrie, what can younger workers in this, in this situation do to push back on the feeling that retirement is so far away that getting started can take a while.

Yeah.

Oh, that's such a good question, Brad because I don't know about you.

But for me, it was like, are you kidding me?

Retirement?

I mean, that was like so far in the distance I couldn't even imagine it.

But I suggest that you do this little mindset switch.

You think of it, replace the word retirement with life.

So you are saving her life.

You are saving for all those great rich life experience you wanna have and, and if you refocus it, then it seems to have a little more meaning and it makes it a little bit easier to get started and the other final thing I would say Brad is put this on cruise control.

This is so critical if you work for yourself, automate, automate, automate.

If you can just from every paycheck you get because it can be erratic, it can be up and down as we mentioned at the top.

If you do a set amount from each paycheck going directly into that individual retirement account or whichever one you see set up at the mutual fund company or your credit union or your bank, wherever you set that up, if you automate that.

So every month or twice a month, a certain amount goes in there, even if it's a tiny amount at first, it really gets the discipline and it allows it to accumulate and trust me, you honestly don't miss it.

If you just do it automatically.

Yahoo finances own carry, Hannon carry.

I feel a day closer to retirement than I did yesterday.

Appreciate it.

Thanks, Brad.

Let's switch gears here and talk a little NVIDIA.

NVIDIA is set to complete its highly anticipated 10 for one stock split.

After the market closed today, the strategic move aiming to make the stock ownership of the chip giant more accessible but with greater accessibility to investing in NVIDIA, what should investors consider on the next chapter for the A I darling, Adam Moons Winthrop Capital Chief Investment Officer joins us now to discuss Adam.

Great to have you here.

So I mean, this is the big day after the market closed and then Monday we'll see the prices reflect the 10, for one split.

This is not the first time we've seen a split for NVIDIA nor a, a mag seven company over the past year.

So all of these things considered what makes this one different.

Yeah.

First, thanks for, thanks for having me.

It's probably gonna be a handful of people that opened their account on Monday and didn't see this coming and I wonder what happened.

But, uh for, for those paying attention, I think, you know, one of the big things, uh that you see generally with a, a stock split and it's to be expected with a, with a stock that's, that's hit 33 Trion market cap is that it, it does let more investors into the stock and that can sound like a good thing.

And generally speaking, it is great to open up, uh you know, the ability for, for more people to invest in, in, in a great company like NVIDIA.

The downside of it is though, is that large share prices, you usually our position for institutional investors who tend to be more long term and, and their decision making is long term.

And so they're not as visceral in the reactions to maybe an earnings release or some other news event that would cause them to, you know, sell out of an entire position relative to retail investors who would buy in and, and they might have a more emotional attachment to the stock, both buying and selling.

So that can lead to heightened volatility as you start to dilute the institutional buyers, introduce more retail investors that like I said can be a little bit more quick and emotional with their buying and selling decisions uh of a stock like this, NVIDIA has been the poster child for much of the A I fueled gains that we've seen over the course of the last year and change.

And so many people are trying to figure out as well.

Does it make sense if they're not invested right now to potentially add to the portfolio come this stock split as it looks to be more affordable, at least on price value.

Right.

Yeah, I mean, obviously the, the whole A I trade has, has gotten a lot of traction and if you have been out of it, it's probably difficult to watch these stocks that have doubled, tripled quadrupled.

So it, it, it probably will open up investors who have sat on the sidelines.

Now keep in mind any investor who has, you know, a holding in in the S and P 500 through an ETF or something like that, they do still own it piece of it.

So I hope investors kind of keep that in mind when they're trying to decide whether they want to, you know, buy this individual stock.

But I think, you know, one thing to look at is, this is a stock that has already priced in a lot of that upside.

And so what we're trying to do is find the other areas to play machine learning, artificial intelligence in a way that can complement what NVIDIA is providing with their chip set.

Because, you know, right now that is a one trick pony.

They, they are GP us that help with the whole, you know A I processing.

But there are a lot of other companies that are using machine learning to enhance their current business model.

And that's where we're starting to focus as we start to, you know, sell our positions in NVIDIA because we have cut, as we've seen the stock go up and up and up, we're prudent in taking, taking gains.

And right now we've, we've just about halved our, our position in Nvidia's Adam.

And uh and so now as you're looking at what we could maybe summarize as an A I field broadening, then some of the other companies that can either be beneficiaries or uh as we've heard from some of our prior guests looking at things like utilities that are gonna have to power data centers, all the things that are kind of interconnected into where this demand is really pushing the broader market as well.

What are some of the plays that you're considering?

Yeah.

So it's important to understand that obviously the whole A I I is, is growing and it's not totally certain how big it is right now and how big it can get.

Um, but we do know that it is going to be a large market, I think no matter what, uh there's a lot of unknowns in A I but the one known is that it is real and it is going to be a very, very large market.

So we're looking at a way to play, like you said, uh one way is obviously with, you know, introducing increased complexity uh in technology and how we use technology that also increases the risk from cyber attacks.

And so I think that if you're looking for themes within A I, you can't ignore cybersecurity as a whole and there are a few different ways to play it.

But right now, I'm really like crowd strike.

They are one of the leaders within the space and using machine learning to have a more advanced version of cybersecurity.

Uh The valuation is a bit rich, so be careful there.

Uh But I still like the stock, I like the trajectory.

I like the business momentum, not just the stock momentum because they do have a wide mode, their, their acquisition cost for customers is the lowest in the space.

So that's one of the reasons I like crowdstrike.

Additionally, you've seen uh Qualcomm has come out with some new chip sets that kind of compliment uh artificial intelligence and this is in laptops and other devices that can help with you just said that the power consumption of them.

And so I think that's a big piece.

It's looking at all the different ways to slice this up.

And you can find winners not just in one stock because that's really the, the, the way to be careful here is to diversify away from the concentration.

We know A I is going to continue to grow.

But staying in one company can create some difficulties.

So spreading those bets out and like say Qualcomm uh Crowdstrike and then we also like alphabet.

That's a more van and a but obviously a big player in the A I space.

Yeah, Adam, we only got about 30 seconds left here.

Should investors be concerned about the short bets that are growing against NVIDIA right now?

About $34 billion according to S3 partners?

I mean, do you think about how that compares to the $19 billion against apple $18 billion against Tesla?

You can essentially combine those two and still be in the ballpark of the short positions that have mounted with NVIDIA.

What do you make of that?

Absolutely.

And it's just like the, the, the stock split is something like that can add to the volatility.

You can actually add to the upside.

If there's a short squeeze, you could see a large pop in stock, but also it does increase the risk to the downside.

So I think it's just something to be careful of something to be aware of in your position sizing.

Remember that this is a high volatility stock.

It's been going up and up and up and the volatility has been the upside.

But that same thing can happen to the downside.

So just make sure you protect yourself with managing your position sizing Adam Koons, who's the Winthrop Capital Chief Investment Officer, Adam.

Great to see you.

Thanks so much for joining the show with us tonight.

Certainly the May Jobs report coming in hotter than expected.

But what does this mean for your portfolio?

We'll speak with the expert.

Next, the US economy added more jobs than expected during the month of May.

The reports telling the opposite story from data out this week that suggested the economy is slowing which was fueling hopes of a rate cut to break down what to expect from equities amid a murky macro backdrop.

We've got Neil Mukherjee who is the Tia a wealth management division chief Investment Officer Neil.

Great to see you.

Great to have you back in studio with us.

Always a pleasure.

So first and foremost here, I mean, we we were speaking about this report earlier actually, the and one of our guests calling it a tale of two surveys here.

I mean, what's your read in on the data that we got here this morning?

This is a trend that's been going on for some time now, right where the household survey has kept showing that the economy is losing jobs, there is no traction.

It measures jobs slightly different than the payroll side of the equation does payrolls tends to count your jobs who are, who have people who have multiple jobs, for example.

So it potentially overstates the number of jobs the household does not take into account the immigration aspect of it.

The truth of the matter is we are somewhere in the middle and we will know that in a few years when everything is reconciled.

So a couple of things with respect to this jobs number a the economy is not falling off bed, it's still resilient despite the fact that we have had a couple of years of massive interest rate increases.

But there is some slowdown in terms of the unemployment rate taking higher.

When I look at the totality of the labor market data and less people are quitting their jobs.

So that means less wage pressure and and the number we got earlier in this week where we saw 8 million job openings, which is down about 18% year over year.

Obviously, the peak was 14 million, 12 million a few years ago.

But in totality, I think it paints a picture where the market is cooling.

The labor market is softening on the margins, but the economy overall is still pretty resilient.

I mean, if you could speak that well, from an economist's perspective, I am amazed at how much you can speak on the Chief investment officer perspective as well.

Here too, give us the playbook.

Then if that's the read in on where the economy sits right now, is there any massive portfolio shift that you envision investors need to at least consider right now?

I don't think so.

And if you look at the action in the markets today, again, the story is very much the same.

The bond market is still not entirely comfortable and ensure that the inflation beast has been slain, which makes sense, the equity market, despite the fact that interest rates are higher, its trading high today, it was a surprise on the upside and it tells you that the fed may have to keep interest rates a little bit higher for longer than most people were expecting.

But the equity markets are higher.

The story, there is A I and corporate earnings as you were discussing with your previous guests.

So the data is going to become much Murkier, the outlook is going to become foggier as we go through the rest of the year.

What investors need to do is be very disciplined.

They need to be diversified across different asset classes.

Most importantly, they need to have their financial plans in place and stick to it.

You know, it's interesting.

What type of rewarding do you expect the market to give companies in this environment that once we start to get earnings that roll in for Q two that either start to beat or miss because in Q one, it seemed like they were getting rewarded less and they were getting punished more than historical averages, at least a five year historical average based on, I think some data from facts that it's a really interesting question and that happens when valuations are extended, right?

The good news has been priced in.

So the bar for surprising the market on the upset and getting rewarded for it is that much higher.

So we're, we're there.

We were there in Q one.

Obviously, the markets are at all time highs.

I think what's interesting in the earnings story is a couple of things.

First of all, we were in an earnings recession.

Now we've had three quarters of our earnings recovery.

That's because the economy is in decent shape, inflation is coming down, but it's not crashing, which adds to the pricing power of companies.

So that's a good thing.

The other is that if we do get to like $240 a share that the market is expecting this year and as we come to the end of next this year, and the market thinks that we can achieve that $270 a share, the market could trade higher.

The final thing say on earnings is we are seeing this rotation away from the mega cap earnings to the other company's earnings accelerating the mega cap earnings are expected to decelerate as the year goes through other 493 companies earnings are expected to accelerate.

That will create some volatility, some uncertainty.

But if we are in this environment where growth is 1.5% 2% inflation is sticky, but coming down slowly.

And the expectation that the fed is still inclined to cut interest rates is there, the market can slowly grind higher.

I'll tell you the question that everybody wants an answer to as they are going into their weekend, perhaps to fire up the grill or go for a swim is whether or not the S and P 500 is going to continue to see new all time highs, especially as we have today or at least on the intra day basis.

If we have a higher for longer tenner continue to remain in place after next week's Fed meeting, I think it can and it can because of the corporate earnings story, which is good.

You need this economy not to overheat.

And that's why I come back to those numbers, which is 1.5 to 2% growth, 3% like inflation, but slowly gliding to that 2 2.5% number.

The fed is still basically Dovish.

Even though next week's meeting, they will have to sound a little bit hawkish.

They may go from three rate cuts indicated to a two rate cuts, we will see what happens.

But basically, if they are still inclined to cut rates and they can do So before the economy really gets into trouble, then I think this equity market can go to new highs.

Now, what I will say is from an asset allocators perspective and as you know that we keep our clients invested in our asset allocations which make the most sense for them equities are going to be in a bit of a consolidation zone, at least that earnings can play catch up with earnings with valuations.

And the disinflation narrative comes back into the marketplace that is going to be a necessary condition.

Those two for equity markets to move higher.

Final thing, fixed income is again looking attractive with yields where they are.

So you construct a fixed income portfolio which has govs and corporate bonds high yields, some riskier aspects of the fixed income market.

You can get 5.5 to 6% yields and they are good diversifies at these levels because if you do have a situation where the economy weakens more than expected, the fed has to cut interest rates, then yields will come down and provide that ball against the equity risk that I talked about.

I haven't heard gos in a while.

So we're going to fire up the Yahoo Finance T shirt maker and throw that on one of those.

Neil.

Great to see you to see you as always, Neil Mukherjee who is the Tia a wealth management chief investment officer.

Joining us here in studio, we're switching gears, everyone one in seven people have unclaimed property and that's more than $20 billion worth of money and assets just sitting around according to the National Association of unclaimed property, administrators here to break down how you can find and claim.

What's yours?

We've got Yahoo Finance's very own.

Molly Moorhead, Molly.

You gotta take us into this one.

And, and how we find out what's unclaimed and if, if I'm owed something free money, right?

All day long.

So, uh there are a variety of accounts that can commonly end up in unclaimed property and it's things like unclaimed pensions from an old job or a 401k from an old job life insurance policy back pay again from previous jobs and then savings bonds.

You think about uh, things that started out on paper and are now electronic, any of that can get lost and, but it's still yours and you should claim it.

So, where should people look?

Yeah.

Well, I've got several websites to tell you the pension Benefit Guarantee Corporation, that's the federal agency that oversees private pensions.

Uh, lets you look for any pension in your name with your uh, name and last four digits of your social security number.

Uh Life insurance policies.

You can look if you're a veteran, look, uh, on the VA website and otherwise the National Association of Insurance Commissioners has a locator tool.

Labor department is where you go for unpaid wages.

Treasury direct.

That's where you find savings bonds.

And then the best one, probably the best place to start really is Missing money.com.

And this is gonna capture uh everything that, aside from what I just mentioned and it will find, um, unclaimed accounts uh in your state.

So you would put your, your name in and your state and it will find anything that's gone to unclaimed property in your state.

And I wanna underscore it's free to search all these websites.

Wait.

So, so how, how exactly does this all happen?

Uh It's weird to think that we could all just have money out there, right?

That we don't know about.

Um, but it, I, I think of it as like with life events.

So if you move to a different state, if you change jobs, um, anything like that where you might, um, move to a new account and forget about the old one.

So, uh it's, it's more common than you think.

And it's, it's very easy to search and it's worth it.

Ok.

So it seems like there's no harm in looking, but am I really likely to strike gold here?

How many people are like, you know, chiming off on social media saying, oh my gosh, you won't believe the windfall that just came my way.

Ok. Well, I can tell you from personal experience that I search on my state site, you know, from time to time for myself and my family members, my husband, my parents and I just found $25 in my mother's name from the state toll agency.

So, you know, these accounts that you can create to automatically pay highway tolls.

There, there was an overpayment and so there's $25 in her name.

I recently heard from a colleague that her husband had been uh gifted stock in an old employer, never claimed it $16,000.

So I would call that striking gold.

Our, our studio manager, Mike in here, his eyes just popped out of his head.

Ok, Molly.

Thanks so much.

Uh We got some Googling to do as after we end this segment.

Thanks so much.

Appreciate it.

Coming up.

Private credit has been attracting billions of dollars over the past few years.

But could the boom be nearing an end?

We'll discuss that next.

There's a relatively new asset class that's been attracting billions of dollars over the past few years, private credit.

It grew to over $2 trillion in assets and committed capital last year according to the International Monetary Fund known in your hood as the IMF but as of lately, some investors are becoming increasingly concerned that the boom for the asset class might be over to break down private credit and its risks.

We've got Yahoo Finance's very own Julie Hyman here.

Hey, Julie, hey, Brad, I've been seeing a lot of headlines about private credit recently and so that led me to dig into it a little bit and got some data from the IMF indeed, we have seen a big growth and big returns for investors from this asset class.

It isn't brand new, but really over the past several years, it's attracted a lot more attention and a lot more money.

So this from the IMF shows us the returns that we have seen in private assets versus public assets.

So private equity is here in purple and this doesn't show the absolute amount it shows gains private credit here in blue, it gained about 12% last year.

And then you've got the S and P 500 in yellow and MS C I the world uh stock index uh in red here.

So you've really seen the returns from some of these private markets really do well and attract a lot of money here.

Just a couple of examples that we've heard about as of late.

Um Just today, we learned that being capital would be buying Power School for $5.6 billion and private credit is part of that deal that is financing it.

There was just a Goldman Sachs report that Goldman Sachs had put together a $20 billion fund to invest in private credit as well.

All of this adding up to that $2.1 trillion that the IMF saw last year, which one would imagine is going to grow this year.

An Apollo executive at a at a conference recently said that this thing could even climb to as high as $20 trillion.

Now, it's still a small part of the overall market, especially in fixed income, but it is indeed growing.

So what the heck is private credit?

Anyway, it's kind of the credit counterpart to private equity.

So basically it's investment funds lending to corporate borrowers.

So what does that mean?

It means like you've got uh a black stone, a black rock and Apollo, the parent company of Yahoo raising funds from investors just like they would raise a private equity fund.

In the case of a private equity fund, they then use that to invest in companies, whether public or private buy pieces of those companies or buy companies outright.

In the case of private equity or private credit, they are lending that money out.

Some of it is direct lending to those companies, some of it is other types of financing instruments.

Some of it has to do with lending for real estate, for example, but it's just the lending side of the equation instead of the buying the piece of the company side of the equation.

There are lots of publicly traded credit instruments as well like corporate bonds, for example, this would be the private side of that.

So Brad, it's an interesting area and it's what a lot of folks are talking about.

There was just a conference called Super Return International that happened in Berlin and there was some talk there about whether sort of interest in this area might have peaked, but it does seem like it's still growing.

Yeah.

So as with anything, there are risks, what are the risks of this?

Yes, there have been some sort of flags to some of these risks of both discussions at these conferences.

The IMF in that same report flagged some of the potential risks valuations in infrequent, you know, in a publicly traded market, it's liquid, it is more transparent, you know what's happening and you mark your assets to market.

In other words, you periodically have to look at the overall public market and then value your assets accordingly.

That doesn't really happen as much in private credit or any private markets for that matter.

Uh Credit quality is not clear or is easily accessible.

This is kind of linked to that if I am direct lending to a company and that's a private transaction between me and the borrower, then that is not publicly available information.

And so it's unclear to analysts, for example, with the quality of that credit is how likely is that borrower to default, for example.

And then finally, it's hard to understand the systemic risks.

You know, we talk about systemic risks sort of dating really from the financial crisis.

That's when there was most of the discussion around systemic risks because risks from sub prime mortgages were indeed systemic.

We don't know the size of this seems to indicate that it's not systemic, but it is something that people who analyze financial institutions and the system are paying more attention to Julie.

Thanks so much.

All things private credit.

All right, appreciate the breakdown.

Coming up.

Everyone.

A mortgage rates continue to hover around that 7% mark.

We're speaking with an expert to help you with your home buying journey.

Next, the average rate on a 30 year fixed mortgage fell to 6.99% this week as it continues to hover around that 7% mark for what the latest numbers could mean for the housing market.

Let's bring in Yahoo Finance's own Rebecca Chen for a further break down here.

Hey, Rebecca.

Hey Brad.

So we have been seeing mortgage rate dropping or hovering around that 6% mark um for a while now and as you mentioned, this week rates fall below that to 6.99%.

Um And what is what this is doing to the housing market is is pretty clear.

There has been a sign that it is pressuring the housing market.

Simply put data is showing us that rate is still too high for many home buyers given today's housing prices.

Earlier this week, we saw another report on mortgage volume showing that purchasing application declined 4% and refinancing dropped 7%.

And this is quite interesting because home buyers are retreating at time.

That is the spring buying season.

And typically this is supposed to be the busiest buying season in the whole year.

But instead we are seeing that drop in purchasing volume.

And I think all of this has really to do with affordability.

We have seen from another report that just last month the average mortgage payment has increased by $60 for on average monthly mortgage.

And this is while $60 doesn't sound like a lot, you have to think that this is nationwide in average so many times people could be paying a lot more and sometimes a little bit less.

And annually another report is showing us that all four regions in the US has seen affordability decline over the last 12 months.

And you know, as we've been talking about it a lot on the show, people are really paying more out of pocket for that borrowing costs now that rates are hovering around 7% mark.

All right, Rebecca, thanks for teaming this up for us, for more, for much more on the housing market and what mortgage experts are telling potential buyers we're joined by Melissa Cohn, who is the William Raves mortgage regional vice president.

Great to have you here with us today.

Melissa first.

Thanks so much.

Yes, absolutely.

So you, you just heard the breakdown of where we're hovering right now?

Still around that 7% marker.

Does the buyer sentiment change at all at this level?

And if so where could we see some potential bids be thrown into the ring?

I mean, psychologically, I think people want to see rates well below 7%.

Now, real estate values have remained quite high even though they've dropped a little bit recently that, you know, as you said, the affordability factor becomes an issue.

I think that when interest rates drop below seven, if we get them down to six and three quarters, six and five eights, maybe 6.5 percent that we'll see, you know, renewed interest in the home buyers coming into the marketplace.

And the other thing that we have to take into consideration is when is the fed gonna start cutting rates?

It's the spring selling season.

Do people want to buy?

Now know that they're taking a higher interest rate but having the ability to refinance at some point, hopefully in the next 12 to 24 months in order to be able to reduce their monthly payment because it really is all about the monthly payment and not about the print rate.

Now, yesterday, we had Doug Duncan who is Freddie Mac's chief economist here.

I asked him his thoughts on buying now versus waiting for rates to decline.

I would love to hear your reaction to what he said on the other side.

Let's take a listen.

So if at today's price and the amount of money that you'd have to borrow, the payment fits in your budget that you have, then you buy today, you're a homeowner.

If you're speculating on whether interest rates are gonna fall, whether prices are gonna fall now on refinancing.

But then you've moved into the realm of being a speculator.

Some people can afford that.

A lot of entry level buyers can't really afford that.

And Melissa, I wanna get your reaction to that as well here, especially as there could be those who are tempted to speculate right now.

I think that really, it's all about, you know, affordability and whether or not you need to buy a home.

I mean, you know, the American dream is that everyone becomes a homeowner.

Um, and it is, I believe quite likely that when interest rates come down, that more buyers will come into the marketplace and real estate prices will move upward.

So to be able to buy today and if you can afford to buy today and become a homeowner, you know, obviously we all hope that interest rates will come down.

But I don't really mean that think that that makes you a speculator in the market for a lot of new home buyers out there.

What are the things that they need to remember?

Especially if going into a market like this and trying to figure out where they're going to get the best bang for their buck long term.

Well, I think that they have to look at themselves financially first.

Where do they stand in terms of their career in terms of income is their income stable.

You know, if they can afford to qualify for a mortgage today and they know that their income is growing.

You know, even if rates were not to go down, then as their income grows, that the affordability factor for them will improve.

Um, it's also a question of, you know, are you buying something just to get into it today that people shouldn't settle on something that's less expensive in order just to have a lower monthly payment, if you're buying something that you're not gonna see yourself in for a very long period of time, because there are transaction costs, you have to pay broker's commissions, their closing costs, transfer taxes that you have to pay.

So you have to make sure that the decision to buy today is a prudent one and one that will withstand, you know, the the next two or three years.

So to make sure that you haven't really to throw money out the window are, are some of those costs making new homes more appealing for new home buyers.

Well, I mean, if someone's purchasing a new home, there are builders who are actually give people discounts on their closing costs and discounts on rates, which is obviously an advantage.

Um you know, closing costs vary by state to date state.

There are certain states where closing costs are a lot less expensive and other states where it's a lot more expensive.

So you have to take not only the purchase price in the mortgage, but all of your closing costs into consideration.

Banks will want to see that you have enough money for your down payment, that you have enough money for closing costs and that you have some money in reserve.

Now, banks today have become prudent.

We're not, you know, banks are not throwing out no income verification loans and telling people, oh, you should just buy now and worry about it later.

You know, banks are really trying to make sure that every mortgage they make is one for the buyer that's going to be able to make their monthly payments.

Certainly Melissa Cohen, who is the William Raves Mortgage Regional Vice President?

Thanks so much for taking the time here with us today.

My pleasure coming up everyone.

If you're traveling this summer, we've got some safety tips for you to protect your money and have a stress free vacation.

You're watching Yahoo Finance planning on traveling this summer.

If you are, you're probably using some online resources for booking, whether that's for your plane or your hotel or even activities and guided tours.

We like those.

But are you doing all you can to keep yourself and your money safe?

When you book a recent survey from mcafee Labs shows that 34% of Americans say their trust in online booking has decreased mainly due to A I and deep faith.

So here to give us some tips on how to have a fun summer travel season while also staying vigilant.

We've got Abhishek Knick who is the mcafee Head of Threat Research.

Abhishek.

Great to have you here with us today.

Ok. What, what are some of the common pitfalls that you see as people are really just trying to get some relaxation and, and plan for summer travel but then are also not aware of some of the vulnerabilities.

Yeah, absolutely.

Like, uh, as people get up for travel this year, you know, we're seeing one in four Americans falling victim to scams and probably more than 25 losing $1000 or more.

So, what they, what we need to be careful about when we're booking is online is to be cautious about those too good to be true.

Uh offers, you know, which get pushed at you, either they come through text messaging or through emails.

Um The other thing that you might want to look for is impersonation website.

So when you're booking online, you know, you want to make sure that you validate the website that you're booking through, there's a lot of impersonation, impersonated websites, uh booking dot coms, you know, which are faked out photographs that might be incorrect or uh A I generated, for example.

So you have to be cautious, uh really be skeptical about what you are booking when you're booking, being cautious about what you're looking at.

Ok. And so with that in mind, how are we potentially doing on this kind of year over year have, have the threats increased and, and ultimately, where are people taking the correct safeguards.

So threats will follow the people, right?

I think people are getting ready for, for travel season and therefore you can see an evolution of threats in that space to assist the threats.

You have a lot of tools nowadays, like, you know, the malware guys, the bad guys are leveraging A I and and trying to, you know, utilize that to create automated text messages or even automated emails.

Uh In the more extreme cases, probably not related to travel.

Sometimes you're seeing deep fakes, uh things like that.

So those are essentially what you want to be looking out for.

Have a heightened level of skepticism.

Uh When you're traveling, you want to look at the, there are two pieces to it, right?

It's before you travel, when you do the booking, that's where you need to be cautious.

Which websites are you visiting?

Can you trust the uh can you trust the website uh and be cautious of phishing scams?

So don't give away your information to people that you don't trust.

What about?

And then, then you, you have the situation where you're traveling where, you know, you might have impersonators, somebody faking to be a travel agent, uh things like that or, you know, you scanning an incorrect QR code which leads you to an incorrect uh website which scams you essentially.

What about when you're midway and, and in your travels?

Do you think you're just bopping around enjoying vacation and you might actually be a target.

How do you kind of spot the signs when you're, uh, along the way?

Especially if you're in a foreign country and you might not be privy in entirety to the local language.

And that's exactly what the scammers are looking for when you're a little lost.

You know, they might pose a good, um, they might give you a, a incredible deal on travel or you might show up to a website and real or, or show up to a hotel and realize that well, the hotel doesn't exist or the airbnb doesn't exist.

So you might want to use, um you know, a lot has to do with being cautious, being skep, don't pay money upfront.

You know, try to see if you can uh use credit cards to make payments if you see things, people asking you for gift cards or asking you for Cryptocurrency payments.

I mean, those are huge red flags to start off with.

Uh So having that heightened level of skepticism, uh not believing, uh you know, who's interacting with, you don't take their word for.

It is extremely important and having the right tools in place as well.

You know, make sure you using trusted websites, trusted applications in your phone.

Um You know, and using VPN for example, when you're hopping on to free Wi Wi Fi is equally important because these are the different sort of uh vantage points that scammers are utilizing to take your money away.

Great reminders there, Abhishek Karnick, who is the mcafee head of Threat research.

Great to see you.

Thanks so much for taking the time.

Thanks Bob.

Appreciate it.

Hey, everyone.

That's it for wealth this week and for today, I'm Brad Smith.

Thank you so much for watching.

Guess what though?

We've got more Yahoo finance coming your way to round out what's been a record setting week for some of the major averages here.

As we've got a fresh new Intraday high, an all time high for the S and P 500.

Don't go anywhere.

Market domination with Julie Hyman and Josh Lipton.

They'll count you down to the market close.

That starts at 3 p.m. Eastern time.

You don't wanna miss it.