Frequently Asked Questions from Investors

LIZ ANN SONDERS: I'm Liz Ann Sonders.

KATHY JONES: And I'm Kathy Jones.

LIZ ANN SONDERS: And this is On Investing, an original podcast from Charles Schwab. Each week, we're going to bring you our analysis of what's happening in the markets and how it might affect your investments.

On this week's episode, we are going to answer some of the most frequent questions we get from investors. Kathy, you and I often always constantly speak at events where there are question-and-answer sessions, and it seems like a lot of the same questions come up time after time.

KATHY: That's true. And some of those questions are ones we get every single year, and some of them are unique to this point in time, since this is really kind of an unusual economic cycle. And I think most people who are asking these questions really are concerned about what's going on in the economy and how that can impact their investment plans.

LIZ ANN: Absolutely, and there are a lot of important questions out there that everybody wants answers to. And we also see them pretty much every single day in the comments and replies on our social media posts. But before we get into a list of some of these recent, let's call them hot topic questions, let's talk a little bit about how we spent the last week.

KATHY: So last week, Liz Ann, we were at IMPACT, the big conference that Schwab holds for advisors. This time it was in Philadelphia. A lot of great sessions there and a lot of great questions. So I'm sorry you missed quite a bit of it.

LIZ ANN: Well, I was, as you know, Kathy, I was actually in Philadelphia. I had gone down the day before IMPACT started for one of the advisors on Schwab's platform that always attends IMPACT. Interestingly, he runs a firm that was founded 60 years ago by his grandfather when we never even heard of the initials RIA or investment advisors. I guess it would have been termed some sort of mutual fund shop at the time, but his grandson took it over. So we had the 60th-anniversary celebration. I was not feeling well at all that day, but I had tested for COVID before going to the event, obviously, and I was negative. But then the next day, the day IMPACT started later in the day, I tested positive and was highly symptomatic.

So I spent IMPACT in a Philadelphia hotel room, but I was also very fortunate to have our colleague on my team, Kevin Gordon, who was attending IMPACT, and with very short notice, got up on stage, as you know, Kathy, for a couple of sessions and did just an absolutely extraordinary job. So I was very grateful for his involvement, his attendance there, and his poise and knowledge that he brought in my stead, but it's one of my favorite events. And I really miss seeing all of you in person. And hopefully that's a one-and-done in terms of missing IMPACT after 22 years of attending every one.

KATHY: Well, I will say a lot of people missed you. Kevin, you're right, Kevin did a fantastic job. Really impressive. But everyone was walking around going, "Where's Liz Ann? Where's Liz Ann? What happened to Liz Ann?" So you were missed. And then when I didn't want to say anything because I wanted you to reveal the information, not me, I just said you weren't feeling well, and they all wished you that you would get better quickly. So glad to have you up and about.

LIZ ANN: Yeah, thank you. I feel I'm pretty close to back to normal. So thank you.

KATHY: Yeah, I will say though, I'm sorry you missed it, because it's just some great conversations, great questions. Certainly on the fixed income side, a lot of concern, interest, questions. So, my session, I do an education session, was packed with people and a lot of great engagement. So obviously, people are … advisors are really asking a lot of questions right now about this environment and what they should do.

LIZ ANN: And I think that's one of the best things about some of these larger-forum conferences, particularly IMPACT, is not just what we impart when we're up on stage or the question-and-answer sessions that are a formal part of the events that we participate in, but those  in the conference center, just informal chats and conversations, I think those are often incredibly illuminating in terms of what's really on the mind of investors and in particular the advisors on our platform that advise so many individual investors.

KATHY: OK, so here are some of the most frequently asked questions we're hearing right now.

SPEAKER 3: What do you see the Federal Reserve doing over the next year?

KATHY: We think there's a very good probability the Fed is done raising interest rates in this cycle. And we can't rule out one more rate hike, but we kind of doubt it. Inflation is coming down. The core PCE, this is the benchmark measure that the Fed uses for inflation when they give their estimates, and it's down to 3.7% on a year-over-year basis. And it'll likely come in even lower by the end of the year.

The Fed was aiming for 3.7 at the end of this year. So we're there now. If it comes in a little bit lower, that would indicate they don't really have to do a lot more to achieve their inflation target on a timely basis. But there's also, keep in mind, the Fed is doing quantitative tightening. That is, they're allowing their balance sheet to decline by allowing bonds to mature and not replacing them. And that's a form of tightening. So just because they're not hiking rates doesn't mean they're not still tightening policy.

And then many other goals are being achieved. Bank lending standards are tightening. That means it's harder to get a loan, whether you're a business or an individual trying to buy a car or a house. And that's kind of the point of tighter monetary policy, making it harder to borrow. That slows the economy down. And we are seeing slower growth in some segments of the economy, especially manufacturing. Wage growth is slowing down. That's part of the goal of the Fed is to have wage growth closer to something in the 3 percent area than 4 percent plus, where we are, but it's well down from where it was and heading lower. And then regional surveys that the Fed uses when they survey the businesses in their district and individuals. They're showing a lot more concern now about slowing growth than about inflation. And this is a big shift over the last couple of months. I think that another motivation for the Fed to stop raising rates is they don't really want to trigger a problem in the financial system. There are some fragilities with smaller banks, exposure, that have exposure to commercial real estate, and really no reason to put more stress on the financing system in the country.

Another reason is growth in the rest of the world is slowing. Europe is really edging toward recession. China's growth rate has been disappointing. Further tightening by the Fed would just push up the dollar, which in and of itself could make it hard on countries that borrow in U.S. dollars, especially emerging-market countries. So just standing still with rates where they are for a while should achieve the Fed's goals, and I think that that's a motivation for them to just sort of stick with this "higher for longer" policy until they start to see inflation really get closer to that 2% target.

LIZ ANN: Hey, Kathy, can I jump in with a follow-on question that I often get when we're talking about the Fed in pause mode and what are the implications for the stock market associated with a Fed that has stopped raising interest rates? And what sort of drives me crazy is how many times I either see reference to or comments around, well, the typical action by the stock market or the average path the stock market takes once the Fed puts in its final hike. And I always think, boy, it brings up that old adage of "Analysis of an average can lead to average analysis." And you have to add to it the fact that we don't have a huge sample size of Fed rate-hiking cycles. There's only 14 of them, going back to the combination of the history of the S&P and the history of the Federal Reserve being in existence as we know it now, and that's 14 prior to the current one. And yes, you can look at averages. The average performance six months after the final rate hike is slightly down, like literally negative 0.4%. It jumps into mild positive territory 12 months later, 1.8%, but that does not suggest that you typically don't see much performance at all in the market because six months later of those 14 prior instances, the range is from as negative as minus 18% for the S&P—that was when the Fed stopped hiking in 1974—but you also have an experience of a 20% gain six months after the final hike. That was in 1989. If you go 12 months later, the range is even more dramatic. So again, the average 1.8, but the range goes from negative 29%, that was 1929 associated with the crash in that year, to up 32% in 1995. And there's also a huge span in terms of the number of days between the Fed's final rate hike and the subsequent first cut, going from as little as 59 days, again, back in 1929, because that was the crash of '29 era. But when the Fed stopped hiking in 1981, it was 874 days later that they made their initial cut in the next cycle. So again, beware of the words "typical" or "average" when it comes to data like this. And it also reinforces that there are lots of other things that impact what the market is going to do aside from just the Fed ending a hiking cycle.

KATHY: Yeah, and I would add, Liz Ann, it's a similar story with longer-term bonds. So we look at 10-year Treasury yields, and we look at how they performed going into the last rate hike and coming out of the last rate hike. And typically, what you see, and I say typically, in the last five or six cycles, long-term yields have peaked before the Fed makes their last rate hike and then come down over the next six to 12 months.

This time around, for the first time in modern history, going back to the '60s, if the last rate hike was the peak, we've seen 10-year yields actually go up after that. Very unusual cycle that we're in. And that goes to the point of you can't just look at the past to try to figure out what's going to happen in the future.

SPEAKER 4: Is a recession coming or not? And if it is, what should I do?

LIZ ANN: Well, I'll take that one to start. If I wanted to be a little bit snarky, but honest, yes, a recession is always coming, because that's how cycles end. The timing, of course, changes. I think this cycle has been particularly unique. We even spent some time on the pilot episode of this talking about the unique aspect to this cycle and all the cross currents that have come at investors and consumers making it a bit more difficult to figure out where we sit in the cycle.

And a lot of it has to do with the nature of the pandemic and how strength and weakness has sort of rolled through different segments of the economy at different times, which is why we've been using the term "rolling recession" to describe the backdrop where earlier at the very early stages of the pandemic when we were still in lockdown mode and all the stimulus kicked in, the surge that that caused in the economy was very much concentrated in the goods and goods-related side of the economy, like housing, housing-related, manufacturing, a lot of consumer-oriented goods that were beneficiaries of the lockdown phase and services were getting hammered at that time because we simply had no access to it.

But fast-forward to the more recent period of time, we've had what they often call the revenge-spending on services. Services is a larger employer in the United States. That's helped keep the labor market afloat. But we had actual hard landings, or recessions, if you want to use that term, for many of those segments that had the early burst when the stimulus had kicked in. So housing, housing-related, manufacturing, a lot of consumer-oriented goods, went into recession-type declines. You just had the offsetting strength on the services side. Now the hope, and I think still best-case scenario, absent an official NBER declared recession—they're the official arbiters—the best case scenario to me is less a traditional soft landing, because we've had hard landings in some of those aforementioned areas, but a continued roll through where if and when you start to see some weakness in services, and there's a few minor cracks that you could point to, but nothing significant, that you have that coming weakness, if it is coming, offset by either stability or improvement in areas that have already gone through their hard landings. Unfortunately, there was hope earlier for housing to represent one of those improving areas, but that was a fairly short-lived lift that we got, and now most of the data has rolled over again. And then as recently as this week, we got an update to ISM manufacturing, which is a key way to look at the health of the manufacturing industry, and that moved back down.

There was also, I think, some short-lived hope that maybe manufacturing was finding its legs. So I still think, more likely than not, a recession will be declared. What's important for investors is, number one, the stock market is a leading indicator. Inherently the data being used to judge recessions and when they start are, at best, coincident indicators if not lagging indicators. So the one piece of advice we often give investors, particularly if a question is phrased something like, "Why wouldn't I just stay out of the market until I know there's a recession and it's already over?" But the lags associated with not just the declaration that, OK, it's a recession, but the backdating nature of the start point. So NBER, what they do, their Business Cycle Dating Committee, is when they conclusively say, "OK, it's a recession," simultaneous with that announcement, they date the start, and they do that by month, not by day. And the average lag is seven months. Interestingly, at the back end of recessions, when you ultimately get the NBER coming out and saying, "OK, recession ended," the average lag in terms of where they date the end is 15 months. So keep that in mind. If you're waiting for the all-clear sign by the official arbiters of recessions that it's over, boy, you've probably missed a heck of a lot of movement in the market and in many cases, upside movement because the market is anticipatory in nature. And even during recessions tends to be really good at sniffing out the inflection point to a pickup in growth from inside a recession. So you certainly don't want to make all-or-nothing decisions based on the official timing of recessions. That is a pretty late part of the process.

KATHY: So, Liz Ann, I pick up on your comments about how, you know, every cycle is different. I often, having been an English literature major, think of recessions in terms of the famous opening lines to Anna Karenina, where it's "Happy families are all alike, but every unhappy family is unhappy in its own way." And I think of recessions as unhappy time periods, right, and each is different. So the economy normally grows. Its normal path is for expansion. When we hit a recession and it's not growing, it's because something really unhappy is going on, right? And each time it's a little bit different, has different causes, different outcomes. But for a bond investor, it's a little bit more straightforward, I think. Typically, what you see in a recession, even before it's declared, is a slowdown in growth. There's evidence of that, and that brings inflation down, and that's good for bonds. But it's good for high-quality bonds, not the riskier parts of the bond market. So, if you're concerned about a recession or you think a recession is on the horizon soon, it would behoove you probably to have some high-quality fixed income, meaning Treasuries, other investment-grade bonds like investment-grade municipal bonds or corporate bonds or some other government-backed securities. And maybe move out a little bit longer term because typically they respond the best to falling inflation and slowing growth and the likelihood of Fed rate cuts.

SPEAKER 5: What would cause the Federal Reserve to actually start cutting rates?

KATHY: Well, I think that's pretty straightforward. So, you know, A, if we saw signs that the economy is actually tipping into recession or really slowing down significantly, I think the Fed is really focused on the labor market. So, if the unemployment rate starts to really rise quickly, that could be a reason for them to shift to easing. I mean, they have a dual mandate of keeping inflation low and stable and of trying to keep employment at full employment.

So that trade-off, they've been focused only on inflation, but if that trade-off switches and we're seeing high unemployment, the Fed would probably start to cut rates. The other major reason would be stress in the financial system. You know, if there were some significant threat to financial stability, which could be rising defaults among large companies, a problem in commercial real estate that's threatening the banks, something that could threaten the financial system, then that's the kind of the thing that the Fed would react to by cutting rates.

SPEAKER 6: Your tactical guidance is often around factors and sectors, but why don't you talk about specific growth and value categories of stocks? How come you don't talk about growth versus value?

LIZ ANN: Well, interestingly, we do, we just get at it a little bit more indirectly, but for some really important reasons. I think there's a lot of simplicity around the discussion that often happens about growth versus value. I think growth and value can be seen in three different ways. The way I generally think about it is around the actual characteristics of growth and value, which goes to the whole discussion of factors.

But then I think that there's also preconceived notions around what are growth stocks and what are value stocks. Examples would be, I think most people would say, technology stocks are growth stocks and utility stocks are value stocks. And then, particularly important this year, is the fact that there are growth and value defined indexes. I call them capital G and V, in contrast to the lowercase g and v, growth and value, meaning the characteristics of growth and value. And the reason why I mentioned specifically this year is there are two index providers that create and maintain some of the most popular growth and value indexes, and it's S&P and Russell. In S&P's case, they have four indexes, two growth, two value. They don't do it by capitalization size. They do it sort of by purity. So S&P has an S&P Pure Growth, an S&P regular Growth, or just S&P Growth, S&P Pure Value, S&P Value.

And if you are a stock that lives in S&P Pure Growth, you don't also live in one of the value indexes. Whereas if you're in the regular growth index, you can also be in the regular value index because there's plenty of stocks that have characteristics of both. Russell has their four-index breakdown based on capitalization. So they've got Russell 1000 Growth, Russell 2000 Growth—that's large-cap growth, small-cap growth—and the same on the value side. Now the reason why this year is particularly important is the different rebalancing timings. Every year, both index providers rebalance those growth and value indexes so that it reflects the actual characteristics. And S&P does their rebalancing in December every year, Russell not until the end of June.

Why is this important? Well, on December 18th of 2022, the day before S&P did its rebalancing, their Pure Growth index had all eight of the mega-cap eight. Those are the largest eight stocks in the market. And technology, as a sector representing some of them, was 37% of that Pure Growth index. On December 19th, the day of the rebalancing, only one of those mega-cap eight was still in the Pure Growth index. The other seven stocks moved to a combination of regular Growth and regular Value S&P indexes. And as a result, the technology weighting within Pure Growth went from 37% to 13%. Even today, the spread is dramatic. And I'll get to that in a second.

So you might wonder, OK, well, if tech was no longer the largest weight, what became the largest weight? Guess what it was—energy. Because at the time S&P did its rebalancing, that's where the growth characteristics were most pronounced. That was where the strongest earnings growth was in the period that they were analyzing. So energy became the number-one weighted sector. Healthcare was actually number two, and tech was number three.

Fast-forward to the end of June when Russell did their rebalancing. You had seen deterioration in the earnings profile for energy, and technology stayed as a very hefty weight in their growth indexes, both large and to a lesser degree small. But as I mentioned, the differential this year has been unbelievably stark. You've got the Russell 1000 Growth index with 43% technology right now, this is as of the end of October, and only 14% technology in S&P Pure Growth. So many people look at those indexes and think, oh, they probably generally look the same. They're … S&P by its nature is large cap, so large-cap growth, large-cap growth, they look the same. Well, 43% tech versus 14. Russell 1000 Growth has 1% energy. The S&P Pure Growth has 29% energy. As a result of that, year-to-date through the end of October, Russell 1000 Growth is up more than 22%. The S&P Pure Growth index is down 3.5%.

So the real moral of that part of the story is, you better understand what you're buying. And where we get at growth and value is when we talk about factors. There are going to be times where the factors we are emphasizing right now, high-interest coverage. That has more of a sort of a value bias in terms of a characteristic. There are going to be times where we emphasize, like now, profitability and positive earnings revisions. That's more of a growth factor. So we just get at it a little bit different a way. We come at it from the perspective of characteristics. The last thing I'll say is it's not all that hard to categorize stocks into growth indexes.

It's based on their earnings growth. But what's interesting is if you don't meet the parameters, you're automatically put in the value basket. But it doesn't necessarily mean that those are actually value stocks. At a particular point in, I don't remember exactly when, in 2022, the utility sector had a sector P/E ratio that was higher than the S&P to a degree never before seen.

So that's really expensive stocks. Now utilities live in the value indexes, but there was an example of … they didn't really offer a lot of value. They just happened to be housed there because they're not growth stocks.

SPEAKER 7: If the yield curve is inverted, why should someone consider buying intermediate or long-term bonds?

KATHY: Well, yeah, this is a question we get a lot because, you know, intuitively, well, if short-term rates are higher than intermediate or long-term rates, then why should I buy anything beyond short-term, right? So currently, and what I mean by short-term and long-term is usually up to about, you know, two years is very short-term. As you move out to five-year maturities, five to seven years, five to 10 years, you get into intermediate, and long-term is beyond 10 years in maturity. So just to define those ranges. So first reason you might consider it is these are good yields. I mean, we haven't seen yields in this vicinity for about 15 years. 

It's especially true for people in retirement or going into retirement who are looking to build in that income component. And you're getting that in high-quality bonds, whether it's in Treasuries, roughly 5%-ish or so. You go into investment-grade corporate bonds, close to 6% and above. And municipal bonds on an after-tax basis is also very attractive. So we want to take the opportunity, I think, for many investors, to lock in some of these yields for the future.

The second is there's reinvestment risk. If you stay in cash or very short-term maturities, and rates do start to fall, you're going to be rolling over those maturities into lower rates. So, with the Fed tightening, it's likely that interest rates will fall in the future. Timing the market is really hard to do. I know there's a temptation to wait until you believe rates have peaked and then start to invest. But just like the stock market, it's really hard to time the market. The market tends to try to discount the future. So you're implicitly, if you're sitting very short-term right now, you're implicitly saying you can time the market. I think the third reason and the last reason I'll cite is just the risk-reward from here is much better now that yields are higher if you move out into intermediate-term or long-term bonds. So if you're worried about prices moving down as yields move up, note that it takes a lot more of an increase in interest rates to reduce your total return when you're getting a coupon of 5% than when coupons were 1% or lower. In other words, total return you get from a bond is the income stream plus or minus the price change. Well, right now, what you're getting is a lot more in the way of the income stream. That typically is the biggest component of your total return. And with that income stream being higher than it has been for the last decade or so, the chances of actually having a negative return are much lower. So it's skewed to the upside. That's not to say to run out and buy all 30-year bonds, but we do think having some bonds with maturities in that five- to 10-year area can make a lot of sense for investors.

SPEAKER 8: What are your latest thoughts on the economic implications of high government debt?

LIZ ANN: Yeah, so in general, we've written and spoken about this a lot over the years. If you take a really long-term look, and not just United States-specific, but much of the developed world, a high-and-rising burden of debt tends to correspond with lower economic growth rates, and the various components tend to move along with that. Now there are exceptions there, but that's one longer-term implication. More specific to what we're dealing with here, of course, is that we now have a debt burden just at the federal government level of about $33 trillion. There's more than 100% of U.S. GDP, and no sense that that's going to start falling because of higher deficits. And now with interest rates having done what they've done, both on the short end courtesy of the Fed and then more recently what's happened in the longer-term Treasury yield area, the cost of servicing that debt has gone up quite significantly. Now, we have lots of experiences over the years and decades and centuries with debt crises that have erupted, certainly recently in 2008 with the mortgage bust, and we've had crises on the consumer side of things, on the commercial side of things, on the corporate side of things.

But here is a situation where more acutely we're dealing with excess borrowing that has been undertaken by the actual U.S. government. And it's hard to judge, is there some sort of tipping point? We can look back in history, and when the interest burden and the cost of servicing debt has jumped to about 14% of tax revenues. That historically has been a point where some combination of the conversation being more frequent and the groans louder, versions of austerity kicking in, constituents caring more about it and maybe at least attempting to demand answers from politicians.

So we may be at one of those critical points because we did just hit that 14% level. So I do think it's going to be a larger part of the conversation. And then finally, the other issue of course, is that when you have high deficits and a high rise in burden of debt, you've got the necessity of the Treasury issuing more debt. And why it's particularly important to think about that now is, because we have a Federal Reserve that's gone from being in quantitative-easing mode and being a huge, the number one buyer of Treasuries, while they were doing quantitative easing, and they were a price-insensitive buyer.

But now that they are doing quantitative tightening, they are shrinking the balance sheet in terms of Treasuries to the tune of $60 billion a month. So we have lost that powerful, price-insensitive buyer in the name of the Fed.

SPEAKER 9: There is a lot of concern that increasing deficits means the Treasury will have to issue a lot more bonds. Who's going to buy all those bonds?

KATHY: Well, as Liz Ann mentioned, the increasing size of the Treasury auctions has really captured a lot of attention recently because of the rising deficit. But there are buyers. So we haven't had any failed auctions. We haven't had any auctions where the Treasury put some bonds out there, and nobody showed up. So it's more a question of at what yield will the market clear the debt.

And so, as Liz Ann mentioned, with the Fed stepping back from its bond-buying program under quantitative easing, that gap has to be filled, the amount that the Fed was buying. We haven't had a significant problem attracting buyers, though. Despite some of the headline reports to the contrary, foreign buying has been pretty steady. So foreign holdings for reserve purposes or for other purposes has pretty much run at a steady level.

But the real shift that we're seeing is in households. So household, individual investors, mutual funds, because individual investors often buy Treasuries through mutual funds, they have stepped in to fill the gap. And that signals to me, at least for the time being, that yields in the 5% region for Treasuries are high enough to attract individuals and mutual funds. So, you know, evidence suggests that we're finding buyers. There always will be some buyer. It's a question about what yield. Right now, it looks like 5%-ish is a pretty good yield for filling that gap.

LIZ ANN: So now let's focus on where things seem to be headed for next week. Kathy, what's on your radar for the coming week?

KATHY: Well, usually we get a little bit of a break from the big numbers in the second week of the month. So I'm looking forward to actually having less news. But we will likely get a stream of people from the Fed speaking now that the meeting is over and the quiet period has ended. So that's going to be interesting. It's where they reiterate the message that they're trying to send. And then in addition, I think, Liz Ann, retail sales, usually important. And this time around, because consumer spending has been pretty healthy, that's probably going to be something that affects the market.

And so that's where we are this Friday. What about you, Liz Ann? This has been a big week for economic news. What are you going to be watching for next week?

LIZ ANN: Well, obviously, many of the same things you are, Kathy. In addition, some of the data coming out is around consumer credit. I think these days, that's important to get a broader sense of the health of the consumer. I think mortgage applications are coming out. Obviously, that is a gauge of the impact of higher yields on the housing market. We've got wholesale sales and inventories, and that's typically a component that's part of the calculus of the NBER in recessions. I think increasingly weekly unemployment claims are important for obvious reasons, but they're a leading labor-market indicator. And then we get the University of Michigan data, which includes consumer sentiment, it includes inflation expectations. So that typically has a lot of nuggets in it. And then we'll also get the monthly budget statement, which I think many times no one pays much attention to that, but probably a report that maybe is going to garner a bit more attention than it has in the past.

So that's what the two of us are going to be looking out for next week.

So as always, thanks for listening, and be sure to follow us for free in your favorite podcast app. And if you've enjoyed this episode, tell a friend about the show. And if you want to keep up with the charts and data that we post in real time, the best way to do that is follow us both on Twitter (X) or LinkedIn. And for me, my handle is @LizAnnSonders. There's no E at the end of Ann, and Sonders is S-O-N-D-E-R-S both on Twitter and LinkedIn, and in case of Twitter or X make sure you're following the real me because I've had a rash of imposters recently.

KATHY: And I'm Kathy Jones—that's @KathyJones on X, Kathy with a K, and also on LinkedIn. On next week's show, we'll be joined by Mike Townsend, host of Schwab's WashingtonWise podcast.

MIKE TOWNSEND: Hi, I'm Mike Townsend, Schwab's managing director of legislative and regulatory affairs and host of the WashingtonWise podcast. Next week I'll be joining Kathy and Liz Ann to discuss what's going on in Washington. We'll talk about the likelihood of a government shutdown, what's happening with the House of Representatives, and much more.

In the meantime, you can listen to the latest episodes of WashingtonWise at Schwab.com/WashingtonWise or wherever you get your podcasts.

KATHY: For important disclosures, see the show notes or visit Schwab.com/OnInvesting, where you can also find the transcript.