Free-cash-flow yield is the surplus cash after expenses and investments divided by the price of the security. Free-cashflow yield has been used for a long time by active hedge funds. Now it has become part of the indexing landscape, competing for assets with other quantitative approaches. It has historically outperformed in markets that favored value stocks and shown resilience in growth markets. My guest today will explain why, in today's intangible asset-driven economy, traditional metrics like price to earnings and price to book face challenges, making free cash flow a more relevant valuation metric. We will discuss how advisors should think about free cash flow and the steps VictoryShares & Solutions has taken to enhance traditional approaches.
All investments involve some degree of risk.
Among his many contributions, Munger was a prolific armchair philosopher, whose speeches and interviews included hundreds — maybe thousands — of nuggets about how to invest and live well.
It’s the latest critique of the passive-investing boom: Fresh academic research claims that the relentless flood of index-chasing cash on Wall Street is distorting stock prices and causing extreme market moves.
I enjoy my work under normal circumstances, and I appreciate my clients. But this year faking happiness over material things isn’t in my DNA.
The Conference Board's Consumer Confidence Index® bounced back in November following three straight monthly declines. The index increased to 102.0 from October's downwardly revised reading of 99.1. This month's reading was better than expected, exceeding the 101.0 forecast.
At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan.
Our immense progress in improving society’s standard of living over the last several centuries was possible because of advances in the discovery and production of energy. To assume that will continue is a grave error.
The growth of the federal deficit in the post-COVID era, coupled with the political unwillingness to increase taxes, foretells higher-than-historical inflation rates, according to new research.
Here’s how to infuse your marketing with your personal touch.
US short-term inflation expectations climbed to a seven-month high in November and longer-run price views remained at levels not seen since 2011.
Now that we’re about to enter the Christmas shopping season, expect even more focus than usual on the consumer over the next several weeks.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
My guest, Sam Reid, is here to discuss the role and impact of structured credit within a retail investor portfolio. In an environment of rising rates and accumulating debt, this asset class offers investors a chance to alleviate risks and further enhance their portfolios.
Sam uses a process-driven approach to minimize the impact of rising rates, and his underwriting standards allow for enhancements to be built into securities. He focuses on short-duration investments.
October news on CPI inflation was all the doctor recommended and has markets spinning and repricing the Federal Reserve’s (Fed) potential path forward.
The latest inflation report, showing that price increases slowed in October, suggests that the US just might get the “immaculate disinflation” that everyone is hoping for: Inflation will fall to its pre-pandemic levels and remain there, and the US will avoid a recession. Allow me to make the pessimist’s case that we are not out of the woods yet.
What if everything you’ve been told about cultivating client assets from one generation to the next is wrong and unhelpful? Yes, the ”great wealth transfer” is a massive opportunity for financial advisors and wealth managers, but Meg Carpenter believes the advisory profession is looking at the opportunity through the wrong lens. In this conversation, we will focus on why the next generation of clients nearly always leaves their parents’ advisor, and how you can rethink your marketing efforts to attract the right clients across generations.
What are some of the more unique gifts or events advisors are doing for clients?
I show how the best way to utilize bonds in retirement is not to rebalance between stocks and bonds in retirement, but rather to draw down on the bond side of the portfolio first and let the portfolio drift towards a greater equity allocation.
The Age of AI (And Our Human Future), by Henry Kissinger, Eric Schmidt, and Daniel Huttenlocher, is keenly relevant.
Let’s examine what the bond market is telling us about inflation and a solution that will pay you and your clients to insure for the possibility of continued high, long-term inflation.
The Conference Board Leading Economic Index (LEI) fell for a 19th consecutive month in October as the LEI resumed signaling a recession in the near term. The index dropped 0.8% from last month to 103.9, the index's lowest reading since May 2020.
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
Recent legislative changes will impact the student financial aid process and could create stress and confusion. Dr. Peter Mazareas, author, college financing expert and Co-Founder of Invite Education, shares some need-to-know information for parents, students, and financial advisors.
For the past decade, South Florida’s politicians and development officials have fanned dreams — which long felt like delusions — of the region reinventing itself as some sort of “Wall Street South.”
Confounding market and economic signals persist as the year’s end draws near. In a year punctuated by heightened uncertainty as investors attempted to navigate a confluence of risk factors, stock and bond correlations proved a significant challenge to traditional portfolios.
We understand that many economists/analysts/market participants are already discounting inflation as a serious problem for the U.S. economy. Even if this seems correct on the surface, the problem is very different for those who suffer the most from higher prices – middle- and lower-income individuals.
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
Are you curious about what a transition in the digital age truly entails? My guest, Lizzie Warner, and I will step inside the world of broker-dealer/RIA transitions and unveil the timeline and milestones of these transformations. We want this to be your gateway to making your move smoother and more accessible than ever before.
Lizzie Warner, vice president of transition and strategic acquisitions at Cambridge, shares her insights and stories from guiding countless financial advisors through this pivotal change.
Lizzie will also introduce Cambridge's complimentary resource, “Asking the Right Questions of Your Next Transition Team.”
The Chicago Fed National Activity Index (CFNAI) is arguably one of the most important and overlooked economic indicators.
The labor market is undoubtedly deteriorating and sending signals that have been historically valuable warnings that a recession is coming.
Can a single self-published paper really refute decades of work by three famous economists? If the paper is the modestly titled “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” then the answer — with qualifications — is yes.
How do I instill strong management skills in my next-level management team?
The price of gold just had its best October in nearly half a century, defying tough resistance from surging Treasury yields and a strong U.S. dollar. The yellow metal rallied an incredible 7.3% last month to close at $1,983 an ounce, its strongest October since 1978, when it jumped 11.7%.
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
This article provides a brief guide to the AI technologies available (it’s not just ChatGPT), their applications in wealth management, and how your firm can define specific business outcomes to achieve.
A China ‘Recovery’: How important is the loss of confidence within China itself?
On October 24, 2022, precisely a year ago, we published an article by Allan Roth in Advisor Perspectives, The 4% Rule Just Became a Whole Lot Easier. The idea for that article came from a conversation that Allan and I had. I noted that real rates, as expressed by TIPS, were about 1.75%. I thought that it would be possible to lock in the proverbial 4% safe withdrawal rate. Allan did the analysis and found that, indeed, a 4.36% safe withdrawal rate was possible. That article received widespread attention throughout the financial media. Perhaps it even had a role in the introduction of BlackRock’s new suite of defined-maturity TIPS ETFs.
Higher interest rates and inflation are likely to usher in a decade of policy restraint, limited liquidity and macro volatility, pressuring equities and motivating investors to reconsider tactical asset allocation and embrace real assets.
Interest on our federal debt is 2% and heading towards 5%, which will crowd out other expenditures and escalate deficit spending.
Research on tax-efficient retirement distribution strategies aims to sequence withdrawals from taxable, tax-deferred, and tax-exempt accounts to maximize after-tax spending. That can be either in terms of meeting an after-tax spending goal for as long as possible or preserving the most after-tax legacy after meeting spending needs over a specified timeframe.
Private equity (PE) has become a staple of institutional portfolios, but its performance has often been disappointing. New research shows that the levels of specialization and portfolio diversification should be important considerations when selecting a manager to implement a PE strategy.
CNBC Journalist Laments How the Fed Now Essentially Controls the Market.
We’ve always intended for the unique collaboration between AllianceBernstein (AB) and Columbia University to serve the broader asset-management industry. Asset owners and managers alike are eager to explore the complex issues of climate change and its potential effect on investments and investment decision-making.
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
Credit risk will replace interest-rate risk as the market’s “big fear” next year, according to Mohamed El-Erian.
It’s the buzz word on Wall Street and in the hallways of the Federal Reserve and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy.
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
Earlier this month, I attended Bob Veres’ Insiders Forum conference in San Antonio. As it is every year, the highlight of the conference is Bob’s presentation of the Insiders Forum leadership award. This year’s recipient was Angie Herbers, my guest today. I cannot overstate the significance of this award. Virtually every other award in the advisor profession is part of a pay-for-play scheme, where the award is made with the expectation that the recipient will pay to attend some expensive dinner or to get the right to use the award publicly. But this award is purely merit-based and recognizes the contributions that individuals have made to advance the advisor profession.
Those contributions were evident in the presentation Angie made about her most recent research after receiving her award, and she is here today to share some of those findings.
Our monthly workforce analysis has been updated to include the latest employment report for October. The unemployment rate rose to 3.9% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 150K.
A recent study found significant differences in how our brains process in-person meetings and Zoom calls versus in-person meetings.
I’ll share some important insights gleaned from many decades of working in the advisory profession and being both an insider and an outsider.
Let's take a close look at October's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.5% of total employed workers are full-time (35+ hours) and 16.5% of total employed workers are part-time (<35 hours).
After the October/November meeting, it seems that Fed officials have an added objective, as Fed Chair Jerome Powell said during the press conference that they needed to see interest rates “persistently high.”
Zacks Investment Management has been managing money for more than 30 years. It is a subsidiary of Zacks Investment Research, which is one of the largest independent research providers in the United States. In 2021, Mitch Zacks, its CEO, decided it was time to bring the research-driven approach to investing that the firm has become known for to the exchange-traded product market. The firm's first active ETF was launched in the summer of 2021. Since then, it has been focused on being committed to expanding its footprint in the ETF product space while bringing continued risk-adjusted returns to clients.
Household debt rose by $228 billion (1.34%) to $17.29 trillion in Q3 2023. The increase in debt this month was largely driven by mortgage, credit card, and student loan balances. Mortgage balances increased to $12.14 trillion, credit card balances to $1.08 trillion, and student loan balances to $1.6 trillion.
Given the response from China’s highest leadership levels, a fast recovery is preferable. The second largest economy will have to do this without a heavy influx of financial aid from the government. It would have to rely on measured steps in policy adjustments.
Sam Bankman-Fried’s widely anticipated guilty verdict has been rendered. But Michael Lewis’ book raises many questions, including the existence and extent of an actual crime.
Many commentators are struck by the disconnect between the US economy’s impressive performance of late and the dismal popular view of the very same economy.
While often difficult, investing rules can help us maintain our focus and investment discipline in volatile or uncertain markets.
A prospect that might have seemed unthinkable just a couple short weeks ago is coming into view for bond traders: The potential for US Treasuries to post an annual gain for the first time since 2020.
I remember the exact moment in 2007 when I knew the financial industry was headed for a reckoning. There was no data point that tipped me off, no great insight about the housing market.
The Fed kept rates unchanged at today’s meeting, but whether they are done with rate hikes or simply at a pause is yet to be determined.
Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.
The US Federal Reserve thinks it can take a break. As Fed officials see it, they need only sit back and wait while the monetary tightening they’ve already done gradually takes hold, slowing the economy and pushing inflation back down to the central bank’s 2% target.
Recently, I was asked by a client what my return expectations are for the next three years.
The typical American is a lot richer now than they were just before the pandemic — and this improvement is at least partially due to government support for families and businesses in 2020 and 2021.
Is there a graceful way to explain to clients I’m not the person making these decisions, and that I understand the impact, without betraying my firm and aligning fully with clients?
To have a shot at taming inflation, the Federal Reserve is intent on tightening financial conditions across the economy. But they haven’t made much of a dent in corporate America yet.
Forecasting economic outcomes is a challenging exercise, even under steady conditions. Geopolitical events have only added to the complexity facing economies worldwide.
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Calamos Investments and Aksia joined forces this year to launch the Calamos Aksia Alternative Credit and Income Fund (CAPIX), an interval fund designed to provide advisors and their clients access to private debt investments – most of them historically only accessible to institutions – with the liquidity investors demand. The accessibility concept was nothing new for Calamos – it created one of the first retail liquid alternatives funds three decades ago – and for private credit, it engaged a partner, Aksia, that has been managing private credit for institutions almost as long. (For its part, this is Aksia’s first foray into advisors and retail clients.). Calamos’s Bob Behan is here to talk about the partnership and the current opportunity set in private credit.
While getting your loans wiped out in one fell swoop can seem like a lifesaver, it may come with some negative financial implications. I cover what you need to know.
If you believe that an easy solution to improve lower-class standards of living is to raise the minimum wage, or you are curious about what university presidents spend their time on, Angus Deaton’s new book provide insightful answers to those and many more questions that, taken together, challenge the relevance of modern economics and the capitalism it supports.
Many entry-level jobs, especially those in education and social services, do not pay well enough for recent graduates to balance their student loan payments with rent and other expenses. This is where income-based repayment plans for student loans come in.
The ancient Greeks had a word κάθαρσις, which in English we now spell as “catharsis,” although it’s pronounced basically the same. It originally referred to purifying religious ceremonies, medical treatments, and so on.
Despite progress on bringing down inflation from mid-2022 highs, data from online job postings suggests that wage pressures may be reaccelerating. Beneath the surface, growing divergence in wage gains across occupation categories may be adding a layer of complexity to the outlook for labor markets.
The world is becoming an increasingly diverse place, especially the societies that we live in and we invest in. It’s not just about social equity that companies need to focus on diversity, equity, and inclusion; it’s really about business fundamentals.
Since taking a big leap upward in the 1940s and 1950s, the homeownership rate in the US has been remarkably steady since the 1960s, with close to two-thirds of households owning their homes.
Higher for longer. The Federal Reserve will likely maintain higher interest rates and remain open to another rate hike. Borrowing costs for households, businesses and governments have risen with soaring rates.
While the article focuses mainly on the rise in bond yields, it applies to several current market events.
The strength in consumer demand has been one of the defining characteristics of a very resilient U.S. economy and September’s retail and food services sales report confirmed that the U.S. consumer is alive and well.
Here are my seven keys to emerging as a leader.
With interest rates at near 20-year highs, guaranteed lifetime income locks in those rates for the rest of one’s life, creating better retirement outcomes.
As interest rates have risen dramatically over the past year, income-oriented funds have become more attractive. With the income finally back in fixed income, advisors are searching for new opportunities to generate yield while mitigating risk in their bond investments. That’s why Madison Investments, an independently owned investment firm managing $22.9 billion in assets, recently launched its first suite of four income-oriented ETFs. The firm provides a range of investment strategies across mutual funds, managed accounts and customized investment portfolios. It added ETFs to its offerings in August. Two of the funds in its suite – the Madison Aggregate Bond ETF (NYSE: MAGG) and the Madison Short Term Strategic Income ETF (NYSE: MSTI) – seek to capitalize on the growing demand for dynamic, risk-managed fixed income strategies. My guest today will discuss how advisors can use these actively managed ETFs to get the most value out of their fixed income allocation.
Should you opt for transactional tactics that promise immediate results, or invest in transformational strategies that build a lasting business? Should you focus on short-term success or long-term sustained strategy?
With next week’s 3Q GDP report shaping up to be a blockbuster number (the Atlanta Fed GDPNow is tracking a +5.4% growth rate), it is worthwhile to reiterate our thoughts on the economy and how we expect growth to unfold over the next year.
Homeowners, drivers and other individuals in the marketplace for insurance, have a host of factors to consider to make sure they are appropriately covered in the event of a death, accident, or other untimely event, advisors shared in interviews with VettaFi.
For the first time since the Federal Reserve started raising interest rates, every part of the housing market is now poised to worsen.
The long history of business cycles illustrates that rising inflation precedes recessions. Inflation accelerations don’t just happen, they are caused.
The U.S. economy’s remarkable resilience is complicating the lives of investors and the Federal Reserve. Despite war-disrupted commodity markets and one of the most aggressive monetary tightening phases in modern history, economic activity has remained strong.
529/College Planning
The Advantages of Free-Cash Flow in Portfolio Construction
Free-cash-flow yield is the surplus cash after expenses and investments divided by the price of the security. Free-cashflow yield has been used for a long time by active hedge funds. Now it has become part of the indexing landscape, competing for assets with other quantitative approaches. It has historically outperformed in markets that favored value stocks and shown resilience in growth markets. My guest today will explain why, in today's intangible asset-driven economy, traditional metrics like price to earnings and price to book face challenges, making free cash flow a more relevant valuation metric. We will discuss how advisors should think about free cash flow and the steps VictoryShares & Solutions has taken to enhance traditional approaches.
All investments involve some degree of risk.
The Charlie Munger Principles to Invest and Live By
Among his many contributions, Munger was a prolific armchair philosopher, whose speeches and interviews included hundreds — maybe thousands — of nuggets about how to invest and live well.
The $7 Trillion ETF Boom Gets Blamed Again for Dumb Stock Moves
It’s the latest critique of the passive-investing boom: Fresh academic research claims that the relentless flood of index-chasing cash on Wall Street is distorting stock prices and causing extreme market moves.
There’s Too Much Trouble in the World to Have a Holiday Party
I enjoy my work under normal circumstances, and I appreciate my clients. But this year faking happiness over material things isn’t in my DNA.
Consumer Confidence Bounces Back After Three Straight Monthly Declines
The Conference Board's Consumer Confidence Index® bounced back in November following three straight monthly declines. The index increased to 102.0 from October's downwardly revised reading of 99.1. This month's reading was better than expected, exceeding the 101.0 forecast.
China Is a Rich Country. It Can No Longer Cry Poor on Climate
At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan.
The Physical Limits to Society’s Progress
Our immense progress in improving society’s standard of living over the last several centuries was possible because of advances in the discovery and production of energy. To assume that will continue is a grave error.
Fiscal Deficits Drive Higher Inflation
The growth of the federal deficit in the post-COVID era, coupled with the political unwillingness to increase taxes, foretells higher-than-historical inflation rates, according to new research.
Making Authentic Connections
Here’s how to infuse your marketing with your personal touch.
US Consumer Year-Ahead Inflation Expectations Rise Further
US short-term inflation expectations climbed to a seven-month high in November and longer-run price views remained at levels not seen since 2011.
Consumer Spending Set for Slower Growth
Now that we’re about to enter the Christmas shopping season, expect even more focus than usual on the consumer over the next several weeks.
Recurring Fiscal Deficits and the Consequences
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
Risks and Opportunities in Structured Credit
My guest, Sam Reid, is here to discuss the role and impact of structured credit within a retail investor portfolio. In an environment of rising rates and accumulating debt, this asset class offers investors a chance to alleviate risks and further enhance their portfolios.
Sam uses a process-driven approach to minimize the impact of rising rates, and his underwriting standards allow for enhancements to be built into securities. He focuses on short-duration investments.
October CPI Inflation: Just What the Dr. Recommended
October news on CPI inflation was all the doctor recommended and has markets spinning and repricing the Federal Reserve’s (Fed) potential path forward.
Inflation Could Come Back When You Least Expect It
The latest inflation report, showing that price increases slowed in October, suggests that the US just might get the “immaculate disinflation” that everyone is hoping for: Inflation will fall to its pre-pandemic levels and remain there, and the US will avoid a recession. Allow me to make the pessimist’s case that we are not out of the woods yet.
What Advisors Get Wrong About the Great Wealth Transfer
What if everything you’ve been told about cultivating client assets from one generation to the next is wrong and unhelpful? Yes, the ”great wealth transfer” is a massive opportunity for financial advisors and wealth managers, but Meg Carpenter believes the advisory profession is looking at the opportunity through the wrong lens. In this conversation, we will focus on why the next generation of clients nearly always leaves their parents’ advisor, and how you can rethink your marketing efforts to attract the right clients across generations.
New and Creative Ideas for Holiday Gifts
What are some of the more unique gifts or events advisors are doing for clients?
How Rebalancing Thwarts Achieving Retirement Goals
I show how the best way to utilize bonds in retirement is not to rebalance between stocks and bonds in retirement, but rather to draw down on the bond side of the portfolio first and let the portfolio drift towards a greater equity allocation.
Henry Kissinger on the Promise and Threats of AI
The Age of AI (And Our Human Future), by Henry Kissinger, Eric Schmidt, and Daniel Huttenlocher, is keenly relevant.
Is the Bond Market Wrong About Inflation?
Let’s examine what the bond market is telling us about inflation and a solution that will pay you and your clients to insure for the possibility of continued high, long-term inflation.
CB Leading Economic Index: Recession Signal Resumes as Index Declines Further
The Conference Board Leading Economic Index (LEI) fell for a 19th consecutive month in October as the LEI resumed signaling a recession in the near term. The index dropped 0.8% from last month to 103.9, the index's lowest reading since May 2020.
Bonds’ Best Month Since March Faces ‘Sanity Check’ in Auction
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
The New FAFSA: What Every Advisor, Parent and Student Should Know
Recent legislative changes will impact the student financial aid process and could create stress and confusion. Dr. Peter Mazareas, author, college financing expert and Co-Founder of Invite Education, shares some need-to-know information for parents, students, and financial advisors.
Dear Miami, Taking Wall Street From NYC Won’t Be Easy
For the past decade, South Florida’s politicians and development officials have fanned dreams — which long felt like delusions — of the region reinventing itself as some sort of “Wall Street South.”
The Problem of Mixed Market Signals and Correlations
Confounding market and economic signals persist as the year’s end draws near. In a year punctuated by heightened uncertainty as investors attempted to navigate a confluence of risk factors, stock and bond correlations proved a significant challenge to traditional portfolios.
Inflation Is Decelerating... Its Effects on Consumers Are Not
We understand that many economists/analysts/market participants are already discounting inflation as a serious problem for the U.S. economy. Even if this seems correct on the surface, the problem is very different for those who suffer the most from higher prices – middle- and lower-income individuals.
U.S. Economic Outlook, November 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
The Insider's Guide to Transition
Are you curious about what a transition in the digital age truly entails? My guest, Lizzie Warner, and I will step inside the world of broker-dealer/RIA transitions and unveil the timeline and milestones of these transformations. We want this to be your gateway to making your move smoother and more accessible than ever before.
Lizzie Warner, vice president of transition and strategic acquisitions at Cambridge, shares her insights and stories from guiding countless financial advisors through this pivotal change.
Lizzie will also introduce Cambridge's complimentary resource, “Asking the Right Questions of Your Next Transition Team.”
CFNAI: The Most Important & Overlooked Economic Number
The Chicago Fed National Activity Index (CFNAI) is arguably one of the most important and overlooked economic indicators.
Does Rising Unemployment Signal a Recession?
The labor market is undoubtedly deteriorating and sending signals that have been historically valuable warnings that a recession is coming.
America’s Top 1% Don’t Make as Much as You Might Think
Can a single self-published paper really refute decades of work by three famous economists? If the paper is the modestly titled “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” then the answer — with qualifications — is yes.
How to Turn Your Team into Great Managers
How do I instill strong management skills in my next-level management team?
Japan’s New Gold Era: The Yen’s Decline Sparks Unprecedented Demand For Safe Havens
The price of gold just had its best October in nearly half a century, defying tough resistance from surging Treasury yields and a strong U.S. dollar. The yellow metal rallied an incredible 7.3% last month to close at $1,983 an ounce, its strongest October since 1978, when it jumped 11.7%.
Inside the Consumer Price Index: October 2023
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
Where Does AI Fit in Your Firm’s Future?
This article provides a brief guide to the AI technologies available (it’s not just ChatGPT), their applications in wealth management, and how your firm can define specific business outcomes to achieve.
Confidence
A China ‘Recovery’: How important is the loss of confidence within China itself?
BlackRock’s New Defined-Maturity TIPS ETFs
On October 24, 2022, precisely a year ago, we published an article by Allan Roth in Advisor Perspectives, The 4% Rule Just Became a Whole Lot Easier. The idea for that article came from a conversation that Allan and I had. I noted that real rates, as expressed by TIPS, were about 1.75%. I thought that it would be possible to lock in the proverbial 4% safe withdrawal rate. Allan did the analysis and found that, indeed, a 4.36% safe withdrawal rate was possible. That article received widespread attention throughout the financial media. Perhaps it even had a role in the introduction of BlackRock’s new suite of defined-maturity TIPS ETFs.
From Abundance to Austerity: Why the Next Decade Won’t Be Like the Last
Higher interest rates and inflation are likely to usher in a decade of policy restraint, limited liquidity and macro volatility, pressuring equities and motivating investors to reconsider tactical asset allocation and embrace real assets.
“Guns or Butter” Has Become “Guns and Butter”
Interest on our federal debt is 2% and heading towards 5%, which will crowd out other expenditures and escalate deficit spending.
Managing Taxes in Retirement using the Effective Marginal Tax Rate
Research on tax-efficient retirement distribution strategies aims to sequence withdrawals from taxable, tax-deferred, and tax-exempt accounts to maximize after-tax spending. That can be either in terms of meeting an after-tax spending goal for as long as possible or preserving the most after-tax legacy after meeting spending needs over a specified timeframe.
How to Select PE Investments
Private equity (PE) has become a staple of institutional portfolios, but its performance has often been disappointing. New research shows that the levels of specialization and portfolio diversification should be important considerations when selecting a manager to implement a PE strategy.
Fed Continues Tough Talk; Silver & Platinum Look Most Undervalued
CNBC Journalist Laments How the Fed Now Essentially Controls the Market.
Investing Lessons from Climate School, Class of 2023
We’ve always intended for the unique collaboration between AllianceBernstein (AB) and Columbia University to serve the broader asset-management industry. Asset owners and managers alike are eager to explore the complex issues of climate change and its potential effect on investments and investment decision-making.
Universities Shouldn’t Be Punished for Betting on Private Equity
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
El-Erian Says Credit Risk Will Replace Interest-Rate Risk as 2024’s ‘Big Fear’
Credit risk will replace interest-rate risk as the market’s “big fear” next year, according to Mohamed El-Erian.
‘Dark Matter’ Bond Metric Mesmerizes Wall Street and Washington
It’s the buzz word on Wall Street and in the hallways of the Federal Reserve and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy.
Baby Boomer Employment Across Time
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
Do Advisors Deliver What Consumers Want?
Earlier this month, I attended Bob Veres’ Insiders Forum conference in San Antonio. As it is every year, the highlight of the conference is Bob’s presentation of the Insiders Forum leadership award. This year’s recipient was Angie Herbers, my guest today. I cannot overstate the significance of this award. Virtually every other award in the advisor profession is part of a pay-for-play scheme, where the award is made with the expectation that the recipient will pay to attend some expensive dinner or to get the right to use the award publicly. But this award is purely merit-based and recognizes the contributions that individuals have made to advance the advisor profession.
Those contributions were evident in the presentation Angie made about her most recent research after receiving her award, and she is here today to share some of those findings.
U.S. Workforce Analysis: October 2023 Update
Our monthly workforce analysis has been updated to include the latest employment report for October. The unemployment rate rose to 3.9% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 150K.
How to Improve Zoom Engagement
A recent study found significant differences in how our brains process in-person meetings and Zoom calls versus in-person meetings.
A Birthday Reflection – Five Life Lessons
I’ll share some important insights gleaned from many decades of working in the advisory profession and being both an insider and an outsider.
A Closer Look at Full-time and Part-time Employment
Let's take a close look at October's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.5% of total employed workers are full-time (35+ hours) and 16.5% of total employed workers are part-time (<35 hours).
Add “Persistently High” to “Higher for Longer”
After the October/November meeting, it seems that Fed officials have an added objective, as Fed Chair Jerome Powell said during the press conference that they needed to see interest rates “persistently high.”
A New ETF Targets the SMID Space
Zacks Investment Management has been managing money for more than 30 years. It is a subsidiary of Zacks Investment Research, which is one of the largest independent research providers in the United States. In 2021, Mitch Zacks, its CEO, decided it was time to bring the research-driven approach to investing that the firm has become known for to the exchange-traded product market. The firm's first active ETF was launched in the summer of 2021. Since then, it has been focused on being committed to expanding its footprint in the ETF product space while bringing continued risk-adjusted returns to clients.
Household Debt Rises to $17.29 Trillion
Household debt rose by $228 billion (1.34%) to $17.29 trillion in Q3 2023. The increase in debt this month was largely driven by mortgage, credit card, and student loan balances. Mortgage balances increased to $12.14 trillion, credit card balances to $1.08 trillion, and student loan balances to $1.6 trillion.
Get in Early on China’s Economic Recovery With This ETF
Given the response from China’s highest leadership levels, a fast recovery is preferable. The second largest economy will have to do this without a heavy influx of financial aid from the government. It would have to rely on measured steps in policy adjustments.
Was Bankman-Fried Wrongly Convicted?
Sam Bankman-Fried’s widely anticipated guilty verdict has been rendered. But Michael Lewis’ book raises many questions, including the existence and extent of an actual crime.
Please Don’t Call Inflation Anxiety Delusional
Many commentators are struck by the disconnect between the US economy’s impressive performance of late and the dismal popular view of the very same economy.
Investing Rules To Navigate Volatile Markets
While often difficult, investing rules can help us maintain our focus and investment discipline in volatile or uncertain markets.
Bond Market Has Fighting Chance to Avoid Historic Losing Streak
A prospect that might have seemed unthinkable just a couple short weeks ago is coming into view for bond traders: The potential for US Treasuries to post an annual gain for the first time since 2020.
The Tech Gold Rush Is Over. Where’s the Next One?
I remember the exact moment in 2007 when I knew the financial industry was headed for a reckoning. There was no data point that tipped me off, no great insight about the housing market.
Pause...For Now
The Fed kept rates unchanged at today’s meeting, but whether they are done with rate hikes or simply at a pause is yet to be determined.
Sorry, Gen Z, But Economic Anxiety Isn’t Going Away
Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.
The Federal Reserve’s Pause Could Go Terribly Wrong
The US Federal Reserve thinks it can take a break. As Fed officials see it, they need only sit back and wait while the monetary tightening they’ve already done gradually takes hold, slowing the economy and pushing inflation back down to the central bank’s 2% target.
The Outlook for 2024-26
Recently, I was asked by a client what my return expectations are for the next three years.
A Strong Safety Net Helps the Whole US Economy
The typical American is a lot richer now than they were just before the pandemic — and this improvement is at least partially due to government support for families and businesses in 2020 and 2021.
How Do I Avoid Badmouthing My Company?
Is there a graceful way to explain to clients I’m not the person making these decisions, and that I understand the impact, without betraying my firm and aligning fully with clients?
Credit Strength Is Baffling Fed Watchers Ahead of Rate Decision
To have a shot at taming inflation, the Federal Reserve is intent on tightening financial conditions across the economy. But they haven’t made much of a dent in corporate America yet.
Global Economic Outlook: Expect the Unexpected
Forecasting economic outcomes is a challenging exercise, even under steady conditions. Geopolitical events have only added to the complexity facing economies worldwide.
Strong GDP Growth in Q3 Could Become a Threat to Monetary Policy
Chief Economist Eugenio J. Alemán discusses current economic conditions.
A Pure Play, Institutional Grade Private Credit Portfolio
Calamos Investments and Aksia joined forces this year to launch the Calamos Aksia Alternative Credit and Income Fund (CAPIX), an interval fund designed to provide advisors and their clients access to private debt investments – most of them historically only accessible to institutions – with the liquidity investors demand. The accessibility concept was nothing new for Calamos – it created one of the first retail liquid alternatives funds three decades ago – and for private credit, it engaged a partner, Aksia, that has been managing private credit for institutions almost as long. (For its part, this is Aksia’s first foray into advisors and retail clients.). Calamos’s Bob Behan is here to talk about the partnership and the current opportunity set in private credit.
How Student Loan Forgiveness Affects Your Finances
While getting your loans wiped out in one fell swoop can seem like a lifesaver, it may come with some negative financial implications. I cover what you need to know.
The Perilous Fate of Modern Capitalism
If you believe that an easy solution to improve lower-class standards of living is to raise the minimum wage, or you are curious about what university presidents spend their time on, Angus Deaton’s new book provide insightful answers to those and many more questions that, taken together, challenge the relevance of modern economics and the capitalism it supports.
Income-Based Repayment Plans for Student Loans
Many entry-level jobs, especially those in education and social services, do not pay well enough for recent graduates to balance their student loan payments with rent and other expenses. This is where income-based repayment plans for student loans come in.
Debt Catharsis
The ancient Greeks had a word κάθαρσις, which in English we now spell as “catharsis,” although it’s pronounced basically the same. It originally referred to purifying religious ceremonies, medical treatments, and so on.
Charting a Course in Choppier Waters
Despite progress on bringing down inflation from mid-2022 highs, data from online job postings suggests that wage pressures may be reaccelerating. Beneath the surface, growing divergence in wage gains across occupation categories may be adding a layer of complexity to the outlook for labor markets.
Diversity of Thought A New Approach to Equity Alpha
The world is becoming an increasingly diverse place, especially the societies that we live in and we invest in. It’s not just about social equity that companies need to focus on diversity, equity, and inclusion; it’s really about business fundamentals.
With Housing, Millennials Have Much to Complain About
Since taking a big leap upward in the 1940s and 1950s, the homeownership rate in the US has been remarkably steady since the 1960s, with close to two-thirds of households owning their homes.
Tentative Times, Disconcerted Consumers, Volatile Markets
Higher for longer. The Federal Reserve will likely maintain higher interest rates and remain open to another rate hike. Borrowing costs for households, businesses and governments have risen with soaring rates.
Consequences Are Always Unintended
While the article focuses mainly on the rise in bond yields, it applies to several current market events.
Strength in Consumer Demand Remained Intact in Q3
The strength in consumer demand has been one of the defining characteristics of a very resilient U.S. economy and September’s retail and food services sales report confirmed that the U.S. consumer is alive and well.
Moving from Successful Advisor to Successful Leader
Here are my seven keys to emerging as a leader.
Guaranteed Lifetime Income is a Better Solution than Taxable Bonds
With interest rates at near 20-year highs, guaranteed lifetime income locks in those rates for the rest of one’s life, creating better retirement outcomes.
A New Risk-Controlled Fixed Income ETF
As interest rates have risen dramatically over the past year, income-oriented funds have become more attractive. With the income finally back in fixed income, advisors are searching for new opportunities to generate yield while mitigating risk in their bond investments. That’s why Madison Investments, an independently owned investment firm managing $22.9 billion in assets, recently launched its first suite of four income-oriented ETFs. The firm provides a range of investment strategies across mutual funds, managed accounts and customized investment portfolios. It added ETFs to its offerings in August. Two of the funds in its suite – the Madison Aggregate Bond ETF (NYSE: MAGG) and the Madison Short Term Strategic Income ETF (NYSE: MSTI) – seek to capitalize on the growing demand for dynamic, risk-managed fixed income strategies. My guest today will discuss how advisors can use these actively managed ETFs to get the most value out of their fixed income allocation.
Transactional versus Transformational Marketing
Should you opt for transactional tactics that promise immediate results, or invest in transformational strategies that build a lasting business? Should you focus on short-term success or long-term sustained strategy?
Headwinds Are Building for the Consumer
With next week’s 3Q GDP report shaping up to be a blockbuster number (the Atlanta Fed GDPNow is tracking a +5.4% growth rate), it is worthwhile to reiterate our thoughts on the economy and how we expect growth to unfold over the next year.
Financial Advisors on How Much Insurance Is Enough
Homeowners, drivers and other individuals in the marketplace for insurance, have a host of factors to consider to make sure they are appropriately covered in the event of a death, accident, or other untimely event, advisors shared in interviews with VettaFi.
The US Housing Market Is Now Completely Broken
For the first time since the Federal Reserve started raising interest rates, every part of the housing market is now poised to worsen.
Quarterly Review and Outlook Third Quarter 2023
The long history of business cycles illustrates that rising inflation precedes recessions. Inflation accelerations don’t just happen, they are caused.
U.S. Economic Outlook, October 2023
The U.S. economy’s remarkable resilience is complicating the lives of investors and the Federal Reserve. Despite war-disrupted commodity markets and one of the most aggressive monetary tightening phases in modern history, economic activity has remained strong.