Эпизоды
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Pierre welcomes back Ilan Kolet, Institutional Portfolio Manager at Fidelity Investments. This episode delves into Ilan's expert analysis on U.S. and Canadian economies amid ongoing global economic shifts. Discover insights on the Fed's unprecedented rate cuts, the productivity expansion in the U.S., challenges facing the Canadian economy, and Fidelity's tactical asset allocation positioning. Ilan also shares his experience and insight from the NABE conference and thoughts on the future of fiscal and monetary policy. Explore investment strategies and gain valuable perspectives on navigating today's markets.
Timestamped Highlights00:00 Introduction and Disclaimer
00:20 Guest Introduction: Ilan Kolet
01:38 Market Overview: 2024 Insights
02:25 Fed's Decision and Implications
04:14 Productivity Expansion in the U.S.
09:05 Comparing U.S. and Canadian Economies
13:31 NABE Conference Highlights
22:47 Divergence in US and Canadian Monetary Policies
23:21 Strategic Use of the Canadian Dollar
24:58 Impact of Interest Rate Differentials
25:48 Canada's Economic Growth Drivers
29:11 Decoupling of the Canadian Dollar from Oil Prices
31:28 US Shale Revolution and Its Implications
32:31 China's Economic Influence on Canada
33:49 Tactical Asset Allocation Strategies
37:44 Impact of US Election on Economic Policies
40:57 Fixed Income and Commodities Exposure
45:28 Ongoing Research and Portfolio Adjustments
48:32 Conclusion and Final Thoughts
Copyright © AdvisorAnalyst.com
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In this episode of the Insight is Capital podcast, Pierre talks to Martin Lefebvre, Chief Investment Officer at National Bank Investments. They explore Martin's outlook on the economy, fixed income, and equities, amid a backdrop of U.S. stock highs, falling bond yields, and changing labor market indicators. They discuss the recent Federal Reserve's 50 bps interest rate cut and its implications, the potential for a soft economic landing, and the intricacies of the U.S. and Canadian housing markets. Additionally, Lefebvre delves into strategies for handling expected market volatility ahead of the U.S. election and the broader implications of global economic factors on investment strategies. The conversation provides valuable insights into asset allocation amid economic pressures and highlights the importance of a balanced investment approach in current markets.
Timestamped Highlights00:00 Introduction and Disclaimer
00:20 Guest Introduction: Martin Lefebvre
01:31 Market Overview and Economic Outlook
03:30 Federal Reserve's Rate Cut Decision
06:25 Impact on Fixed Income Strategies
09:52 Recession Risks and Asset Allocation
19:15 U.S. Election and Market Volatility
30:16 Geographical Positioning
35:46 Conclusion and Final Thoughts
Copyright © AdvisorAnalyst
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Пропущенные эпизоды?
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In this episode of 'Raise Your Average,' co-hosts Pierre and Mike welcome Shana Orczyk Sissel, CEO at Banrion Capital Management. We explore Shana's 20-year journey in wealth management, her experience and insights on alternative investments, and the evolving landscape of the industry. Shana shares her personal story of transitioning from a career in sports management to finance, discussing the challenges and triumphs along the way. Our conversation gets into key trends and opportunities in the alternative space, including private equity, venture capital, and interval funds. Shana emphasizes the importance of differentiating and engaging clients through unique and personalized investment opportunities, from sports rights to fine art and beyond. With practical advice for advisors on how to integrate alternatives into client portfolios and the added benefits of working with experts, this episode offers a comprehensive look at making alternative investments accessible and appealing.
00:00 Welcome and Introduction
00:24 Guest Introduction: Shana Orczyk Sissel
02:01 Shana's Career Journey
04:31 The Role of Alternatives in Portfolios
11:41 Trends in Alternative Investments
21:26 Challenges and Opportunities in Alternatives
33:16 Exploring Market Neutral Strategies
33:45 Discussing BTAL: A Market Neutral ETF
35:23 The Complexity of Managed Futures
37:18 Return Stacking and Portfolio Diversification
39:00 Building Alternative Investment Portfolios
40:46 Banrion's Alternative Models
43:50 Understanding Diversifying and Non-Diversifying Alts
46:12 The Importance of Liquidity in Alternative Investments
51:52 Engaging Clients with Passion Investments
01:01:31 The Opportunity in Alternative Investments
01:05:24 Advice for Advisors Exploring Alternatives
01:10:18 Final Thoughts and Encouragement
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Where to find Shana Sissel, Banrion Capital Management:
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Banrion Capital Management
Shana Sissel on Linkedin
Shana Sissel on X
Shana Sissel on Instagram
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Where to find us:
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ReSolve Asset Management
ReSolve Asset Management Blog
Mike Philbrick on Linkedin
Rodrigo Gordillo on Linkedin
Adam Butler on Linkedin
Pierre Daillie on Linkedin
Joseph Lamanna on Linkedin
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In this episode of Insight is Capital, Pierre welcomes Dr. Todd Finkle, esteemed Pigott Professor of Entrepreneurship at Gonzaga University and author of 'Warren Buffett: Investor and Entrepreneur.' Dr. Finkle draws on nearly two decades of research and personal experiences and notably, his connection to the Buffett family (he shares his memories of friendship and hanging around at school with Buffett’s son, Pete, and his friendship with both he and Susie), of taking students to meet Warren Buffett in Omaha, to explore Buffett's investment philosophy, entrepreneurial spirit, and the lasting impact of Buffett's childhood during the Great Depression. The discussion highlights the influence of key figures like Charlie Munger and Phil Fisher in Buffett's life, the importance of critical thinking, and the value of surrounding oneself with supportive individuals. Dr. Finkle shares the challenges of writing his book and the invaluable lessons learned from Buffett's mistakes while providing unique insights about the importance to Buffett and Munger of avoiding toxic people and embracing continual, lifelong learning.
Timestamped Highlights
00:00 Introduction to Dr. Todd Finkle and His Unique Insights on Warren Buffett
01:31 Dr. Finkle's Personal Connection to Warren Buffett and family
02:49 Warren Buffett's Philosophy and Influence
07:08 Buffett's Humble and Positive Character
10:20 Family Ties and Early Life in Omaha
28:04 The Entrepreneurial Spirit of Young Warren Buffett
35:27 Dr. Finkle's Journey to Writing the Book
38:05 Meeting Warren Buffett: A Professor's Experience
41:33 Meeting Warren Buffett: A Life-Changing Experience
42:39 Exploring Omaha: The Heart of Buffett's Investments
44:27 Buffett's Investment Philosophy and Local Business Support
46:02 The Humble Life of Warren Buffett
56:40 Buffett's Mistakes and Lessons Learned
01:10:09 The Entrepreneurial Spirit of Warren Buffett
01:17:31 The Future of Berkshire Hathaway
01:24:10 The Importance of Critical Thinking and Entrepreneurship
01:25:59 Final Thoughts and Best Advice
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Bob Elliott, CEO, and CIO at NYC-based Unlimited Funds joined us on the show. We discuss his 13 years experience at Bridgewater Associates (10 years as head of Ray Dalio's investment research team), and the lessons he learned from the Global Financial Crisis. We get into the more recent period of ecomomic upheaval, and today's macroeconomic landscape. Bob shares his unique take on diversification, dissecting inflation, interest rates, as well as, for example, the impact deglobalization and reshoring may have on the U.S. economy. We explore Unlimited Funds' innovative strategies of hedge fund-like replication that everyday investors can now access, at far lower cost than 2&20 strategies. Bob stresses the significance of balancing risk in portfolios. He also shares insights on managing portfolio volatility, behavioral economics, and disciplined trading practices, offering invaluable advice on market assumptions and investment management.
Timestamped Highlights
00:00 Introduction and Host Greetings
01:36 Guest Introduction: Bob Elliott
02:41 Bob's Experience at Bridgewater
03:47 Lessons from the Global Financial Crisis
11:38 Current Macroeconomic Conditions
26:57 Impact of Interest Rates and Inflation
37:22 Gold as an Investment
41:16 Gold vs Bonds: A Comparative Analysis
42:14 Generational Perspectives on Gold
42:36 Understanding Economic Regimes
44:17 Strategic Portfolio Management
44:46 Challenges of Beating the Market
46:30 Accessing Top-Tier Asset Managers
47:33 The Role of Diversification
48:37 Replication and Manager Risk
51:19 Behavioral Aspects of Investing
01:03:09 Wealth Accumulation vs Wealth Management
01:04:59 Building a Robust Savings Portfolio
01:15:48 Final Thoughts and Best Advice
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Uranium expert Justin Huhn, Founder & Publisher of Uranium Insider, joins Pierre Daillie and Mike Philbrick on the show to discuss the unfolding generational bull case for uranium and the entire uranium and nuclear power generation sector. We explore the cyclical nature of the uranium market, current supply and demand dynamics, and the impact of geopolitical tensions. Justin provides valuable insights on the increasing interest in nuclear energy as a clean power source, driven by rising global electricity demand and technological advancements. He sheds light on the potential for significant market developments by 2029-2030, the importance of long-term contracts, and the investment opportunities emerging from the ongoing and increasingly robust supply-demand imbalance.
Timestamped Highlights
00:00 Introduction and Greetings
00:16 Hurricane Experience and Weather Patterns
01:08 Introducing Guest: Justin Huhn
02:50 Justin Huhn's Background and Entry into Uranium Market
04:57 Understanding the Uranium Market Dynamics
07:24 Impact of Fukushima and Market Recovery
20:16 Technological Advancements in Nuclear Energy
26:29 Growing Demand for Electricity and Nuclear Energy's Role
35:18 Uranium Processing and Conversion
35:50 Enrichment and Fabrication
36:59 Global Market Dynamics
37:58 US Nuclear Industry Challenges
38:46 Geopolitical Impacts on Uranium Supply
48:32 Investment Opportunities in Uranium
54:51 Market Volatility and Investment Strategies
01:01:05 Future Outlook and Conclusion
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In this episode of Insight is Capital, Pierre Daillie chats with Jason Buck, Chief Investment Officer at Mutiny Fund, to discuss defensive and offensive strategies in portfolio management - with equity valuations of the "Magnificent 7" it's now particularly essential for advisors and investors alike to consider defense ahead of any potential reversals. Buck points out that from a business perspective, advisors are leveraged to the equity market by 3-4x, when their business AUM is exposed to drawdown risks. Jason shares his journey from a real estate developer affected by the 2008 financial crisis to a consultant on risk management and bespoke long volatility strategies. He highlights the 'cockroach investment strategy' and the necessity of combining offensive assets like stocks and bonds with defensive assets like long volatility and commodity trend advisors. The importance of rebalancing, the concept of convexity, and the practical application of strategies like the Harry Brown portfolio model are discussed in detail. Using the memorable Herschel Walker analogy, Jason underscores the importance of a well-diversified portfolio. This episode is essential for investors and advisors looking to understand the implementation and benefits of a balanced approach to portfolio construction.
Timestamped Highlights00:00 Introduction - Guest - Jason Buck, Mutiny Fund
00:14 Jason Buck's Background and Investment Philosophy
00:49 The Cockroach Investment Strategy
01:20 Podcast Disclaimer and Welcome Back
01:49 Discussing the Cockroach Strategy
03:08 Importance of Diversification and Defense Strategy
04:44 Launching the Defense Strategy
06:47 The Great Financial Crisis and Its Lessons
07:40 Combining Offensive and Defensive Assets
08:53 Harry Brown's Four Quadrant Model
09:33 Modern Portfolio Techniques and Convexity
12:33 Commodity Trend Advisors (CTAs) Explained
14:12 The Role of CTAs in Inflationary Environments
15:01 Ensemble of CTAs for Robust Returns
24:04 Challenges in Explaining Trend Following
30:43 Understanding the Buy Button Mentality
31:05 The Case for Commodity Trend Following
31:38 Challenges in Portfolio Allocation
32:42 Financial Advisors and Client Resistance
34:37 The Importance of Defensive Assets
36:37 Cash and Capital Efficiency
39:19 Long Volatility and Tail Risk Explained
41:02 Convexity and Portfolio Insurance
48:51 Rebalancing for Effective Compounding
55:45 The Herschel Walker Trade Analogy
58:57 Conclusion and Final Thoughts
Copyright © AdvisorAnalyst
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In this conversation, Pierre Daillie interviews Elisabeth Kashner, Director of Global Funds Research, FactSet, about the trends and challenges in the ETF market. They discuss the slow pace of ETF flows in 2024, the impact of the Fed's rate cuts, and the attractiveness of cash investments. They also explore the rise of actively managed equity ETFs and the competition among asset managers to offer low-cost products. The conversation highlights the importance of providing exceptional value and solving the profitability challenge in the ETF industry. The asset management industry is experiencing a shift towards lower fees and increased efficiency, driven by the rise of ETFs. While some ETF issuers have raised their management expense ratios (MERs), it is often due to operational concerns rather than a desire to make more money. The industry is becoming more commoditized, allowing investors to focus on making the right asset allocation decisions. The ETF industry continues to grow, with inflows increasing every year. However, with over 3,500 ETFs available, investors need to do their homework and understand the products they are investing in.
Takeaways• ETF flows in 2024 have been slow compared to previous years, with investors gravitating towards cash investments due to their attractive yields.
• The rise of actively managed equity ETFs has led to increased competition among asset managers, with a few firms attracting the majority of flows.
• Asset managers face the challenge of offering exceptional value and solving the profitability issue in a highly competitive market.
• The barriers to entry in the ETF industry are low, but the barriers to success are high, requiring efficiency, scale, and effective capital markets management.
• The asset management industry is shifting towards lower fees and increased efficiency
• ETF issuers have raised MERs due to operational concerns, not to make more money
• Investors have a wide range of ETF options, but need to do their homework and understand the products
• The industry is becoming more commoditized, allowing investors to focus on asset allocation decisions
• Investors should seek the advice of a knowledgeable advisor to navigate the market
Copyright © AdvisorAnalyst
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Join us as we catch up with Som Seif, Founder and CEO of Purpose Investments. In this episode of Insight is Capital, Som shares his perspectives on the current volatile market environment, discussing trends in stocks, bonds, and interest rates. With a focus on sustainable investment solutions and economic productivity driven by AI, Som shares his views of market expectations, the role of the Fed, and the importance of preparing for multiple economic scenarios, considering the range of possibilities of 'higher for longer' monetary policy. Som shares his thoughts on the need to establish a mental model for advisors to consider while navigating today's uncertainty and to consider ways of building resilient portfolios for today’s more challenging and changing financial landscape.
Timestamped Highlights
00:00 Introduction
01:15 Market Overview and Current Trends
02:56 Bond Market Overview
06:03 Economic Assumptions and the futility of predictions
11:47 Comparing Consumer Resilience and Housing Market
29:43 A Mental Model for Investment Strategies and Portfolio Management
34:38 Advisors' Role and Resources
41:19 Closing Thoughts and Best Advice Ever Received
Copyright © AdvisorAnalyst
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Join us on the Insight is Capital Podcast as we interview Joel Litman, Chief Investment Strategist at Valens Research, discussing insights into the current equity, bond markets, and the challenges in commercial real estate. Discover the strong investment potential of the U.S. amidst global shifts, encouraging a disciplined, long-term investment strategy. We then get into a discussion of the limitations of GAAP accounting and the benefits of Uniform Adjusted Financial Reporting Standards (UAFRS). It’s earnings season, after all. Explore how understanding true business earnings and improved transparency can lead to better investment decisions, and outcomes. Dive into the nuances of corporate management claims, financial forensics, and market analysis, including Jerome Powell's statements on inflation, the pitfalls of EBITDA, and the past example of IBM’s flawed compensation strategy.
Timestamped Highlights00:00 Understanding Earnings Comparisons
00:11 The Impact of Inventory Methods on Profit Reporting
00:53 Challenges with GAAP Accounting
01:31 Historical Perspectives on Accounting Standards
03:39 Introduction to Uniform Accounting Principles
03:44 The Role of Shelby Davis in Accounting
04:29 The Importance of Consistent Accounting Standards
06:42 Market Insights and Economic Trends
07:54 The State of the Bond Market
31:19 Private Equity and Credit Markets
47:18 Understanding Sustainable Earnings
48:16 The Flaws of Wall Street Ratings
50:37 Uniform Accounting and Fraud Detection
53:00 Case Studies and Real-World Applications
55:04 Challenges in Financial Analysis
01:01:22 The Role of Audio Analysis in Detecting Deception
01:07:20 Teaching Uniform Accounting
01:14:08 The IBM Case Study
01:18:30 Advice for Financial Analysts and Investors
01:20:40 Global Economic Outlook and U.S. Dominance
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In this episode of Insight is Capital, Pierre Daillie, Managing Editor at AdvisorAnalyst.com catches up with Steve Hawkins, CEO of Longpoint ETFs. After a notable career leading Horizons ETFs (now Global X ETFs Canada) and a brief retirement travelling the world, Hawkins discusses his market outlook, his return to the investment industry with his new venture focused on building innovative ETF products. We dive into his experiences, strategic vision, as well as his take on the evolving landscape of the ETF market, touching on the importance of listening to investor needs and the distinct opportunities he plans to bring to both retail advisors and self-directed investors. The conversation wraps up with Hawkins' insights into the future of ETFs and his excitement for upcoming launches at Longpoint.
Timestamped Highlights
00:00 Introduction and Welcome
00:41 Steve Hawkins' Retirement Adventures
01:44 Return to the Industry
03:33 Building Longpoint ETFs
06:46 Innovations and Future Plans
11:00 Market Review, Challenges and Opportunities
13:32 Global ETF Market Insights
18:51 Partnerships and Strategies
36:09 Personal Reflections and Travel Highlights
41:20 Wrap up and Future Outlook
Copyright © AdvisorAnalyst
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In this episode of 'Insight is Capital', host Pierre Daillie sits down with Daniel Straus, Director and Head of National Bank Financials' ETF Research and Strategy Group, to discuss trends in the ETF market both in Canada and the U.S. They explore recent market conditions, the dynamics between U.S. and international equities, the role of AI and technology stocks, and the state of the bond market. Daniel also delves into investor behavior, the emergence of alternative investment strategies, and the implications of recent regulatory changes on ETFs. This comprehensive discussion provides extraordinary and valuable insights into the opportunities and challenges that shape today's ETF landscape.
Timestamped Highlights00:00 Introduction and Guest Welcome
01:31 Market Overview and Recent Trends
04:32 Economic Indicators and Household Spending
07:15 Investor Sentiment and ETF Flows
11:50 Bond Market Dynamics and Strategies
18:11 Trends in the ETF Market
24:22 Investor Behavior and Tactical Decisions
33:51 Exploring ETF Strategies for Recovery
34:18 Tax Implications and Strategies
34:35 Diversification in ETFs
36:02 Market Cap Weighting and Passive Investing
38:03 Tax Alpha and Risk Management
39:50 Investor Behavior and Cognitive Biases
41:26 Trends in International Markets
42:46 The Rise of Thematic ETFs
43:54 Crypto ETFs and Market Dynamics
49:07 Alternative Assets and Leveraged ETFs
58:54 Commodities and Inflation Protection
01:02:13 Conclusion and Future Insights
Copyright © AdvisorAnalyst.com
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In this episode of the Insight is Capital podcast, Ilan Kolet, an Institutional Portfolio Manager in Fidelity's Global Asset Allocation team, discusses the current investment landscape, focusing on the divergence between the Canadian and U.S. economies, the significance of productivity growth, and the strategic inclusion of liquid alternatives in investment portfolios. Kolet highlights the U.S. economy's remarkable growth compared to other G7 countries and emphasizes the potential of a productivity expansion in the U.S. to enhance economic growth without stoking inflation. The conversation also covers Fidelity's decision to incorporate liquid alternative strategies into their managed portfolio suite, aiming to improve diversification and risk-adjusted returns for investors. This move reflects a deliberate and research-based approach to portfolio construction, underscoring Fidelity's commitment to innovation while maintaining a cautious and incremental investment strategy.
Timestamped Highlights00:00 Catching Up After a Long Time
00:30 Divergence Between Canada and the U.S.
04:50 The Importance of Productivity
07:47 Stocks and Bonds Performance
10:12 Understanding Productivity Growth
16:39 Implications for Monetary Policy
20:14 Introduction and Episode Overview
21:04 Current Market Positioning
26:56 Incremental Investment Approach
27:06 Valuation and Sentiment in Investment Decisions
28:14 Comprehensive Global Asset Allocation Strategy
29:17 Manager Selection and Diversification
29:56 Rigorous Evaluation and Tactical Decisions
30:58 Challenges for Advisors
35:57 Balanced Fund of the Future
36:30 Inclusion of Liquid Alternatives
40:44 Democratizing Access to Alternative Investments
53:52 Strategic and Methodical Investment Decisions
55:04 Concluding Thoughts and Future Plans
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Bob Elliott, Co-Founder, CEO, and CIO of Unlimited Funds, and former long-time Bridgewater exec, discusses the company's pioneering use of machine learning to create low-cost index replications of alternative investments. The HFND ETF as the fastest growing independent active ETF launch in the US in 2022 and Bob shares his extensive experience in investment strategy development. Bob emphasizes the inspiration behind founding Unlimited, which was to democratize access to alternative investments by bringing concepts of diversified low-cost indexing to the world of two and twenty strategies. He explains the technology development process, the importance of building the technology based on an expert understanding of the types of strategies pursued by managers, and the company's focus on returns to gain a better understanding of how managers are positioned. Bob also discusses the impact of fees on investors, the role of public funds in leading the shift towards alternatives due to fee sensitivity, and the democratization of investments to make them more widely available.
Thank you for listening!
Timestamped Highlights00:00 At Bridgewater, he built a career around macroeconomic understanding, remains passionate.
06:55 Successful investors continually learn and trade their edge.
09:43 Lower fees, greater access through technology replication.
11:42 Machine learning approach for hedge fund strategies.
17:15 Factors and returns drive portfolio construction strategies.
19:00 Importance of expert-designed systematic approach for hedge funds.
24:33 Hedge fund managers balance risk and return.
26:32 Hedge fund objective: preserve wealth, reduce drawdowns.
30:51 Investors face fees and uncertain returns. Durable fee alpha.
35:06 Importance of low-cost diversified investment strategies explained.
38:26 Asset managers earn $700 billion in fees.
39:53 Industry fees need radical rethink for wealth.
43:39 Creating low-cost index products for everyday investors.
46:33 Investors need to diversify portfolio for inflation.
49:29 Grateful for the conversation and your insight.
Where to find Bob Elliott and Unlimited FundsBob Elliott on Linkedin
Bob Elliott on Twitter
Unlimited Funds
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In this episode Brooke Thackray, research analyst at Global X ETFs Canada, and advisor to the Global X Seasonal Rotation ETF (HAC), joins us to discuss seasonal investing trends across US and Canadian stocks and bonds. Thackray emphasizes the effectiveness of seasonality in fine-tuning the investment process with technicals and historical market patterns – just take a quick look at the chart for the ETF – confirmed. We also discuss the rotation aspect of the fund, the expectation, for example, of gold performing well in a strong upcoming seasonal period, and the anticipation of a weaker equity market over the next six months due to various factors. Thackray highlights the importance of relying on a long-term model and discipline for managing the investment process, and expects the seasonal framework to work even better over the next decade due to changes in market sectors.
Thank you for listening!
Timestamped Highlights00:00 Market signals mixed, economy struggles with inflation.
06:15 Economy has a rich-poor divide, different news.
14:23 Seasonal trends and market performance post-COVID.
16:04 Investors' shifting interest from trends to analysis.
22:57 Global X Seasonal Rotation ETF chart impressive.
32:10 Discussing the challenge of simplifying stock strategy.
35:21 Adhere to rules. E.g. gold sector showing strength.
38:32 Tech sector's strong performance suggests market caution.
44:32 Economy slowing, technicals show bond strength. Yield rising or remaining high.
50:35 Stock market trend uncertain, potential opportunities ahead.
55:34 Investing in mystery and history, a seasonal strategy.
01:00:15 Market behavior varies with seasonal elements.
01:05:04 Improving processes for future market changes.
Copyright © AdvisorAnalyst
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In this conversation Jeff Weniger, Head of Equity Strategy and Samuel Rines, Macro Strategists, Model Portfolios at WisdomTree Asset Management, join us to discuss various topics including the performance of the equity and bond markets, inflation, the labor market, and the real estate market. We explore the potential impact of rising yields on equities, the relationship between bonds and stocks, and the role of the US dollar as a hedge. We get into the challenges of navigating the current economic landscape and the reluctance of individuals and businesses to make changes in their financial strategies. Jeff and Sam unpack the impact of job mobility and housing on asset allocation. Jeff Weniger discusses the challenges of job relocation and the limitations it imposes on housing choices. He also highlights the rigidity of mortgage rates and the potential financial burden it creates for homeowners. Sam Rines adds that the lack of labor market dynamism and the preference for home remodeling contribute to the stagnation of the housing market. Then we shift to the changing dynamics of the US economy, with a focus on the transition from goods to services. Sam Rines emphasizes the normalization of the services sector and the potential lasting effect on the labor market. Our focus turns to a discussion about asset allocation and the push for domestic equity ownership in various countries. We explore the seismic shift in investment trends, with a focus on the changing dynamics of global markets. We dive into the history of investing in the early 2000s in emerging markets like Brazil, Russia, India, and China (BRIC), and how the focus has now shifted to investing in Japan, Korea and other markets where policy driving home bias is flourishing. We look at the role of China in the commodities market, particularly its insatiable appetite for base metals and gold. If anything, our entire conversation highlights the importance of diversifying portfolios and considering alternative asset classes like managed futures and commodities. They also touch on the impact of US-China relations and the potential risks and opportunities in the market.
TakeawaysThe equity market has performed well despite the backup in yields, indicating resilience in the face of potential headwinds.Bonds may provide a diversifying effect in a 60-40 portfolio, and there is an indication that bonds and equities may move in opposite directions this year.There is a misconception about inflation, with people often misunderstanding the difference between the rate of inflation growth and inflation levels.The labor market has been confounding, with indicators sometimes differing from what is happening on the ground.There is friction and inertia when it comes to individuals and businesses making changes to their financial strategies, such as moving cash to higher-yielding investments.The real estate market is slow-moving, and the effects of macro factors, such as the actions of the Fed, take time to materialize.The current economic landscape presents challenges, but there is a sense of managed control and a slower pace of change compared to previous cycles. Job mobility and housing choices can significantly impact asset allocation decisions.Rigid mortgage rates can create financial burdens for homeowners, limiting their job mobility.The lack of labor market dynamism and the preference for home remodeling contribute to the stagnation of the housing market.The transition from goods to services in the US economy is normalizing, potentially impacting the labor market.There is concern about a push for domestic equity ownership in various countries, which may affect asset allocation strategies, and US equity performance.Japan and Korea, and other countries (Canada) are at the centre of this push that is further bullish for them, and less so for the US where country allocations are concerned.China's insatiable appetite for commodities, particularly base metals and gold, has significant implications for the market.Diversification and considering alternative asset classes like managed futures and commodities are crucial for portfolio management.US-China relations continue to be a significant factor impacting the market, with potential risks and opportunities.Chapters00:00 Discussion about CTAs, market thresholds, portfolio diversification, and bond-equity relationship.
09:10 Labor market indicators are confounding due to COVID's impact on surveys - may not align with actual conditions. Sub-questions reveal differing responses.
15:38 Recent market issues addressed with intervention, BTFD easing bank assets.
17:10 Surprise at bank walk concept, advises money markets over savings accounts.
23:37 Macro moves slowly, taking 18 months to 2 years for major shifts. Real estate in the US takes longer to impact than expected.
29:48 Post-financial crisis house underwater issue slowed recovery, COVID impact on job mobility and quits.
34:29 Higher mortgage rates, bond market volatility, and housing market concerns persist.
42:38 Encouraging stock purchases through pension plans globally, with a focus on Japan and UK.
46:32 Concerns raised about potential totalitarian push for domestic equities by institutions with significant capital. Nationalistic push may impact relative performance of US equities.
53:44 Text suggests possibility of rising prices, impact on retail, potential for gold strength, and higher inflation and bear market probabilities. Cautions against putting all money in equities and bonds.
56:26 Gold's relationship to interest rates and the influence of a strong dollar on its value.
01:01:11 Under-the-radar aggregate companies outperformed in 2021.
01:08:23 Optimistic about US economy, pessimistic about US-China relations.
01:11:48 Many people don't plan for social security, but they should.
Copyright © AdvisorAnalyst
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Dennis Mitchell, CEO, CIO at Starlight Capital joins us this episode to discuss various topics including the impact of interest rates, the potential for rate cuts, portfolio construction for the period ahead - which will be marked by the persistent threat of inflation and higher rates for longer, the importance of proper pension-like diversification, and the rising risks of geopolitical instability, and authoritarianism, and ensuing political risk ahead. He expresses optimism about the long-term trends in private real estate, infrastructure, and equity markets. He also highlights the need for education and due diligence in investing in these asset classes. However, he expresses concern about the rise of authoritarianism and the erosion of democracy, which could have negative consequences for global markets and standards of living. We explore the current investment climate and the need for a shift in portfolio construction. Dennis Mitchell emphasizes the importance of considering and adding private assets and alternative asset classes with the objective of building resilient portfolios. Mitchell highlights the need for a diversified approach that goes beyond traditional 60-40 portfolios. We discuss the benefits of adding private equity, private real estate, infrastructure, commodities, and private credit. He emphasizes the critical need for enhanced financial education and the role of financial institutions in providing innovative investment solutions. We also get into the misconceptions about private assets and the importance of understanding the risks and returns associated with different asset classes.
Takeaways
Investors should consider diversifying their portfolios with private real estate, infrastructure, and equity assets to replicate the strategies of large pension plans.The Canadian market has recently opened up to alternative and real asset investments, providing more options for investors.Investors need to understand the benefits of diversification and the importance of long-term returns.Geopolitical risks, such as conflicts in the Middle East and Russia-Ukraine tensions, can undermine political stability and impact global markets.The rise of authoritarianism poses a threat to democracy, free markets, and innovation.The world has become smaller and more dangerous, with the potential for catastrophic consequences if leaders abdicate their roles or fail to address emerging challenges.The investment climate is influenced by geopolitical events and economic cycles, which create opportunities to allocate capital to different sectors and geographies.Traditional 60-40 portfolios are outdated, and investors should consider allocating more to alternative asset classes.Private assets, such as private equity, private real estate, infrastructure, commodities, and private credit, offer opportunities for long-term returns and diversification.Financial education is crucial for investors to understand different asset classes and make informed investment decisions.Financial institutions have a responsibility to provide innovative investment solutions and be accurate stewards of the economy.Chapters
Introduction and SettingThe Impact of Interest Rates and Rate CutsThe Canadian Market and InflationThe Importance of Diversification and Investing in Private AssetsThe Risks of Authoritarianism and Erosion of DemocracyThe Impact of Politics and Populism on Global MarketsThe Danger of Geopolitical Conflicts and AuthoritarianismThe World's Smaller and More Dangerous NatureThe Current Investment ClimateThe Decline of Traditional 60-40 PortfoliosThe Role of Financial Education and InstitutionsWhere to find Dennis Mitchell & Starlight Capital
Dennis Mitchell on Linkedin
Starlight Capital
Starlight Capital's Thought Leadership
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In this episode with SIACharts' President, Paul Kornfeld, we kick off our conversation with the recent changes in the Federal Reserve's rate cut projections and the performance of various stocks. We question whether it's a good time to 'buy the dip or sell the rip.' We get into the use of SIA charts in analyzing market trends and making investment decisions. What are the benefits of using a systematic approach and relative strength analysis? We touch on the challenges and opportunities of 24/7 trading, and the pressure that's mounting for moneycenter banks. We dive into the importance of having a rules-based approach and risk management in investing. We discuss the opportunities and risks in the market, and in particular the generational opportunity in the energy and materials sectors. Wending our way through the conversation, Paul peels back the layers on the importance of diversification and the need to consider the opportunity cost of investing in certain sectors. There's also the potential impact of various serious geopolitical events on international markets to weigh and the importance of incorporating risk management strategies, now. What has been the historical performance of different sectors and how great is the potential for a shift in market dynamics. What is the market indicating are trends to follow in specific sectors? What is the potential impact of inflation on portfolios and how great is the need to consider alternative asset classes?
<h3>Takeaways</h3>
<ul>
<li>The Federal Reserve's rate cut projections have been revised, leading to uncertainty in the market.</li>
<li>Using SIA charts and a systematic approach can help investors analyze market trends and make informed investment decisions.</li>
<li>24/7 trading presents both opportunities and challenges for investors, and risk management is crucial in navigating the market.</li>
<li>Money center banks are facing pressure due to rising interest rates, and it's important to monitor their performance.</li>
<li>Having a rules-based approach and discipline in investing can help mitigate emotional biases and improve investment outcomes.</li>
<li>There are opportunities for profitability in sectors like energy and materials</li>
<li>Diversification is important to mitigate risk and take advantage of different market opportunities.</li>
<li>Consider the opportunity cost of investing in certain sectors and evaluate the potential for higher profitability in other areas.</li>
<li>Geopolitical events can have a significant impact on international markets, and it's important to monitor and adjust investment strategies accordingly.</li>
<li>Incorporating risk management strategies is crucial to protect portfolios during market fluctuations.</li>
<li>The historical performance of different sectors can provide insights into potential future trends and opportunities in the market. Diversification and following trends in specific sectors can provide opportunities in the current market environment.</li>
<li>Inflation is expected to remain sticky, and portfolios need to consider alternative asset classes to fill the void left by bonds.</li>
<li>SIACharts is a tool that simplifies research and provides actionable insights for advisors.</li>
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In this conversation, Mike and Pierre talk to Tobias Carlisle, Managing Principal and Chief Investment Officer at Acquirers Funds, LLC, and portfolio manager of ZIG and DEEP ETFs. Toby shares his approach to value investing and the historical perspective he brings to the art of investing. He also talks about the performance of value investing and the importance of staying consistent with your strategy. Our conversation highlights the benefits of a systematic and quantitative approach to investing. We explore the challenges and strategies of value investing. Toby emphasizes the importance of having a systematic design and sticking to a set of rules to avoid emotional and behavioral mistakes. We discuss the ideological debate between value and growth investing and the need for a balanced approach. Our conversation turns to the role of activism in value investing and the importance of avoiding ruin and focusing on survival. The conversation continues with Toby sharing his insights into portfolio construction and the baked-in returns of value investing. We further explore the concept of investing in value stocks and the challenges that come with it – the importance of considering the long-term perspective and the potential for high returns despite short-term fluctuations. Mike and Toby deconstruct the role of market feedback loops and the impact of market crashes on investment strategies. Toby highlights the significance of character and reputation in investing. We ask Toby about his upcoming book 'Invincible' and its exploration of the parallels between value investing, Sun Tzu's 'Art of War,' and Lao Tzu's 'Tao Te Ching.'
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In this episode, our conversation with Aubrey Basdeo, Head of Fixed Income at Guardian Capital LP, we focus on the fixed income landscape and the outlook for interest rates in the US and Canada, the Federal Reserve's approach to inflation and interest rate cuts, as well as the differences between the US and Canadian economies, the impact of mortgage rates on consumer spending and the potential for rate cuts by the Bank of Canada. Overall, the conversation highlights the importance of maximizing optionality and the challenges of monetary policy in a changing economic environment, various topics related to central banks, portfolio construction, and fixed income investing. Our main themes include the shift in central bank narratives, the impact of inflation on monetary policy, the changing dynamics of portfolio construction, the shifting climate in holding duration for the sake of hedging portfolios, and the critical importance of using active management in fixed income. Our conversation also touches lightheartedly on the challenges faced by different generations in the current economic environment.
Timestamped Highlights:
00:00 Maximizing Optionality: The Federal Reserve's Approach to Interest Rate Cuts
12:10 US Exceptionalism: Strong Growth and Pro-Growth Policies
15:55 Challenges in the Canadian Economy: Higher Mortgage Rates and Slower Job Growth
17:54 American homeowners have tax deduction advantage.
21:16 Bank of Canada needs to pivot on inflation.
24:32 Bond market optimism can spell consumer pessimism.
26:43 Bank of Canada rate likely to rise.
32:32 Portfolio construction shifting due to global changes.
35:26 Hedging portfolio with fixed income shifted focus.
40:24 Fed should be less restrictive, economy speed-dependent.
43:20 Bank of Canada will ease rates moderately.
48:29 Central banks shift risk approach, requiring active management.
50:45 Focus on coupon, not duration, for returns.
54:12 Economic growth needs younger population to sustain.
"The mistake is that if they're going to make a mistake, it's that they're going to be focused on that two number (~2% neutral rate) and insist that they need to get to that, rather than you're on that trajectory towards two and you can start to ease at that point." "The world that we're entering into in terms of how things are going to, the factors that we're gonna be reacting to are going to be different from those factors that guided portfolio construction for the past 30 years." "If you're looking for duration as the hedge to the portfolio, that's not going to provide it in the same way that it did 10 years ago."TakeawaysThe Federal Reserve is aiming to maximize optionality in its approach to interest rate cuts, with the possibility of three cuts, two cuts, or no cuts depending on the evolution of inflation and the economy.The US economy is showing signs of exceptionalism, with strong growth and pro-growth policies driving the outlook for interest rates. In contrast, Europe and China are facing slower growth and export-driven challenges.The Bank of Canada is expected to ease interest rates ahead of the Federal Reserve, as the Canadian economy faces challenges from higher mortgage rates and slower job growth.The impact of mortgage rates on consumer spending differs between the US and Canada, with American homeowners benefiting from tax deductions and longer-term mortgages.Bond investors are optimistic about the potential for rate cuts, while consumers may be more pessimistic due to the potential impact on disposable income.The Bank of Canada will need to carefully navigate the path of easing, considering the impact on inflation, the interest rate differential with the US, and the potential depreciation of the Canadian dollar. Central banks may shift their narrative from targeting a specific inflation number to being less restrictive in their policies.Portfolio construction needs to adapt to a changing economic environment and regime shift.Duration may no longer provide the same level of protection in portfolios as it did in the past.Investors should focus on the belly of the yield curve for fixed income exposure.Active management is crucial in navigating the risks and opportunities in the fixed income market.The current economic environment has different implications for different generations.Copyright © AdvisorAnalyst.com
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