Deep Economic Thoughts

In preparing for my September 2024 Forbes article, I stumbled upon a shocking set of nearly identical, devastating economic statistics regarding the U.S. economy.

Graphs and data referenced in this episode comparing the periods of 1975 to 1980 versus 2019 to 2024 can be found at: https://www.alignewealth.com/blog/research-highlights-09-04-2024

For more information, please visit: https://www.alignewealth.com/

Copyright © 2024, AWAIM®

Investment advisory services offered through Aligne Wealth Advisors Investment Management (AWAIM®), an SEC registered investment adviser. SEC registration does not imply a certain level of skill or training. AWAIM may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.

The opinions expressed herein are those of certain AWAIM personnel and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to revision due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.

AWAIM believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact or materially misleading information. This third-party content may be dated.

As discussed in detail last summer (see Research Highlights and Forbes article), comparing the Earnings Yield on stocks (using the S&P 500 Cyclically Adjusted Earnings Yield [CAEY]) to the Risk-Free Yields on U.S. Treasury Bonds can have an elucidating effect on an investor's favor towards equities or away from them.

Recall that Earnings Yield is equal to Earnings Per Share divided by its Stock Share Price. By simply inverting the Price-to-Earnings (PE) Ratio, you attain the Earnings Yield, which standardizes a stock's attractiveness as a cash flow instrument (typically stocks are bought for capital growth or dividend yield or some combination thereof) relative to other cash flows instruments (typically bonds for fixed income purposes).

Updated Research Highlight with data referenced in this episode found at: https://www.alignewealth.com/blog/research-highlights-08-07-2024

Copyright © 2024 Ivan Illan, AWAIM®

In this month's episode, Ivan Illan, Founder & CIO at AWAIM®, explores the dichotomy of two segments of the capital markets - U.S. high yield bonds and U.S. small cap stocks. Both of these segments are predominantly charaterized by below investment grade credit ratings and typically demonstrate high price correlations. However, the past few years have not held this relationship. Ivan examines what may be driving this valuation differential, and what that may mean for risk assessment on a forward-looking basis.

For more information on this subject, please visit the charts referenced in this episode at https://www.alignewealth.com/blog/research-highlights-07-03-2024

Copyright © 2024, AWAIM®

The past few days have been hard on A.I. stocks, which until now have been driven higher and higher by the widespread A.I. euphoria. In this episode, I discuss a recent Working Paper (published May 2024) from the National Bureau of Economic Research that shares a more modest projection on the impact of A.I. in total factor productivity over the next 10 years.

For more information on this Working Paper, please visit NBER at: https://www.nber.org/papers/w32487

For more information on AWAIM®, please visit: https://www.alignewealth.com/

Copyright © 2024, AWAIM®

For roughly two years, the U.S. economy has been undermined by a challenging dynamic - a yield curve inversion. Not to be ignored, when short-term interest rates are much higher that long-term interest rates, investor and lender behavior modulates accordingly. If this dynamic persists too long, unintended consequences become manifest across marketplace participants.

To view the companion chart to this episode, please visit: alignewealth.com/blog/research-highlights-05-01-2024

For more information on our economic outlook or to submit your questions, please visit: alignewealth.com

Copyright ©2024, AWAIM®. All rights reserved.

The Buffett Indicator (or Ratio) is a simple formula often referenced by famed investor Warren Buffett. It's simply, Total U.S. Stock Market Capitalization / U.S. GDP. The idea is basically higher ratios infer overvalued markets, while lower ratios may indicate stocks are broadly undervalued. Currently, this ratio stands at 186%.

However, what if you applied this formula to specific sectors to discern whether that particular market segment is overvalued or undervalued relative to one another? That's the premise of this episode, where the data and charts related to its discussion can be found on our website's Research Highlights at https://www.alignewealth.com/blog/research-highlights-04-09-2024

For more information or to submit your questions, please visit: https://www.alignewealth.com/

Copyright ©2024, AWAIM®. All rights reserved.

Ivan Illan, Founder & Chief Investment Officer at AWAIM® shares a conversational-style review of a recent research highlight published on the firm's website discussing U.S. credit card delinquency and other correlated metrics such as household savings, debt levels, and interest rate on credit cards. This discussion focuses on the confluence of these metrics to illustrate an increasingly stressed out economy and labor market.

For more information, charts, and data on this subject, please visit https://www.alignewealth.com/blog/research-highlights-03-06-2024

© 2024 AWAIM®

AWAIM Website: https://www.alignewealth.com/

In this episode, Founder & CIO, Ivan Illan discusses the myriad issues around having a significantly positive US Output Gap - an important economic metric that reveals underlying inflationary pressures in an economy.

For more information, charts and other details related to this episode, please visit: https://www.alignewealth.com/blog/research-highlights-02-07-2024

© 2024 AWAIM®

REPLAY: On-Air Live interview of Ivan Illan on AM830 from "The Bruce Cook Conversation" orignally broadcast on Sunday, January 7, 2024 at 6PM PST.

Ivan and Bruce chat about various economic issues impacting folks today from interest rates and taxes to debt and the upcoming election. Wide scope of topics covered and additional commentary on domestic and international risks within the capital markets for 2024.

https://www.alignewealth.com/

In this final episode for 2023, bestselling Dummies author, Forbes Finance Council member, Founder & CIO Ivan Illan, shares some preliminary insights as to what may play out during 2024 for both stock and bond markets globally.

He highlights the period beginning March 2022, which coincides with the Federal Reserve's initiating a restrictive U.S. monetary policy. Since then, stock and bond markets have been struggling to make sense of the impact, eeking out low single digit gains in stocks and still negative returns for bonds.

For more on Ivan's perspectives, please visit: https://www.alignewealth.com/blog https://www.forbes.com/sites/forbesfinancecouncil/people/ivanillan/

© Copyright 2023 Ivan M. Illan, AWAIM®