Gaining Perspective

Look in your email, and it’s a sure bet that in the last 24 hours you will have received offers of millions of dollars from Nigerian princes or lottery winners looking for ways to share their riches with you. You probably wondered how anyone could be so gullible to fall for those scams. But, as my guest today will explain, at some point we’ve all been tempted by the prospect of easy money, improved health or a romantic relationship. 

A proven strategy to increase income on an equity portfolio, while maintaining some of the upside potential, is to sell call options against the holdings. That strategy is often implemented with the S&P 500. But what advisors may not know is that this buy-write strategy can also be pursued with Nasdaq indices.

If China is a benchmark for the scale of economic disruption caused by the coronavirus, the impact has been colossal. Industrial production declined by 13.5% year-over-year in January and February. Retail sales and auto sales declined by 20.5% and 37.0%, respectively, during the same period. Now that the peak of the outbreak seems to have passed in China, its economic growth is starting to recover, albeit at depressed levels.

MSCI is a leading provider of indices for a variety of asset classes. Its factor Indexes, which we are going to talk about today, are designed to capture the return of factors which have historically demonstrated excess market returns over the long run. These are rules-based, transparent indexes that target stocks with favorable factor characteristics – as backed by robust academic findings and empirical results – and are designed for simple implementation, replicability, and use for both traditional passive and active mandates.

My guest, Rob Arnott, is here to discuss the big questions that should concern all advisors and their clients. How deep and how prolonged will the expected recession be? Have we reached a tipping point where we have passed the maximum level of fear? If so, how should advisors allocate their clients’ assets? What is in store for the capital markets over next decade?

The last decade has been a painful one for investors who believe in a factor-based approach to investing and have stuck with those factors that historically performed well – namely the value factor, which has severely underperformed growth over those 10 years. But a breed of products have avoided that plight. Funds and ETFs that have were designed to be nimble and allocate across a range of factors have not suffered the same performance deficit.

Today’s release of employment data confirmed what we were all expecting – a precipitous collapse in the number of Americans who are gainfully employed.

Crises call for leadership. But leadership is not something that can be precisely defined. On an intellectual level, it combines an understanding of risks and opportunities, and a realistic assessment of one’s strengths and weaknesses. But it also demands a realistic vision of what the future holds and how to get there. And then leadership calls for the skills to communicate that vision and motivate your team to get there. I am privileged to speak today with one of the leaders in the wealth management industry, Shirl Penney, to talk about leadership in the coronavirus crisis.

The coronavirus put an end to America’s longest post-war expansion. We are all but certain to face a recession this year. But that recession will be wholly different from any other in our economic history. It will inflict its damage primarily on the service sector of our economy: travel, hospitality, entertainment, restaurants and a host of other services. I am here today to talk with one of the world’s foremost economic thinkers who will reflect on that scenario.

For many businesses, the sudden transition from a physical to a virtual company has been jarring. But other businesses have been operating remotely since their inception. One example is Advisor Perspectives, and another is the marketing platform, Twenty Over Ten. I am joined today by two of the principals of Twenty Over Ten, who will talk about their unique story, what they did to create an effective virtual company and how they are helping advisors with their communications strategy.