Gaining Perspective

According to my guest today, the lagging effects of central bank tightening will lead to a further deceleration in growth, a mild U.S. recession, anemic growth in Europe, but more resilience in emerging markets. Past episodes of high U.S. inflation suggest it will take about two years to bring core inflation down by half from its peak level. Equity valuations are stretched, particularly in big tech. Monetary authorities have decreased their support. And governments have probably already reached the limits of the fiscal stimulus they can provide.

Given those challenges, you will learn about the opportunities for investors across a range of asset classes. There are quality U.S. and international stocks that trade at reasonable valuations and stand to benefit from important technology and secular trends. The expectation of lower interest rates in the future is creating opportunities in fixed income markets. That is in longer duration and in niche parts of the market like cat bonds and agencies. 

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Here are links for more information about Marco and Amundi US:

• Amundi Website- https://www.amundi.com/usinvestors 
• Marco’s LinkedIn- https://www.linkedin.com/authwall
• Amundi US site- https://www.amundi.com/usinvestors/Insights/Research-Insights 

RIA merger and acquisition activity has slowed this year. Activity in Q4 accelerated but it may not be enough to eclipse the annual total of 264 in 2022. I’ll get into the details as well as what’s beneath the numbers with David DeVoe in this podcast. I have had the privilege of interviewing David every year around this time, and this is the fourth in that series.

Episode Resources:

• Here is a link to DeVoe & Co.’s web site- https://www.devoeandcompany.com/ 
• Here is a link to last year’s podcast- https://www.advisorperspectives.com/podcasts/2023/01/19/m-a-valuations-and-the-landscape-for-2023
• Here is a link to DeVoe & Co.’s dealbook- https://www.devoeandcompany.com/ria-ma-deal-books
• Here is a link to the DeVoe Elevate conference- https://www.devoeandcompany.com/elevate

From March 2022 to July of this year, the Fed raised rates by 500 basis points. But the economy has done well this year, with GDP growth of 2.0%, 2.1% and 5.2% in the first three quarters. Does that mean the lagged impacts of the Fed's aggressive monetary tightening cycle will be fully felt in the year ahead? Is a second wave of inflation remains a major risk? The answers to those questions have implications for equities as the economic environment is likely to be volatile.
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Here are links for more information about Jeff and ClearBridge:

• The Fed is Done, What’s Next? (blog) - https://www.clearbridge.com/blogs/2023/aor-update-the-fed-is-done-whats-next 
• Not Always a Straight Line Down (blog) - https://www.clearbridge.com/blogs/2023/aor-update-not-always-a-straight-line-down 
• Economic Outlook 2024: The Year of Lagged Effects (podcast) - https://www.clearbridge.com/perspectives/podcasts/2023/economic-outlook-2024-the-year-of-lagged-effects

If there’s anything advisors have learned this year it’s to expect the unexpected, and that volatility isn’t likely to end anytime soon. As we look ahead to the rest of 2024, we’ll explore one strategy that may help advisors weather the storm – real assets. Real asset categories – such as natural resources, infrastructure and real estate – have historically served as an effective hedge against inflation, demonstrated resilience across economic cycles, and provided diversification to more traditional portfolios. As such, they can remain a popular option for navigating inflation and recessionary risk. My guest today, Christopher Huemmer, senior client portfolio manager at FlexShares Exchange Traded Funds, will offer insights into how to invest in real assets and ways to get exposure with ETFs. 
 
Here are links for more information about Chris and Northern Trust:

• My 2021 podcast with Chris- https://www.advisorperspectives.com/podcasts/2021/12/13/the-three-topics-that-will-dominate-advisor-client-conversations 
• Here is a link to more information the FlexShares product line- https://www.flexshares.com/us/en/individual

The turmoil in the bond market over the past three years has been dramatic. The yield on the benchmark 10-year Treasury has risen approximately 360 basis points since the beginning of 2021, and it nearly hit 5% in late October. That has caused investors to question the value and role of a fixed-income allocation within portfolios. But two nagging uncertainties – the Fed and inflation – should be less of a problem as we enter 2024. Despite the recent volatility and negative returns, there are clear and compelling opportunities for investors willing to take the long view and evaluate fixed income from a historical perspective. 

Here are some resources to learn more about Todd and Reams Asset Management:

• Reams Asset Management home page- https://www.reamsasset.com/
• Raymond James Investment Management home page- https://www.rjinvestmentmanagement.com/
• The Raymond James Investment Management Markets in Focus Podcast- https://www.rjinvestmentmanagement.com/podcast

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

The world population is aging rapidly – 65 million people over the age of 65 will live in the U.S. by 2030.

The disparity between the length of time a person lives (their lifespan) and how long they are in good health and can function well (their healthspan) is widening. As a result, a significant portion of aging adults are spending longer portions of their lives in poor health as they struggle to pay for caregiving assistance.  This grim trend is the reason why 73% of aging adults in the U.S. cite sickness as their main concern. They want to improve their health to protect their retirement. Surprisingly, this is a highly underserved market. Many aging adults have savings, income and wealth-transfer solutions, but due to a broken insurance market and old paradigms, very few can get solutions to hedge against disability and its wealth-draining consequences.

In 2020, the NeverStop platform was launched to allow life and health insurers to help their policyholders live longer and better by protecting them from disability and its financial consequences.

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Here are links for more information about Larry and Assured Allies:

• The Assured Allies home page- https://www.assuredallies.com/ 
• The NeverStop home page- https://www.neverstop.com/ 

Themes ETFs, a new ETF sponsor, offers products that seek to provide investors with a way to own the opportunities that are shaping the future and moving markets, with expense ratios 40% cheaper than the average charged by competitor funds.  The offering at Themes ETFs spans both cutting-edge technologies and traditional industries, with targeted exposure ranging from generative artificial intelligence and cybersecurity to airlines and banks.  Backed by a former cofounder of GlobalX and a team of dynamic portfolio management professionals who collectively bring decades of prior experience and extensive expertise managing ETF portfolios for multibillion-dollar asset managers, Themes ETFs aims to disrupt the market with its competitive fee structure.  Themes ETFs has forgone a traditional wholesaling model to minimize its distributional expenses and maximize cost efficiency, passing those savings directly on to investors in the form of lower fees.

Here are links for more information about Taylor and Themes ETFs:

• The Themes ETF home page- https://themesetfs.com/
• The Themes ETF lineup- https://themesetfs.com/etfs/
• WISE - Generative AI ETF- https://themesetfs.com/etfs/WISE/
• SPAM - Cybersecurity ETF- https://themesetfs.com/etfs/SPAM/
• AIRL - Airlines ETF- https://themesetfs.com/etfs/AIRL/
• GSIB - Global Systemically Important Banks ETF- https://themesetfs.com/etfs/GSIB/
• Meet the Team at Themes ETFs- https://themesetfs.com/about/

Across the U.S. wealth spectrum, $2 out of $3 of investable assets are in taxable accounts. Having a comprehensive tax management strategy is critical. In the context of separately managed accounts, tax-loss harvesting is one component of a tax management strategy. Tax-efficient or tax-aware portfolio rebalancing is a key part of that. That includes the ability to evolve or rebalance the portfolios periodically in a tax-efficient manner by minimizing the overall tax liability. The tax-efficient techniques involve pairing gains against losses or avoiding short-term gains in favor of long-term gains, or capping gains in general to minimize overall tax cost.
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Here are links for more information about Manju and Allspring:

• Unlock Smart Outcomes (white paper)- https://www.allspringglobal.com/globalassets/assets/public/pdf/insights/investing/unlock-smart-outcomes.pdf 
• Megatrends: Tax Management (podcast)- https://blogs.allspringglobal.com/2023/09/megatrends-tax-management/?utm_source=insights&utm_medium=website&utm_campaign=podcast 
• Tax-Loss Harvesting: Seizing Opportunity in Fixed Income (white paper)- https://www.allspringglobal.com/globalassets/assets/public/pdf/insights/investing/tax-loss-harvesting-seizing-opportunity-in-fixed-income.pdf 

Ned Davis Research (NDR) is a global provider of independent investment research, solutions and tools. Founded in 1980, NDR helps clients around the world make objective investment decisions. Its strategists and analysts use fundamental and technical research with models, charts, indicators and weight-of-the-evidence methodology to help clients see the signals and invest with confidence. NDR is headquartered in Sarasota, Florida with offices in New York, London, and Hong Kong.
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Here are links for more information about Brian and Ned Davis Research:

• https://www.ndr.com/ 

With the S&P 500 hitting the lowest levels since last June, I thought it would be great to talk to Ranger Alternative about how advisors should be incorporating a hedge in clients' portfolios regardless of the market environment. 

Ranger Alternative is sub-advisor to AdvisorShares' Ranger Equity Bear ETF (HDGE). The brains behind HDGE is my guest, David Tice (senior advisor), as well as John Del Vecchio (co-portfolio manager) and Brad Lamensdorf (co-portfolio manager). 

HDGE is an actively managed ETF rooted in forensic accounting and technical analysis.
 
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Here is a fact sheet for AdvisorShares' Ranger Equity Bear ETF (HDGE) - https://advisorshares.com/etfs/hdge/ 

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.