Wealthtrack

How strong and lasting is the current rebound we are seeing in the economy? What about the resurgence in inflation? Those are major debates raging on Wall Street right now.   This week’s WEALTHTRACK guest is looking beyond the current rebound and focusing on what he sees as massive problems which will act as drags on recovery.  Robert Kessler, Founder, and CEO of Kessler Investment Advisors, a manager of fixed-income portfolios with a specialty in U.S. treasuries. Even before COVID, Kessler has been warning about economic and stock market risk.   On the program this week, he will discuss why he believes those risks have been exacerbated and the market is in a danger zone.   WEALTHTRACK #1751 broadcast June 18, 2021 More info: https://wealthtrack.com/exclusive-with-robert-kessler-on-why-100-years-of-stock-market-history-are-signaling-danger/ --- Support this podcast: https://anchor.fm/wealthtrack/support

The consensus for the economy is bullish. After a 6.4% annualized increase in real GDP, that’s without inflation, in the first quarter, recent forecasts are for 10% GDP growth in the second quarter, 7.5% in the 3rd, and 5% in the fourth.  As for inflation expectations, they are up. Again the consensus is that the combination of a rapidly rebounding economy, supply shortages, and tight labor market will lead to a sustained rise in prices.  The most prominent skeptic on that front is Federal Reserve Chairman Jerome Powell and other Fed officials who believe the price increases we are seeing now are transitory.  This week’s guest, influential economist Dave Rosenberg is in the Powell camp on this one and believes the recent jump in inflation is temporary and that the overall bullishness on the economy and markets is wrong and will be challenged before the year ends.  Dave Rosenberg is the outspoken and often contrarian Chief Economist and Strategist at his independent economic consulting firm

Times they are a-changin'…  With COVID vaccinations becoming widespread, savings rates high, and consumers ready to spend, the economy is reopening and rebounding with gusto.  All of these developments are creating new opportunities and challenges for bond investors.  Bond prices fall when interest rates rise and vice versa. After a 40-year bull market in bonds, with interest rates declining to record lows, has the bottom finally been reached after many false starts? How real is this uptick in rates and what does it mean for bond investors?  Our guest on WEALTHTRACK this week is Mary Ellen Stanek, Chief Investment Officer of Baird Advisors, and President of the Baird Funds, where she heads up the Fixed Income Team overseeing $91 billion dollars worth of bond investments.  Stanek discusses the rapidly changing conditions and her team's all-weather bond strategy in what she calls uncharted waters. WEALTHTRACK Episode #1747 broadcast on May 21, 2021 More Info: https://wealthtrack.com/new

“Jack be nimble Jack be quick” isn't a concept one usually associates with long-term value investors but sometimes extraordinary times call for exceptional responses. The first quarter of 2020 was one such event for this week’s guest.  Steven Romick, who has appeared on WEALTHTRACK since our launch in 2005 rarely does television interviews which is one of the many reasons we are delighted to have him with us this week. For those of you not familiar with him, he is Co-Portfolio Manager of the FPA Crescent Fund which he founded in 1993 and ran for many years before bringing on his current team. Since its inception this go anywhere, invest in anything balanced fund has delivered better than 10% annualized returns besting the stock market and its balanced portfolio benchmarks by substantial margins.  WEALTHTRACK #1746 broadcast on  May 14, 2021 More Info: https://wealthtrack.com/great-investor-steven-romick-loaded-up-on-unloved-stocks-during-2020-sell-off-whats-his-plan-now/ --- Support this po

There is a rule of thumb on Wall Street that when a fund knocks it out of the park in any given year or has an exceptional winning streak for a couple of years it is bound to fall to earth sooner rather than later and lag the market, its peers, or both for several years. It's called reversion to the mean. With few exceptions, this week’s guest has been in the winning streak category for a while. He is Michael Lippert, Head of Technology Research at Baron Capital and portfolio manager of the firm’s high-growth stock oriented Baron Opportunity Fund Morningstar’s one caveat about the fund’s performance has been its volatility, as it focuses entirely on companies with high rates of growth, not on the mitigating effects of returning capital to shareholders with stock buybacks or dividends. Volatility is a topic Lippert tackled in-depth in a recent quarterly letter to fund shareholders. I ask him to share his views with us. WEALTHTRACK #1745 broadcast on May 07,2021 More Info: https://wealthtrack.com/?p=22536 “The

The shift from COVID lockdown to COVID reopening has been stunning. Depending upon the stage of reopening economies around the world are rebounding. The markets’ response has been swift and dramatic particularly in the U.S. So what do you do if you are running a highly concentrated, large-cap growth fund? That is the challenge facing this week’s guest. Damon Ficklin is head of the Large Company Growth team at Polen Capital. In his first appearance on WEALTHTRACK I will begin with the basics. I will ask him to describe Polen’s high conviction, the low turnover strategy of focusing on the highest quality growth companies with margins of safety.  What does that actually mean? WEALTHTRACK #1544 broadcast on April 30, 2021 More info: https://wealthtrack.com/focusing-on-highest-quality-growth-companies-with-margins-of-safety-pays-off-at-polen-capital-2/ --- Support this podcast: https://anchor.fm/wealthtrack/support

Beware the headline makers! According to Wall Street lore when a financial asset hits the front pages it can signal a turning point, either a recovery if negative, or a fall if positive. What’s making headlines today? Bitcoin and other cryptocurrency-related investments, including dogecoin, a meme-inspired cryptocurrency created as a joke in 2013. “This is absurd,” said Billy Markus, the co-creator of dogecoin. “I haven’t seen anything like it. It’s one of those things that once it starts going up, it might keep going up.”  Dogecoin however is not the real story. Bitcoin, the world’s first and largest digital currency is, as well as Ethereum, the second largest and the blockchain networks they support.  And there are other players emerging. Coinbase Global Inc, the largest market exchange for digital currencies went public on the Nasdaq this week and its $85 billion market value easily surpassed that of the Nasdaq itself and ICE, the parent company of the New York Stock Exchange.  The cryptocur

Have you noticed how rampant speculation is? Random investors seem to be making money hand over fist in numerous assets: disruptive companies like Tesla, whose stock has soared 600% in the last 12 months. Old economy stocks like video retailer GameStop up nearly 6,000% propelled by traders on commission-free trading platforms like Robinhood.  These are not isolated events. The zeitgeist is becoming very bullish. Do you feel like you are missing out? Has the world moved on?  No, it has not according to this week’s guest. In part 2 of our interview with financial thought leader, Richard Bernstein he makes a compelling case for long-term fundamental investing.  Bernstein is Chief Executive and Chief Investment Officer of Richard Bernstein Advisors. Rich has also been a regular since WEALTHTRACK’s launch in 2005.  We’ve weathered our share of booms and busts over the years. He will discuss some time-tested strategies to invest successfully through both conditions.    WEALTHTRACK #174

We have been living through an extraordinary period. It was a year ago that COVID was recognized as a global pandemic and since then over 100 million people have been stricken and more than 2 million have died.  Economies were locked down causing severe recessions. Central banks and governments responded with unprecedented amounts of monetary and fiscal stimulus. A worldwide effort by pharmaceutical companies to develop effective vaccines did so in record time. Millions are now in the process of being vaccinated. Global economies are now recovering with China and the U.S. recovering at a rapid pace.  Is the worst behind us? Are world economies and markets on a sustained path of recovery as many believe or are there serious hidden risks?  Risks are the concern of this week’s guest whose top priority as a money manager is capital preservation. He is Matthew McLennan, Head of the Global Value team at First Eagle Investment Managemen. Long before the pandemic, McLennan had been monitoring emerg

When a fringe economic theory goes mainstream and is actually implemented by policymakers you better pay attention. The once-fringe theory in question is called Modern Monetary Theory, or MMT for short.  The assumption behind MMT is that massive government spending helps the economy grow to its full potential, including full employment, and also finance major programs like universal healthcare, free college tuition, and green energy initiatives. Sound familiar?  What about the burgeoning federal debt? Not an issue according to Federal Reserve Chairman Jerome Powell. In an interview on National Public Radio this week Powell   said: “Given the low level of interest rates, there’s no issue about the United States being able to service its debt at this time or in the foreseeable future.”  Enter today’s guest, Paul McCulley, who wrote an academic paperback in 2013 titled: “Helicopter Money, Or How I Stopped Worrying and Love Fiscal-Monetary Cooperation.”    McCulley is curren

It doesn’t take a rocket scientist to figure out that 2021 is a year of significant political and macroeconomic change. Meanwhile, the rollout of COVID vaccines is starting to unleash a year’s worth of pent-up consumer and business demand.  That demand is also putting upward pressure on prices and inflation expectations. Those pressures are showing up in the bond market where yields on long-term bonds, the most sensitive to rising inflation expectations are rising. The price of 30-year Treasurys has fallen 15.6% in just three months.  This is a huge change and could signal the end of the 40-year bull market in bonds that many Wall Street pros have been predicting for years. Perhaps they will now be proven right.  This week’s guest has been telling clients that inflation will probably be higher than many believe, that a significant cyclical recovery is in the works and is bringing with it a major change in market leadership.    He is a noted investment strategist known for his macro an

Part 2 of 2 John Rekenthaler has been tracking mutual funds at Morningstar since 1988.  He correctly predicted early on that index funds would surpass actively managed funds. Now he sees a similar trend for ETFs as they attract record amounts of cash and mutual funds suffer outflows.  WEALTHTRACK #1737 published on March 11, 2021 More info: https://wealthtrack.com/morningstars-john-rekenthaler-explains-why-etfs-will-surpass-mutual-funds-as-the-industry-standard/ --- Support this podcast: https://anchor.fm/wealthtrack/support

John Rekenthaler, Vice President of Research at Morningstar and author of the twice-weekly “Rekenthaler Report” analyzes the influence of the online investment communities that have driven GameStop’s meteoric rise and stunning declines. Rekenthaler says their influence is here to stay, at least until regulators get involved.  WEALTHTRACK #1736 published on March 05, 2021 More info: https://wealthtrack.com/the-manipulation-of-stocks-by-social-media-investors-is-the-focus-of-morningstars-john-rekenthaler/ --- Support this podcast: https://anchor.fm/wealthtrack/support

The balance sheet of the Federal Reserve continues to surge at an unprecedented rate, up 83% y/y to a historic level, $7.59 trillion at the latest count. According to our WEALTHTRACK podcast guest, financial historian, and long-time market observer James Grant, interest rates, the “central pricing mechanism for financial markets” have been pushed to artificially low levels by the Fed’s policies which have created numerous market bubbles. He cites Bitcoin as one of the most extreme examples. WEALTHTRACK #1735 published on February 26, 2021 More info: https://wealthtrack.com/bitcoin-is-one-of-many-bubbles-of-historic-proportions-today-says-financial-historian-james-grant/ Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth: https://amzn.to/3sxkIJm --- Support this podcast: https://anchor.fm/wealthtrack/support

Part 2 of 2 Old fashioned asset allocation used to be a fairly simple exercise: 60% individual stocks, usually U.S. large-caps and 40% bonds, mostly investment-grade corporates, some Treasury securities for liquidity, and a smattering of municipal bonds for higher tax bracket individuals.    Today it's a whole different ball game, juggling multiple global asset classes, using complex computer modeling, algorithms, pricing formulas, and intensive analysis.   This is the realm of Sébastien Page, head of T. Rowe Price’s Global Multi-Asset division where he oversees $350 billion in assets. Last week on WEALTHTRACK we discussed the concepts in his new book, Beyond Diversification: What Every Investor Needs to Know About Asset Allocation.   This week we will address the current investment environment and how he and his team are positioning clients’ portfolios. What does Page think of these alternative asset classes? We’ll find out.  WEALTHTRACK Episode #1734 broadcast on February 19, 2021

Part 1 of 2:  Talk to most investment professionals and they will tell you that portfolio diversification is the key to successful investing and that asset allocation among multiple asset classes, not individual security selection, accounts for as much as 100% of investment returns. Being broadly diversified among different asset classes is supposed to give you strong exposure to market rallies and protection in down markets as non-correlated assets zig when others zag and soften the downside impact. However, there are times when diversification doesn’t seem to work. Take the huge sell-off in the spring of 2020, the shortest bear market in history when asset classes plunged pretty much across the board, even gold and Treasuries took a hit.  What are the lessons to be learned about the usefulness of diversification from 2020’s experience? Is there a better way?  Our guest today is a financial thought leader in asset allocation at T. Rowe Price. Sébastien Page, Head of Global Multi-Asset at the f

One of the most notable characteristics of the last decade was the wide divergence in market performance. We have reported many times on the narrow group of superstars, mainly large-cap U.S. tech stocks and the much wider universe of laggards, value and small-cap stocks in particular.  In 2020 that divergence blew up.  Small-cap went from worst to first. The year began disastrously.   Small-caps ended the year with their best quarterly gain ever, a stunning 31% advance in the index, handily beating large-caps for the quarter.  When it was all over the Russell 2000 had gained 101.3% from its March 18th low to year-end, although it lagged large-cap and tech for the entire year.   We have a WEALTHTRACK exclusive this week with an investment legend whose specialty is in-depth financial analysis in the small-cap universe. He is Charlie Dreifus, lead portfolio manager of the Royce Special Equity Fund  Before delving into small-caps I asked Dreifus to share his perspective on curre

Blast off! Stock markets are setting records, with tech stocks leading the charge once again. “Don’t fight the Fed” should now encompass “don’t fight the Treasury, fiscal stimulus, vaccinations and investor demand for ‘real’ (after inflation) returns.” The Wall Street Journal reports that the “S&P 500 rose 14.3% from Election Day through Inauguration Day, its best performance on record for that period.” (The Wall Street Journal “Stocks Climb To Records, Led By Tech Sector” 1/21/21)    In retrospect, 2020 was an entire year for the record books:  - A once in a century global pandemic; - Unprecedented, massive monetary and fiscal stimulus; - A brief deep recession and the shortest bear market in U.S. history; - A record-breaking stock market rally; - The continuation of near record-low interest rates - And the election of a new president with a very different policy agenda.  Portfolio rebalancing is just one of the actions on Christine Benz’ financial to-do list this year. In part 2 of

COVID-19 has affected just about every aspect of our professional and personal lives, including the state of our finances. Whether you or a loved one are among the more than 20 million Americans who lost their jobs in the spring of 2020 in the depths of the lockdowns, or one of the millions of Americans who saw their retirement portfolios plunge in the shortest bear market on record in February and March, (and if you stayed invested have benefitted from the markets rebound), or if you or a loved one are among the 20 million Americans who have been stricken by COVID your finances have been affected. Financial services firm Morningstar has also been paying attention. In a recent article, “What the Coronavirus Means for the Future of Financial Planning,” its Director of Personal Finance, Christine Benz addressed the issue and we have asked her to enlighten us. WEALTHTRACK # 1729 broadcast on January 15, 2021 More info: Books mentioned in  the episode: https://wealthtrack.com/the-pandemic-era-requires-rethin

We have a special treat for you. Robert Shiller, a Nobel Prize-winning economist, a pioneer in the field of behavioral finance, long-time Yale professor, financial innovator, and prolific author. Shiller is also the co-creator of the widely cited gauge of U.S. housing prices, the Case-Shiller Home Price Index, and creator of the cyclically adjusted PE ratio known as the Cape Ratio which is a price-earnings ratio for the S&P 500 based on average inflation-adjusted earnings from the previous ten years. Because it includes ten years of earnings many consider it to be a more reliable gauge of market value. His presence could not be more timely. He is known for identifying the tech and housing bubbles long before anyone else did, and here we are in the midst of an economy crushing pandemic with home prices booming and stock prices hitting new records.  We started with the stock market, his analysis of the record-setting performance. WEALTHTRACK # 1728 broadcast on January 08,2021 More info: https://wealth