Trending
1. Is Stock Market Concentration a Warning Sign?
The economy and the stock market are not always playing to the same tune. In today’s financial market ensemble, a stable economy plays a familiar melody with some nuance around rate cuts. Meanwhile, AI has staged a dramatic crescendo—perhaps lasting too long for comfort. — Stephanie Aliaga
2. Parents With Older Kids: Time for Some Tough Love
Obviously, it’s hard for caring parents to pass on helping their kids – regardless of ages – when it comes to finances. Some parents are apt to think ignoring such requests amounts to turning their backs on their loved ones. On the other hand, there are significant risks in extending long-term financial assistance to adult children. It’s simple math. Parents in their 50s and 60s that helping kids in their late 20s through early 40s are endangering retirement planning, saving for long-term care and likely trimming inheritances, too. — Todd Shriber
3. Career Risk Traps Advisors Into Taking on Excess Risk
Financial advisors get a bad rap. Some deserve it; most don’t. The problem for the entire investment advisory and portfolio management community stems from the “career risk” they inevitably face. That “career risk” has been exacerbated over the last decade as massive monetary interventions and zero interest rates created outsized returns. A point we discussed last week in “A Permanent Shift Higher In Valuations.” — Lance Roberts
4. 5 Effective Strategies for Financial Advisors to Educate Clients
Even though overeducating your clients can intimidate or overwhelm them into analysis paralysis or lost trust, still, one of your critical roles as a financial advisor is empowering your clients to make informed decisions. Financial advisors who prioritize client education foster trust and instill confidence in their clients. The more trust and confidence your clients have in you and your advice, the more enduring the advisory relationship will be. But you must walk the fine line between overeducating your clients and empowering them with the right amount and type of financial literacy. — Don Connelly
5. Hot AI Startups Will Go Bust
It costs billions of dollars to build and train AI models like ChatGPT. But as one money manager recently put it to me, these models “are the fastest depreciating assets in the world.” AI is advancing so rapidly that today’s state-of-the-art tech is obsolete within a few months. If airplanes had improved at the same rate as AI over the past two years, it would take 19 seconds to fly from London to New York! Startups are ploughing heaps of cash into building the latest and greatest models. Then a competitor comes along and dethrones them within months. Every investor wants a piece of all the shiny new AI “toys.” I’m talking about private companies like Anthropic… Perplexity… and Mistral. But they’re likely all zeros. — Stephen McBride
6. Capitalizing on the Undercapitalization of the Secondaries Market
There is a lot to like about the private equity secondaries market. The abundant growth in the primary private equity market, limited partners (LPs) who are seeking liquidity, or a need for cash, and the discount that buyout secondaries are trading at. All in, we believe this amounts to a solid setup for the strategy. — iCapital
7. Happy Halftime! It’s Been Difficult for Stock Investors to Not Make Money in 2024
We have reached the halfway point! Investors have received much more than Wall Street strategists expected to begin the year and trends appear favorable as we make the turn. Housing and inflation data reported this week reinforced odds of an upcoming Fed rate cut, GDP data reinforced odds of continued economic expansion and the Presidential debate increased the odds that we will not get bored heading into November. Enjoy your first days of summer and raise a koozie to toast a very happy halftime! — David Waddell
8. Don’t Let Your Prospect Be In Charge
A qualified inbound lead comes your way, stating their needs and what they’re looking for. You interpret their forthrightness as an indication they’re interested in hiring you. Give them what they want = win new client…easy day. So why is it that when you deliver your insights according to their specifications, they often don’t get back to you? — Ari Galper
9. Some Brutal Roaring Kitty Math
OK, he’s back, and here I find myself writing about him yet again, this time about some brutal math that has followed Roaring Kitty’s moves. Bottom line: most people who bought stock in his wake are losing money. Last week, when I thought that the bulk of the GameStop (GME) story was behind us, another cryptic Roaring Kitty tweet appeared – this time in the form of a cartoon puppy. Those who are adept at interpreting memes immediately bid up shares of Chewy (CHWY) and Petco (WOOF). Traders then focused more on CHWY on the basis that it was founded by GME’s current Chairman, Ryan Cohen. That opinion then proved correct yesterday when Keith Gill filed an SEC 13G acknowledging a position of 9,001,000 shares, or 6.6% of the company. (btw, I’ve never yet seen a filing that included the statement, “I am not a cat”.) — Steve Sosnick
10. Contemplating MAGAnomics
Following President Biden’s disastrous debate performance last week, markets have already begun pricing in the increased possibility of another Trump Presidency. While it has only been a couple trading days since the debate, it is notable that despite a PCE reading on Friday that appeared in every way benign from a near-term inflation perspective, ten-year yields are up by over 20 basis points from the lows of last week (as of Noon on 7/1). — Tim Pierotti
11. How to Balance Client Time With Practice Development
An ongoing challenge for advice firms is balancing client time with all the practice development work necessary to have a better business. There are after all only so many hours in a day, but then there are deadlines for when new standards and rules have to be met if one is to stay in practice. But then we also would really like to be commercially successful and make all this effort worthwhile, so there is no point trying to stay in practice if you are seeing no clients and making no money while you are doing it all. — Tony Vidler