Gaining Perspective

Meeting cash flow needs through distributions is challenging, with Treasury yields at rock-bottom levels and investors enduring widespread dividend cuts this year. Trying to generate a meaningful yield means unacceptable credit risk at a time when the bankruptcies are getting announced following months of government-mandated shutdowns. For investors looking to fund their day-to-day lives, a better approach is to focus on maximizing risk-adjusted returns to meet individual cash flow needs.  Target-distribution strategies, such as those developed by my guest today, leverage a modern-portfolio theory approach focused on risk-adjusted returns to deliver steady cash flow to investors while maintaining the principal over the long-run.

For retirement-oriented investors, especially those saving through 401(k) and other defined-contribution plans, the most popular solution is a target-date fund. Those funds are designed to build retirees’ wealth through a carefully constructed asset allocation and glide path that minimizes risk.  But designing those funds is a complex process, as my guest today will explain.

Amid historically low rates, the income solutions of yesterday are not going to cut it. My guest today will discuss how his firm has recognized and reacted to this paradigm shift by developing alternative, higher-yielding strategies.

Retirement savings for those in the Latino community are low. According to a 2018 UnidosUS report, only 31% of Latino workers participate in an employer-sponsored retirement plan, compared to 48% of all other workers ages 21 to 64. According to a CNBC story, 54% of Latinos work for an employer that offers a retirement plan compared to nearly 70% for all other workers in the same category.  My guest today has devoted his career to service the Hispanic community and will tell us how advisors can help address those gaps.

With the economic and market uncertainty brought on by the pandemic, investors, especially those nearing retirement, are looking to protect their savings. They need to guard the wealth that they worked hard to build. That has led to a growing interest in certain types of annuities that provide shelter against market volatility and offer the promise to grow one’s wealth and income.

We are roughly six months into the pandemic. Equity markets have regained nearly all of their losses following their precipitous decline in March. But the economy remains in a recession. Some are even calling it a depression. Advisors and their clients want downside protection, but also want to participate in the upside if markets continue to perform well. That has made defined-outcome ETFs the most popular product type among ETFs. Here today to talk about how those ETFs work is Bruce Bond of Innovator ETFs, the leading provider of defined-outcome ETFs.

Founded in 2018, Defiance ETFs is an ETF sponsor and registered investment advisor focused on thematic investing. Its suite of rules-based ETFs allows retail and institutional investors to express a targeted view on dynamic sub-sectors that are leading the way in disruptive innovations.

My guest today is a distinguished trial lawyer who has won cases against some of the biggest Wall Street firms, including Wells Fargo, Paine Webber, Securities America and the Prudential Equity Group. He was also one of the first to uncover and report on convicted Hollywood producer Harvey Weinstein’s crimes and played a big role in Weinstein’s downfall and conviction.

The problems of active management have been well documented. It has been statistically proven that it is incredibly difficult to identify managers who will outperform the market on a risk-adjusted basis. Those managers make a living by picking winning stocks that are likely generate above-market returns. My guest today, David Barse, has built a company around the premise that it is easier beat the market by identifying the losers rather than the winners. 

From the sage investor to the novice with little to no experience, humans are inherently emotional and often irrational when it comes to money decisions. This year alone, we’ve already seen how a global pandemic, unstable markets, and a sensationalized news cycle can influence investor behavior. This begs the question: How can financial professionals help keep their clients on track through uncertainty? My guest today, Mark Halloran, answered that question in a webinar we hosted in August. There were so many questions from the audience that I decided to have Mark back as my guest today to dig a little deeper into the critically important topic of behavioral finance.