Orion's The Weighing Machine

Inflation is one of the many things that can erode your investment returns, leaving you with far less than you anticipated.  How can you protect yourself from inflation and maximize your yield?In today’s episode, Rusty and Robyn talk with Scott Henderson, Senior Vice President and Portfolio Specialist at Calamos Investments. Being with Calamos Investments since the beginning of his career, Scott has gained a deep understanding of alternative investments and convertible funds. Because of the many hats he wears, he has been part of the company's transformation into a diversified global investment firm today.Scott talks with Rusty and Robyn about alternative and convertible bond investing, the pros and cons of convertible funds, and what makes a good investment manager and a good investor.Key Takeaways [4:14] - Scott's role at Calamos Investments. [5:38] - What attracted Scott to the world of investment. [7:06] - How market-neutral funds work. [7:40] - What sets Calamos’ market-neutral fund apart from other market-neutral funds. [9:15] - Simple rules for evaluating alternative funds. [11:26] - The challenge of chasing yield in income funds. [12:40] - Scott's recommendations for managing investments in alternative and convertible bonds. [13:59] - The concept of convertible funds. [17:02] - The pros and cons of convertible bonds. [18:50] - How financial advisors and investors maximize current yields. [20:08] - What makes a good investment manager. [21:33] - The qualities of a good investor. Quotes[9:15] - "The problem with alternative investments, many of the firms that do the analytic work try to just compartmentalize a lot of different funds into one category. So my thinking when it comes to market-neutral funds or even alternative funds is to really start by asking the question, what problem is this investment trying to help me solve?" - Scott Henderson[11:51] - "I think one of the challenges that we tend to see with chasing yield is that we either try to extend our durations in our bond portfolio out very long to get more yield or we dip down into lower credit quality." - Scott Henderson[17:07] - "Convertibles can be complicated investments. So you need someone that's really looking at the convertibles, looking at the credit quality, or looking at the upside potential. But if they're managed correctly, convertibles can provide an attractive risk/reward as well as that yield advantage over the common stock." - Scott Henderson[20:18] - "Good managers should possess benchmark awareness. They need to have a strong understanding of the risks in their asset class that they invest in and make a sound decision with those risks in mind, not just increase their portfolio's risk in order to match or exceed the benchmark returns." - Scott Henderson[21:33] - "A good financial advisor is one that's keeping up to date with the market environment, listens to the needs of their client, provides education to them, does a thorough analysis, and looks into the client's willingness and ability to take those risks." - Scott HendersonLinks  Scott Henderson on LinkedIn Jimmy Buffett One Particular Harbour Johnny Clegg Scatterlings of Africa Calamos Investments Calamos Investments on Twitter Calamos Investments on LinkedIn John Calamos Morningstar Tesla Motors Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 3030-OPS-12/1/2021

The world is changing and it's time to change with it. As global debt and inflation rise, how can investors navigate the challenges of the global economy?In today’s episode, Rusty and Robyn talk with Dirk Hofschire, Senior Vice President of Asset Allocation Research at Fidelity Investments.Prior to joining Fidelity, Dirk was a foreign service officer for the U.S. Department of State and a financial economist for the Bureau of Western Hemisphere Affairs. As he traveled the world, he developed an interest in economics.Dirk talks with Rusty and Robyn about the risks of rising global debt, how investors can stay ahead of an unsustainably challenging economy, the business cycle, and other risks to the global economy.Key Takeaways [5:16] - Dirk Hofschire’s role at Fidelity Investments. [6:58] - How multi-time horizon asset allocation works. [8:18] - Why analyzing the business cycle is important. [12:48] - Why debt has ballooned so much around the world in recent years. [18:01] - What investors need to remember when dealing with a highly-indebted world. [26:31] - How professional investment managers view government as a larger part of the global economy. [35:24] - Dirk's perspective on digital assets. Quotes[19:12] - "Diversification is obviously the bread and butter for long-term portfolio building. But over the past 10 or 15 years, it would've been very easy to learn the opposite. If you had owned a US dominant 60-40 portfolio, that’s all you needed. So the diversification in part is against inflation, but it’s actually much broader than that. It's against the sort of extreme events with policy that could mean a much weaker dollar." - Dirk Hofschire[27:54] - "When you think about government regulation and you just think about government policy being more involved in general, I'm not worried that the US is going to become a socialist country by any actual meaning of the term. But what I do worry about is when you sum up all the different things that are happening, all of those things have the potential to seep into reducing corporate profitability, potentially acting as a drag on growth, or potentially being more inflationary, but maybe not. But at the bottom line, it's hard to see how this is positive for profits." - Dirk Hofschire[29:49] - Some of the things like shorter duration on the bond side, or on the stock side, commodities and traditional hedges, as well as some of the things like real assets, real estate and gold, and other types of commodities—those will all still be pretty good inflation hedges. Even if they get expensive, they should still hedge, somewhat, that surprise of potentially even higher inflation or greater inflation that's already priced in." - Dirk HofschireLinks  Dirk Hofschire on LinkedIn Fidelity Fidelity Podcasts John Maynard Keynes  Lords of Finance Mike Duncan Podcast  Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2901-OPS-11/13/2021

In today’s episode, Rusty and Robyn talk with Frank Nickel, Head of Quantitative Strategies and Investments at Brinker Capital.Frank oversees the setup of the investment process that drives direct investing strategies and risk mitigation across various platforms at Brinker. Prior, Frank spent 27 years in various roles at Morgan Stanley—from asset allocation strategist to director of investment strategy to portfolio manager.  Frank talks with Rusty and Robyn about the ins and outs of direct investing, the concept of “searching for alpha”, and the impact of direct investing on the future of investing (especially with ETFs).“We have the ability to give investors a high price momentum, a version of our direct indexing strategies that allow them to have that ‘search for alpha’. I think the way traditional people think about the ‘search for alpha’, it’s at the individual security level. We are not going to really attempt to provide that. Our search for alpha is providing some type of factor exposures that investors believe can outperform.” ~ Frank NickelMain Takeaways  With a direct indexing strategy, you may see bigger returns, compared to a traditional separately managed account. Direct indexing has been on the roll because of tech innovation. From high-net-worth individuals to the mainstream area, firms can manage to bring it to smaller accounts. Direct indexing won't kill ETFs. The only two viable reasons for ETFs to fail are if the government changes taxation, or if technological evolution can lower direct indexing's minimum. Fractional shares trading might be the future with how tech is evolving right now. This can also help to bring the account minimums down. Searching for the alpha involves investing in areas of the market that are projected to outperform. Right now, there's a growing interest in biotech and cybersecurity. Links Frank Nickel on LinkedIn Brinker Capital September by Earth, Wind, and Fire Morgan Stanley Wealth Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2742-OPS-10/27/2021

In today’s episode, Rusty and Robyn talk with Simeon Hyman, Global Investment Strategist at ProShares.From the initial idea of an ETF to product development to the roll-out, Simeon creates—and even customizes—a smooth product strategy to ensure every client and prospect understands the ETF's scope. Prior to creating successful ETFs with ProShares, Simeon held investment leadership roles at Bloomberg Wealth and UBS.Simeon talks with Rusty and Robyn about all things Bitcoin Futures ETF, and the rationale behind its advantage over Bitcoin or other altcoins."Bitcoin’s a volatile thing. Nobody can tell you it’s not. And our ETF, BITO, delivered. That volatility in itself is a ‘feature’ from our perspective, not a bug. There are fewer and fewer things that don’t approach this kind of correlation, so finding something that behaves differently is a very valuable diversifier.” ~ Simeon HymanMain Takeaways  Bitcoin is volatile, but it can be a great inflation hedge and diversifier. Through Bitcoin ETFs you can gain Bitcoin exposure while maintaining a well-performing portfolio over time. The value of a digital asset will greatly differ depending on how a person uses it. For investors, they keep watch on how it will compete in their investment portfolio. For a typical cryptocurrency user, it's just another modicum of exchange. BITO recognizes Bitcoin and other crypto volatility. With the advent of a regulated futures market, it's easy to appropriately place Bitcoin in your portfolio. The cryptocurrency market is unregulated by nature, so there’s no safe and tactical approach on how to invest in Bitcoin and it would be difficult to speculate and diversify with altcoins. Links Simeon Hyman ProShares ProShares Bitcoin Strategy ETF (BITO) Bitcoin Triumph - Magic Power Bloomberg Wealth UBS Lehman Brothers Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2742-OPS-10/27/2021

In today’s episode, Rusty and Robyn talk with Mike Van Wyk, Vice President of Research and Insights for Capital Group.Mike has studied human behavior throughout his two-decade career to better understand what truly drives consumer behavior and business growth. Whether it be packaged goods or financial services, Mike brings game-changing insights to the table. His research helps others skyrocket the growth of their business or their professional career.Mike talks with Rusty and Robyn about the difference between a “sage” and “caregiver” advisor and the three success factors of existing high-growth firms."Every financial professional has to have a side that's more quant-focused and can talk the numbers, but you also have to be able to connect emotionally with your clients and be there as a support for them. Those who are most successful are those who understand there's an aspect of being a sage that they need to bring to the job daily, and there's an aspect of being a caregiver that needs to be present there as well.” ~ Mike Van WykMain Takeaways  Three success factors of the highest growth firms are the always-on acquisition factor, relationship alpha, and strategic skills. All habits, behaviors, and practices during client engagement should be refined to achieve high performance and increase revenues. Spend more time on high-value business activities. Advisors easily get distracted with small tasks, when they should be spending their time on growth creation. Advisors need help, too. It's best to tap into resources about advisor-client engagement that are backed by robust data. There are two types of advisors: the ‘sages’ who like numbers and the ‘caregivers’ who like helping people. An effective advisor has to find a balance between these two. Links Mike Van Wyk on LinkedIn Capital Group PracticeLab Coca-Cola Walmart Proctor and Gamble Capital System Pathways to Growth: Advisor Benchmarking Study Noise: A Flaw in Human Judgment by Daniel Kahneman What Retirees Want: A Holistic View of Life’s Third Age by Ken Dychtwald Hidden Brain Podcast Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2731-OPS-10/25/2021

In today’s episode, Rusty and Robyn talk with Maria Quinn, national spokesperson and thought leadership ambassador at Vanguard.Maria provides her expertise in Vanguard’s largest business line by working externally with financial advisors and intermediaries. Before starting her journey with the firm, Maria was involved with non-profit organizations that provide marginalized people with access to education. Maria talks with Rusty and Robyn about what causes the behavior gap in investing, how human psychology and behavior affect financial success, and how we can use the Advisor Alpha model and the “Three P’s” framework to foster long-term relationships with clients."The way we think about planning is having those deep conversations with clients that require a lot of trust. We define their values (what is of greatest importance to them). And then, we find a way to translate them into a goal.” ~ Maria QuinnMain Takeaways  With the help of an advisor, a client's chance of achieving financial success is significantly higher. In addition, according to Advisor's Alpha, there are seven key areas improved through best practices, which increases your value up to three percent. Behavioral coaching practices should focus on investment management and wealth management to help improve client retention. Every investment outcome is heavily driven by psychology and human behavior. Factors like overconfidence, recency bias, and over-competence should be avoided if you want rational and perfectly timed decisions. Providing a financial plan is foundational. Use the “Three P’s” framework as a guide. Plan thoughtfully, be proactive, and imbibe positivity. Global equity investing has the following benefits: diversification in the portfolio, mitigation of some potential volatility, and increase in portfolio exposure. Links Maria Quinn on LinkedIn Vanguard George Washington University Good News: There’s a Labor Shortage. By David Autor | New York Times Nessun Dorma by Luciano Pavarotti John Bogle Teach for America Bain & Company Deloitte 2021 Value of an Advisor Study | Russell Investments Alpha, Beta, and Now...Gamma | Morningstar The Value of Gamma-Efficient Portfolio | Morningstar The Essential Advisor: Building Value in the Investor-Advisor Relationship by Bill Crager and Jay Hummel 2021 Quantitative Analysis of Investor Behavior - Variable Annuities ("QAIB-VA") ‘Mind The Gap’ | Morningstar Richard Thaler Putting a value on your value: Quantifying Advisor's Alpha JP Morgan Twitter Financial Times The Economist The Wall Street Journal TheNew York Times Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2651-OPS-10/13/2021

In today’s episode, Rusty and Robyn talk with Carl Kaufman, Co-CEO, Co-President, and Managing Director of Fixed Income at Osterwise Management in San Francisco.Before it was the norm, Carl was designing flexible fixed income strategies for his firm’s clients. His decades of industry experience built the trust necessary to switch to the brokerage industry and start work on some game-changing advancements.Carl talks with Rusty and Robyn about the difference between investment-grade and high-yield bonds, the post-pandemic state of the US market, and inflation projections. "Try to keep perspective. Ask yourself what is really important. And, don’t forget to look into the real world because sometimes you get so caught up in the Wall Street hype and you forget what the real world is. I learned this lesson very early on unfortunately in the crash of ‘87." ~Carl KaufmanMain Takeaways  Be flexible enough to tap into investment grades to get better downside protection. You can achieve better results with high-yield bonds if you deploy the right strategy. As long as the economy remains strong and interest rates remain low, companies that have leverage will still do better. A three to five percent rate of inflation is normal, but it will take time for the market to achieve that target.  Be willing to take lower yields for a period of time. Be patient and stay defensive as there will always be corrections.  The dollar will remain the world reserve currency. As long as the world continues to rely on the US Treasury, dollars stay in a safe position. Links Carl Kaufman on LinkedIn Osterweis Capital Management Gilbert and Sullivan’s I Am the Very Model of a Modern Major-General Robertson Stephens Merrill Lynch NYU Stern School of Business Harvard University Department of Music A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel Jeremy Siegel FIMA Repo Facility New York Times FT Bloomberg NewCo Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts

In today’s episode, we’re sharing Rusty’s recent live interview with Jeremy Siegel from Orion’s Ascent conference. Jeremy Siegel is a professor of finance at the Wharton School of Business and a Senior Investment Strategy Advisor at WisdomTree Asset Management.Jeremy’s opinion on the economy and the financial markets has long been trusted and sought after by Wall Street firms because of his decisive and evidence-based approach. His view on inflation is notable and provides valuable insight into the markets from someone who’s been in the industry for a long time. Jeremy talks with Rusty and Robyn about the benefits of value and global investing, the future of stocks and bonds, and insights regarding the future of the US market after an inflation run."Volatility is a mark of equities and all speculative markets, so we're not going to be immune to it. But right now, when I look at relative valuations, they still argue in the direction of stocks over bonds." ~Jeremy SiegelMain Takeaways  The markets aren’t all doom and gloom. When the inflationary run is over, we'll be enjoying inflation rates as low as four to seven percent—rates that are still lower than those we had in the 1970s. Value stocks are projected to outperform other asset classes over the next 12 months. When the market is experiencing moderate inflation, choose stocks over bonds. Bonds with stabilized yields do not necessarily mean they are good investments. As long as inflation goes up, bonds are just depreciating assets. If you do invest in bonds, corporate bonds will fare better than noncallable bonds and long-term treasuries. Advisors need to do two things: manage expectations and prepare investors for volatility. Investors get easily swayed by the doomsayers, but advisors must give them the long-term perspective, the history of the market, and help them stick with their plan. Crypto assets aren't serious competitors to the dollar in terms of being an efficient transaction scheme. However, they present promising tech to innovate fund transfer operations. Links Jeremy Siegel Wharton School of Business University of Pennsylvania WisdomTree Investments Orion Ascent Conference I Might Be Wrong by Radiohead Foo Fighters Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel Federal Reserve Sirius Radio Behind the Markets Podcast WisdomTree Podcasts Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2469-OPS-9/17/2021

In today’s episode, Rusty and Robyn talk with Suzanne Daly, Vice President of Model Portfolios at Fidelity Investments. After working with brokers, dealers, RIAs, and multi-family offices at Fidelity for more than 18 years, Suzanne now oversees the managed account model portfolios and managed accounts distribution efforts. Together with her team, she helps firms optimize their tech stacks, assembling efficient workflows, and outsource investment management.Suzanne talks with Rusty and Robyn about the framework for holistic wealth planning, the criteria for outsourcing investment management, and the generational differences and challenges in the advising workplace."A financial plan is the map of how individuals get from point A to point B. But there couldn't be a more personalized journey. Your point A looks a lot different than my point A, and my point B may look a lot different than your point B. So the beauty of what an advisor has to do is chart that course for the client." ~ Suzanne DalyMain Takeaways  Gen Z investors have changed the pace of advisor-client relationships. Baby Boomer investors put a lot of value in portfolio construction management, research, and due diligence whereas Gen Zs are considering the non-financial aspects of their assets (i.e. digital presence).  The three key principles of holistic financial planning include continuous engagement, creating comfortable and personable experiences, and comprehensive services. Outsourcing to third-party investment managers can help you save time, especially if they are experts in portfolio construction. Segmentation drives personalization across portfolios. It also ensures high performance and strong ties with every client. Advisors with high emotional intelligence (EQ), listening skills and empathy, are the ones who build and maintain lasting relationships with their clients. Links Suzanne Daly on LinkedIn Fidelity Investments Walking on Sunshine by Katrina & The Waves Sustainable Investing for Advisors: Having Better Conversations with Clients (White Paper) Investment Management Support for Advisors: Using Outside Resources (White Paper) Pathways to Success for Emerging Advisors (White Paper) Delivering Value to Gen XYZ Clients (White Paper) Peloton Netflix Kitces and Carl Podcast Craig Iskowitz William Trout FinPoint Podcast Jordan Burgess Dirk Hofschire The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics by Daniel James Brown Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2427-OAS-9/8/2021

In today’s episode, Rusty and Robyn talk with Glenn Dorsey, head of client portfolio management at Clark Capital Management Group.By the time he was 10, Glenn already had a deep fascination with the market and was trading stocks. In college, he double-majored in accounting and finance and got his CFA and CAIA designations. Glenn has been offering his expertise in portfolio management to well-known firms for more than three decades, putting Clark Capital’s client advisor service on an explosive growth trajectory.Glenn talks with Rusty and Robyn about the impact of COVID resurgence and the effects of inflation and government debt on investment decisions."It’s like an analogy for turbulence. Would it be surprising if you need to put your seatbelt on for a little bit? No, not really. Is it something that we need to make major changes in the portfolio for? No, not really. Let's just be aware that all of the flights won't be 100 percent smooth all the time." ~ Glenn DorseyMain Takeaways  Communication is the key to achieving high performance in an investment firm. Partners and financial advisors need to rally around the goal of delivering excellent results for clients. Advisors need to be observant of national and local pandemic mandates. The unknown nature of the pandemic makes open communication and ongoing education even more important.  Regardless of the inflation measure you’re looking at, it’s better to be invested and actively managing your portfolio than to hold back.  Most portfolios are balanced between areas that benefit from an economic reopening and those that benefit from work-from-home culture. Links Glenn Dorsey on LinkedIn Clark Capital Management Group The Only Way I Know by Jason Aldean Mitchell Hutchins Paine Webber FICO Federal Reserve Bitcoin Danny Meyer Psychology of Money by Morgan Housel Setting the Table by Danny Meyer Finding Mastery Podcast The Tim Ferriss Show Connect with our hosts Rusty Vanneman Robyn Murray Subscribe and stay in touch Apple Podcasts Spotify Google Podcasts 2368-OAS-8/24/2021