Money Life with Chuck Jaffe

Legendary value manager Bill Nygren, chief investment officer at Harris Oakmark and co-manager of the Oakmark Fund, says "it's a pretty good time for investors, especially those who want to diversify away from the S&P 500 megacap technology risk," but he notes that investors who stick with the biggest stocks will find performance increasingly volatile and homogenous because the growth of the Magnificent Seven stocks has changed the way "large cap" gets defined, cutting the number of stocks that qualify in half over just a few years. "If you're a large-cap growth manager, you're either buying less growth, more mid-cap or you are accepting the fact that your portfolio isn't going to have much active share." Also on the show, Richard Stone, chief executive officer for The Association of Investment Companies discusses the similarities and differences in the closed-end fund industry between the U.S. and England, noting that activist investors have struggled to gain traction and acceptance in British boardroom battles. Plus Chuck discusses a recent conversation with his wife about financial priorities, and how they had very different outlooks on what they would spend money on in living a life where longevity is not guaranteed.

Tom Stringfellow, chief investment strategist at Argent Trust, said on Money Life last May that the market was having "Maalox moments," but the worries and concerns now make it a "Whac-a-Mole market." Despite that, he says the current conditions represent a return to normalcy, a new standard in which valuations may be permanently higher and stock prices keep rising so long as there is growth. As a result, his investment outlook is heavily centered on domestic stocks, which he thinks can deliver double-digit gains in 2025 for the third consecutive year. For his "ETF of the Week," Todd Rosenbluth, head of research at VettaFi, delves into the private credit market, something a growing number of investment analysts have been pushing but which few funds actually tackle. In the Market Call, Elliott Gue, editor of the Energy & Income Advisor, talks about income plays worth making now.

Michael Kelly, portfolio manager and global head of multi-asset for PineBridge Investments, says the market is like Star Trek, "going into a world where no one's been before," seeing new technologies like artificial intelligence become dominant, observing changes in geo-political lines and watching profits continue a trend of being high but going higher as the United States keeps getting stronger relative to the rest of the world. As a result, so long as growth continues, "the markets will come through ... so keep the seatbelt on and enjoy the ride." Author Tim Falconer discusses his new book, “Windfall: Viola MacMillan and Her Notorious Mining Scandal," reviving a tale of stock fraud from the 1960s that feels like a precursor to illegal actions seen in the markets today. Plus Jennifer White discusses J.D. Power research showing what banking and savings consumers are doing trying to get a handle on — and goose the financial performance of — accounts that seem stuck in neutral.

Jeff Rosenkranz fixed income portfolio manager at Shelton Capital Management — manager of the Shelton Tactical Credit Fund — says that what investors are facing more than sticky inflation and interest rates is sticky uncertainty. That doubt has increased volatility, especially in individual companies, industries and sectors as proposed tariffs play out, but that turbulence represents new opportunities for credit buyers, especially in intermediate term corporate and high-yield bonds. David Trainer of New Constructs puts Spotify back in the Danger Zone, noting that a recent pop in the company's stock price has inflated to the point where valuations reflect revenues so unrealistic that a 50 percent haircut in the stock would be considered mild. Plus, Ted Rossman discusses a Bankrate.com study which shows that more than 80 percent of Americans spend money on at least one of six common financial vices (alcohol, lottery tickets, casino games, tobacco/cigarettes/e-cigarettes, sports betting, and marijuana/recreational cannabis), and Scott Davies, chief investment officer at CDAM, talks small-cap stocks in the Market Call.

Jim Welsh, author of “Macro Tides” and the “Weekly Technical Review,” says the technical signals that have been evident since November — with the market making new highs while fewer stocks are advancing — are "a warning sign should a reason to sell appear, and I think we're going to get one of those." Welsh thinks that tariffs and the new administration's determination to use them will likely be that trigger; while he expects the market to make one more high in the short-term, he says that if tariffs have a harmful impact, the market is setting up a 10 to 15 percent pullback in the market later this year. Julia Hermann, global market strategist at New York Life Investments thinks the economy is strong enough to overcome all but an exogenous shock — something at the more severe end of Welsh's spectrum — without a recession, although her outlook remains for "a very bumpy market environment." Jim Baker, president of the Kayne Anderson Energy Infrastructure Fund, says that the energy infrastructure space — which was a huge winner in 2024, with midstream companies up an average of 50 percent — is poised for double-digit gains over the next three to five years, fueled by the power demands of artificial intelligence, data centers and other applications. Plus,Tom Plumb, manager of the Plumb Balanced and Plumb Equity funds, brings his growth-oriented approach to the Market Call.

Whitney Tilson, editor at Stansberry Research, says that while there are reasons to be nervous, the market remains near record-high levels and is not showing signs that it is over-inflated and ready to burst. Tilson notes that fundamentals are strong and the U.S. has the best-performing economy in the world, so investors have correctly priced stocks at rich levels; while that makes it harder for Tilson — a value investor — to find great companies that the market has knocked down or mispriced, it doesn't make the market scary or mean that a big downturn is building. Todd Rosenbluth, head of research at VettaFi, pursues a big yield in an unusual place — the high-flyers of the NASDAQ — with his ETF of the Week, and Cullen Roche, chief investment officer for the Discipline Funds, talks about exchange-traded funds for the long haul in the Market Call.

Tim Urbanowicz, chief investment strategist for the Innovator ETFs, says that the stock market can keep running for as long as investor sentiment remains strong, but he notes that those emotions have been at such high level that there's not much room for a setback — which could be caused by tariffs, inflation and more — without cratering the market. As a result, he thinks investors need to take advantage of current conditions — even if they are nervous — but diligent about changes in the market. Author Ryan Matt Reynolds discusses his current book, "Undoing Urgency: Reclaim Your Time for the Things that Matter Most," and Jerry Sneed, senior wealth advisor at Procyon Partners, makes his debut in the Market Call talking about stock-picking and building a portfolio amid a strong market that's facing storm clouds.

Zach Jonson, senior portfolio manager at Stack Financial Management, says current valuations "really only fall in line with 1929 and 1999, so we see substantial downside risk" to the Standard & Poor's 500, but investors can avoid "historic ber market losses" in the mega-cap stocks that have lead the market for the last two years by rotating toward the value and lagging plays. He recommends equal-weight index plays rather than traditional cap-weighted plays, and being patient with the stocks that were unloved, which will have to overcome the shifting momentum of mega caps as the market cycle changes. His sentiments about a broadening market were seconded by Patrick O’Hare, chief market analyst at Briefing.com, who says that what's coming will be more of a stock-picker's market where investors are paid for being thoughtful and discerning amid a market that's likely to be stuck in a tight range as leadership changes and amid geopolitical uncertainty. Also on the show, Chuck Bell of Consumer Reports discusses how the potential end of the Consumer Financial Protection Bureau will impact consumers, and Chip Lupo discusses a WalletHub study showing that Americans collectively will spend a record $14.2 billion on Valentine’s Day gifts, with the average lovebird shelling out $186 this year.

Economist Howard Yaruss, a professor at New York University and the author of "Understandable Economics," talks about how tariffs work and why increasing the levies now could lead to stagflation — higher prices with a worse economy — depending on how consumers and the Federal Reserve react. Yaruss isn't predicting recession yet, but he does see the economy becoming more sluggish as businesses deal with uncertainty around tariffs. David Trainer, founder and president at New Constructs, has a surprising pick — a Magnificent Seven stock — for The Danger Zone, and Brian Frank, manager of the Frank Value Fund talks absolute-value investing in The Market Call. Plus, Chuck has a heartfelt message near the end of the show that long-time listeners -- and newcomers too -- deserve to hear.

Lauren Saidel-Baker, economist at ITR Economics, says the "green shoots have been forming" among leading economic indicators, showing that growth is ahead for the economy, along with a normalization as the last ripples of the Covid-19 economy are finally playing out. She expects the Federal Reserve to struggle or fail in its efforts to hit a 2 percent inflation target and thinks consumers should get used to higher prices, but even if tariffs add to upward pressure she thinks the economy can avoid a recession. Christian Munafo, chief investment officer at Liberty Street Advisors — manager of the Private Shares Fund — talks about late-stage venture opportunities in artificial intelligence and the hunt for the next unicorn in the overheated AI space. Martin Leclerc, chief investment officer at Barrack Yard Advisors talks stocks in the Market Call, and Chuck discusses his sure bet for the Super Bowl, namely that companies which recently went public that advertise on the broadcast are headed for trouble.