Hightower Podcast: Collective Wisdom

With the trade and tariff battles between the United States and China showing no signs of abating and threatening to continue well into 2020 and the election year, Collective Wisdom today revisits a recent chat between Joseph Klein of HighTower's investment strategy team and Jake Falcon of Falcon Wealth Advisors in which they talk about how trade concerns translate to what they are doing -- and not doing -- and planning for client portfolios now and until political tensions are resolved.

David Bahnsen of The Bahnsen Group discusses the intersection of politics and personal finance, noting that investors may not want to talk politics but they need to factor current events and the political climate into their investment choices. Bahnsen notes that  investors can create portfolio problems when they choose to invest based more on their political leanings than on a dispassionate view of how current events can and will impact the market, but he noted that trying to ignore politics altogether while investing can be costly in its own ways.

Mike PeQueen of HighTower Las Vegas said that investors are facing a melt-up situation, with the stock market drifting upwards despite bad-news headlines. He noted that whenever the market is showing mixed signals, the bad ones get more media coverage, so he pointed out the market's tailwinds of strong jobs reports, low unemployment, record-low mortgage rates and reasonable gas prices as reasons why there is not likely to be a recession 'now or in 2020.' He did acknowledge that the negative indicators are worth heeding, but noted that investors must 'muddle through' the noise to achieve the market's potential.

Matt Harris, head of investment strategy at HighTower Wealth Management, says that there is a variance between how people are feeling due to economic, market and political headlines and how they are acting, which shows up in the price actions measured by technical analysis. Harris says that indicators like breadth, the spread of companies rising and falling and more are not typical of a market top or indicating a price drop over the next few months.

Richard Flahive, private wealth advisor at Hightower Westchester, and Ray Baraldi, senior financial advisor with Sarian Strategic Partners discuss the role that real assets plan in a portfolio during volatile market times in this rebroadcast of a discussion from last summer.

Richard Sapertein, chief investment officer, Treasury Partners -- a HighTower advisory firm -- gave Collective Wisdom host Chuck Jaffe a surprising take on how bond investors should act in the face of negative interest rates on international treasury securities and falling interest rates at home. Saperstein said that as the negative global rate environment 'marches onto U.S. shores,' investors should actually extend maturities on the fixed-income instruments they are using, even though that could put them on the short end of the inverted yield curve. Saperstein explains that and more in this bonus Collective Wisdom podcast.  

In this re-broadcast of a discussion from earlier this year, Michael Sheldon of RDM Financial Group and Peter Lang from Hightower Westchester discuss the ways that investors can celebrate and make use of the differences between active and passive investments and the role that both can play in building a diversified portfolio.

Jake Falcon of Falcon Wealth Advisors and Joseph Klein, senior investment analyst with the investment strategy team at HighTower Advisors, both expect to see sector rotation from the market during the fourth quarter of 2019, as investors continue to see a bond market and stock market that are sending different messages, with the bond market forecasting a recession while the stock market hints that the long rally can continue. Both Falcon and Klein expect that the rally can continue, but said they anticipate changes as to the sectors and investment types that are driving future increases.

Following up last week;s discussion of the trade war and tariff concerns between the United States and China, Joseph Klein, senior investment analyst with HighTower's investment strategy team, and Jake Falcon of Falcon Wealth Advisors, discussed their big concerns for the market, noting that the nation's evolving health-care coverage concerns lead the way. Klein said the downside risk in the biotech, pharmaceutical and managed-care industries has him leaning towards health-care technology and equipment stocks in a situation that could extend through next year's election. Falcon, also concerned with health care, noted that he has concern over technology stocks entangled in privacy issues, but also noted that he's turning a common concern -- reduced income from falling interest rates -- into a positive by diversifying and changing income portfolios now.

Jake Falcon of Falcon Wealth Advisors and Joseph Klein of HighTower's investment strategy team discussed how the ongoing trade war with China is impacting the way they position client portfolios, with both noting that there is the potential for the tariff battle to rage on well into the election year if China is determined to keep it going. Klein noted that investors have been 'head-faked' by news and tweets about the situation and need to wait until they see a real deal on the horizon to expect the market to move past it.

Ask advisers about 'alternative investments' and you will get a wide range of answers. Alternatives can be a simple way to say you are investing in something beyond stocks, bonds and cash, or it can mean you are buying into complex assets designed to provide returns no matter the market conditions. In this rebroadcast of a recent Collective Wisdom segment, Steve Tresnan of Tresnan Ferst Wealth Advisors, and Jeremiah Riethmiller of Sarian Strategic Partners discuss their personal -- and wildly different -- approaches to using alternatives in a portfolio.

Richard Flahive of HigTower Westchester and Ray Baraldi of Sarian Strategic Partners stressed in Collective Wwsdom that figuring out how to make savings last a lifetime takes more than picking the right retirement date. It requires appropriate timing on when to take Social Security, proper calculations of your future needs andyour budget and more.

Ray Baraldi of Sarian Strategic partners and Richard Flahive of HighTower Westchester discussed the 'accumulation phase' of every saver/investor's lifetime and how gathering, gaining and controlling assets is better and easier with a defined process, rather than some vague make-as-much-as-you-can idea. Baraldi noted that planning helps to eliminate stress and uncertainty that makes investors uncomfortable; Flahive added that planning -- especially for items that most investors overlook, such as taxes -- helps to maximize accumulation opportunities.    

Richard Flahive of HighTower Westchester and Ray Baraldi of Sarian Strategic Partners discuss the merits of real assets -- precious metals, real estate, commodities and more -- in a portfolio and how they use real assets as a diversifier, both based on current market conditions and on long-term portfolio goals.

Jimmy Hausberg of The Hausberg Group and Michael Policar of HighTower Bellevue discussed the non-traditional ways they use to diversify portfolios and protect clients from volatile markets, with Hausberg discussing newfangled defined-outcome funds while Policar said he favors what he described as 'core private real estate' as a way of creatively allocating assets and reducing market risk.

Michael Policar of HighTower Bellevue and Jimmy Hausberg of The Hausberg Group answer an audience question and walk a nervous investor back from the edge of making a massive asset-allocation change out of fear of the next market downturn, noting instead that other factors -- from income to mortgage status to the actual need to tap investments to longevity -- should drive allocation decisions. The duo noted that the timing is right for reviewing allocation changes -- with a calm market near record highs -- but they warned against letting fear have major influence over long-term plans.

Jimmy Hausberg from The Hausberg Group and Michael Policar of HighTower Bellevue discuss the importance of properly assessing risk tolerance and setting appropriate asset allocations, noting that current market conditions -- with the market near highs but not seeing gut-wrenching volatility -- are ideal for making calm, rational decisions. Hausberg noted that few investors he has seen in his career have a good handle on risk and how they really deal with it, while Policar noted that investors who only consider their risk tolerance after a big market move tend to make mistakes when the market hits the bottom of a move or a cycle.

Lauren Pearson of HT Somerset and Jim Ewing of Ewing/Cona Wealth Management acknowledge that financial-advisory technology is changing rapidly, and that while technologies can give clients more and better control of their money, too much tech can create paralysis-by-analysis and other problems. In this rebroadcast of a podcast from January, the two veteran advisers discuss how they integrate fin-tech with their clients.

Cory Bittner of Falcon Wealth Advisors and Peter Lang of HighTower Westchester discussed how financial planning helps clients cross the divide from working and accumulating funds to retirement and living off of investments, and how critical choices made in the early stages of retirement can have life-long consequences, creating a need to careful planning rather than seat-of-the-pants reactions to momentary market conditions.  

Peter Lang of HighTower Westchester and Cory Bittner of Falcon Wealth Advisors discuss the many ways they get into the lives, dreams, hopes and plans of clients in order to make sure that financial planning encompasses more than just the portfolio. In this week's Collective Wisdom discussion, both talked about the tools they use to help clients prepare for and deal with 'life events' as part of their advisory process.