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What do LeBron James, Kim Kardashian and Will Smith have in common? They’re all investors in private equity. But to invest in PE, do you need to be a gazillionaire, or a celebrity… or both? Today, Nicole explains what PE is, and who can benefit from PE returns.

Today, you’re going to get tips on investing, building generational wealth, teaching kids about financial literacy and applying for grants— and you’re going to hear this advice from three stellar recipients of the Nasdaq Foundation's Quarterly Grant Program. But first, Nicole sits down with Jailan Griffiths, the Global Head of Purpose for Nasdaq, to talk about the work Nasdaq is doing to further financial literacy, and the voice all companies should be listening to when shaping their mission (spoiler alert: it's their employees!). Read more about Nasdaq’s purpose-driven work, including the grant program, here: https://www.nasdaq.com/nasdaq-foundation  Check out the report Jailin mentions around their New Investor Initiative called Transforming Investor Identity, here: https://www.nasdaq.com/new-investor-initiative. Learn more about Judy Herbst & Savvy Ladies here: https://www.savvyladies.org/ Learn more about Sarah Dieleman Perry & Neighborhood Allies here: https://neighborhoodallies.org/  Learn more about Gayle Villani & GO Project here: https://www.goprojectnyc.org/

Have you ever wanted to be the bank? With peer to peer lending, you can. Nicole explains how this works— and why this make be a good fit for you if you're looking for a loan at competitive rates.

As you may have seen, Apple just announced new AI features that set the internet on fire. But these updates have geopolitical and macroeconomic implications that could shake up the stock market— and not necessarily in a good way. Nicole explains what's at stake, and who's mad.

Originally aired April 19, 2022. Money Rehabbers want to know: can you negotiate your rent after signing a lease? Be a fly on the wall as Nicole negotiates her rent with her landlord! Can Nicole get a better deal? You’ll have to tune in to find out!

Tesla shareholders voted in favor of Musk receiving the historic $47 billion compensation package. Nicole's take? He deserves it. She explains.

Money Rehabber Ela gets overwhelmed by guilt and anxiety whenever she asks clients for her project rate. That ends today! Nicole invites Ela on for a Listener Intervention that will help her get what she deserves once and for all. Originally aired Sept 15, 2021.

Today's listener did the thing: he turned his hobby into a jobby, and is selling his art. Now he wants to know... how much should he sell it for? Nicole jumps in with a tip that will help make it rain. Originally aired 12.24.21

You might think that Brendan Rooney, who had a "normal" middle-class childhood, enlisted in the Marines, and then went to Columbia University would have very little in common with Christy Carlson Romano, former Disney Channel child star who, in her words, made— and lost— millions of dollars. And yet, the married couple say their childhoods were not that different when it came to the hard financial lessons. Nicole sits down with Christy and Brendan, who run the podcast network Podco, and talk about what it's like being business partners with your romantic partner. Then, Christy talks about her financial journey after rocketing to superstardom so young, and how she made— and lost millions. We talk about when spending can turn into a form of self-harm, and her advice to anyone looking to build a healthier relationship with money. To watch Christy's YouTube video "How I Lost All My Money," click here. Learn more about Brendan and Christy's podcast network here.

Some retirement options (like 401ks) can only be funded with contributions from income. So where does that leave full-time parents and homemakers? Luckily, there is a solution. Nicole breaks down the retirement option every spouse not earning income needs to know, and even how to include it in a prenup.

The downfall of Silicon Valley Bank, or SVB, marks the biggest failure in the banking system since 2008. Here's what happened, why, and what’s to come.

Stories of historically atypical interest rate hikes, and multiple bank failures, concerned many advisors in the early days of 2023. Join us for the second (and final) part of our discussion with Casey Dylan, CIMA®, Consultant, and the host of Unfiltered Finance, Tom Romano, Head of Strategic Relationships, as we discuss some of the more prominent news events, and their effects, during Q1 of this year.

If you have any questions or would like more information, reach out to us at https://symmetrypartners.com/contact-us/

You can also find us on Facebook, YouTube, Twitter, and LinkedIn. As always, we remain invested in your goals.

Transcript:

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Let's let's

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shift a little bit to some of the headlines that we saw because there was

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there's quite a bit. It felt like it was a very long quarter. Yeah, and you

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know as we did see some positive results, but can we

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talk a little bit about just in general some of the headlines that we saw and

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then specifically I want to take a dive into inflation

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and then the banks because that was

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a really big headline. We got a lot of a lot of calls regarding that look

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there there were

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Striking headlines around things like

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shocks to sort of economic surprises on

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job numbers to what was going on with the FED

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to Banks not just near the United States but

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internationally and yet what you see is kind

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of, you know markets do what they do in in any given day. They respond

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to that but they are quick to incorporate the news

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and get back to pricing on other kinds of things. And

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so I would say as a micro dosage of

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what the ride is for investors. It's

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this it's if you can sort of

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take in stride that there are going to be lots of headlines and

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that there may be short-term Market reactions headlines over the

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longer term that kind of gets filtered out on

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the upside and downside right and what you get back

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to is. Hey one of my paying for right I'm paying for some kind

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of future earnings or I'm lending with some expectation that

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I'm going to get paid and income stream based on that and that tends

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to drown out the short term noise and now

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you're back to factors of how much did I pay did I

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get my earnings did I not is

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We're upside to that right and markets are kind of a weighing machine

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in that sense. Right? They're weighing those earnings. They're weighing those

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cash flows in the future. Right? So I would say

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lots of lots of news lots of scurrying

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around the news.

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You know at the end of the day we're sort of where we started one

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of the headlines and one of the things that we've been getting a lot

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of questions about I'm talking about is is inflation. I know we've spent some time

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already today talking about that. We did

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see US inflation ease a little bit but there

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might be some pressures coming up. So if you don't mind commenting on that, that

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would be great. Yeah, you bet. I think it's helpful to kind of

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take a step back and look at

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With the onset of the pandemic right everything kind

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of shut down and then when we went to reopen things back up

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factories didn't necessarily open up, especially in

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places like China right for some time. Right and the the

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supply chain was suddenly

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constrained and so we

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had a hard time getting Goods, right but there was a lot

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of demand because we were at home, you know person stuff and so

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as you have demand shoot up but supplies constrained

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price shoots up, right? That's just sort of Economics 101

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and we saw that and at the time, you know, the Fed was quick

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to say, hey, look we think this is transitory think eventually things

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settle down we get manufacturing back online. We work

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out the bugaboos associated with the supply chain

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and those the price pressure doesn't inflationary pressure should come back

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down over time and in large respect

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this seems to have proven that out right?

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I think what really got the fed's

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attention and started them down the path.

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Of really dramatically raising rates was

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the fact that well while goods were

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sort of starting to come back down. It was

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inflation associated with services that was going up. And

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in fact, what we've seen is good coming down

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the the overall inflation of

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the CPI number or that PC number coming down from its

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highs last summer, but while that's been happening underneath

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Inflation associated with Services has continued to

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go up.

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And so even if we're at a point now where the latest inflationary readings

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are half of what they were.

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Just a year ago this time.

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Services inflation is up and continuing to go the wrong direction. Right? And

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so the the FED has said hey, look

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first of all, we don't look at kind of the overall CPI number. We don't

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that's not how we measure it. We're looking at these underlying statuents and

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they prefer the the pce as

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opposed to CPI, but they're all just kind of ways of measuring, you know

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inflation in the economy. And so

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one of the ways that we've looked at

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this for a very long time is core CPI, right? We're stripping out the

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volatility of energy and food because those tend to move around so much and then

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you know, we've been introduced to this concept that not

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only is it core CPI, but it's core Goods CPI and

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course Services CPI. And so the FED now is very focused

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on core Services looking at Services minus

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services for energy and food and what

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we see are again our sort of troubling Trends

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around services and housing

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in terms of the impact that that

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has now pushing.

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Up or holding up those inflation numbers and if they

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continue on the wrong direction, that's what the fed's concern about and the

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the whammy that potentially comes

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from if Services costs go

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up at some point that starts to impact Goods costs as

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well. Right? And so if you look at this where the the white

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bars are coming down, right the the concern

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is that Services cost the cost of producing goods

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and delivering them right is going to impact the the cost

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that gets passed through and goods start to come back up and there's sort

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of a double double impact of inflation if

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you will and that's what I think the FED is incredibly concerned about

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and and why they say look we're gonna ratchet rates up

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and we're gonna keep them up there long enough until we're convinced that we've we've

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stamped this out and brought it back down to a level that's

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livable because the last thing you want to do is take your foot off the pedal.

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And then suddenly have a Resurgence of these

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inflation Air Forces which that we've saw

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in the 70s, right if you think about what we've we've

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seen this show before the early 70s the FED raising

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rates taking their their foot off the brake, I guess and then

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Resurgence of inflation in the late 70s stagflationary

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environment and it took the volcker FED in the 80s

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taken rates to places. We'd never seen until recently right to

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to stamp that out. And so I think the FED

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is taking a lesson from history and said we don't want to repeat those mistakes.

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We're gonna stay on this until we're sure right absolutely and

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speaking of the fed and it says been a very fast pace

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in terms of Ray hikes. Yeah

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historically exactly exactly so

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they they have meant business and I

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think Market participants repeatedly made

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the mistake of not taking

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the FED at its word.

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Right and and equities markets have

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definitely gotten well ahead of the FED particularly at

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the end of last year and maybe potentially the beginning of this year bond markets

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now are pricing that the FED

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will pull back and yet the FED is saying no. No, we're we're

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gonna raise rates and we're gonna keep them there longer and that's

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you know, we have no expectation that we would

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pull back from that anytime this year. Right? So the market

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participants are our forward looking forward pricing, but

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they seem to not be taking the FED at its word. I think that's pulled

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back a little bit in February and March we started to

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see Market participants kind of get their arms around.

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Actually be coming and we see you know

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investors like hedge funds really sort of looking at volatility

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Bets with the expectation that hey this

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may get a little more turbulent before it gets better. Right? So

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there's a lot of sort of now Market positioning

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for the fed me

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actually do this and we may see an economic pullback,

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but that may not necessarily mean the FED response to

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it. Right? I think again as we look forward the

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the way that I would think about this as an investor as a the

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stock market is not the economy, right? The

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markets are definitely driven by

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interest rates and fed movement

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and yet

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Much like headlines the markets take that

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news and stride it gets built into prices and there

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may be short-term volatility associated with this but if you look out over

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time, you know, what what do we see going back to

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you know, as long as we have records 1926 and Beyond

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right Imperial heads when interest rates

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go up interest rates go down inflationary environments disinflationary environments

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recessionary environments across all of those things markets

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tend to produce a return

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of you know, seven to ten percent average annual

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you don't get that every year but you get on average over time and it's

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paying you for those cash flows so much like,

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you know, the all the comments that we've had prior to

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this.

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As investors, it's important to sort of take in its Stride

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Right put some blinders on there may be volatility associated with

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this ride. You will get wet on this ride. Right but we

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promise you'll come out in the other side, right and when you do,

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you know, the markets will get back to doing what they

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do, which is you know, paying you for putting Capital to work

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in there. So so that I would say again we watch these

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things. We we sort of especially working

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in the industry. It's a incumbent upon

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us to have some product prognostication about where this could

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be headed at the end of the day what we think matters very little it's

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what actually happens and we build portfolios to

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be as robust as we can because Anything Could Happen. Yeah, that's that's fantastic.

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And that's a really good way of putting it. We don't know what's

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happening, but we're

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We're invested in a way to endure what's to come? Right? Exactly. So

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one of the headlines that we we spent

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a lot of time talking to advisors and investors alike is the

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the notion of the banks and we saw from Silicon Valley

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and First Republic and a few others.

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I think it's a it's a risk reward story. But I also think

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this is the diversification story there. I'd love to hear your thoughts. Yeah. Well, yes,

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I think

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the the situation with the banks

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has a lot to do with other stuff, right? Yes, the

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the banks were quick to come out and say well this

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is a consequence of how rapidly the FED is

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raised interest rates. And this is potentially impaired the

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asset base of these Banks and there's no question right over the

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course of 2022. You saw the asset base

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drop significantly across banks in

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general because right so, you know first principles,

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what is a bank do they take money in when they

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take that money in as a deposit? It's a liability to them. Right?

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So they take that liability and they got to go match it up

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with an asset and they do that either by making loans and if

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they can't make enough loans, then they got to go buy bonds treasuries.

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For instance, right? Yes. That's the old against the

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liabilities. So if you if you've got a bank that

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has a bunch of bonds that they're holding as an asset

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and the value of those bonds dramatically drop. They've lost

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a lot of money against the liabilities that

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are still where they are, right and

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So that's that's the the challenge for

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the financial.

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sector and it no surprise the financial sector

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was sort of the worst performing sector for the first quarter in large

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part because of these Dynamics

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It was a part of what happened at svb. It was a catalyst

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for the bank run that followed but the bank

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run followed because of the unique dynamics of

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svb, correct? Right and the the failure

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of silvergate was

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function of crypto and had as

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much to do with FTX the failure of FTX, which

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was a Ponzi scheme, right? So you have

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a lot of kind of very unique situations Signature Bank,

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very crypto focused right First Republic the

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very very heavily on

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the asset side writing interest only mortgages

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right in to a degree that other

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Banks didn't have some unique characteristics of these Banks which cause

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them to be sort of the canary in the coal mine if you will right

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and Credit Suisse just

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Has struggled for years, right? And this was

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just the nail in the coffin form. The concern is are they

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the canary in the coal mine or are they just being punished because

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the malfeasance and poor management?

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And I think the answer is a bit of both, right? So the the

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fed and other institutions got

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together and said, hey, we got a backstop this thing to keep any contagion

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from spreading and assure depositors that

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they're deposits are safe, even if the value of the bond the assets

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that these banks are holding have dropped down. We the the government

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are going to step in and and backstop not just

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your 250,000 but everything right that was

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the strong message that they sent and that sort of seem to

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work, right it calm markets. Thanks for still being sort of reviewed and

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I would say look there's there could be more to this story. There could be

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other shoes to drop in time. Right? So you'll continue

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to watch it. I think as in as a person

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who has money at a bank, right am I rushing to pull my money

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out? No, I'm fairly confident that you know,

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we're we're gonna survive this right now.

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Did I say the same thing in 2008 when when I

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really thought hey, man, the whole financial system could go down.

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These Banks had collapse in Mass. I don't think we're anywhere

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near that I think banks are much healthier than than they

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were then and I think the issues that they have have to do with treasuries and

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the FED has said look, we're gonna step in and provide as much liquidity

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as necessary for the banks. So this becomes

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a potential issue down the down the pike, right? If

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in fact the FED has to step in and provide the

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Surplus liquidity to the treasury market,

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why might they have to do that?

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Well, if for some reason we default on the debt ceiling for instance,

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right that could be very problematic and the FED

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might have to take aggressive steps in a way that we've

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never seen before to step in and try and provide Surplus liquidity

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specifically to the treasury market. That would

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be a complete roll reversal of where we've been right? That's that's

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taking the quantitative tightening off the table and now we're back to quantities, right

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so so could things come down the bike that

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would cause a, you know, real dislocation to

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banking to markets sure it could happen

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again. Who knows right? Everybody's got a crystal

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ball.

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Nobody's usually right spot on about what's gonna happen, but

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it's a potential risk that you want. Hey, look this might happen, but

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we'll survive.

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Yeah, no, absolutely. And as you said before, I mean, it seems like the markets

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have.

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sort of shrugged off those headlines because we've seen some pretty decent returns

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and in q1, but I think you know in

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Let's let's go back to the text docs, right? I mean that's what's really

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leading the charge here, isn't it?

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well

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I think there are a lot of Dynamics at play.

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But underpinning all of that is risk and reward right?

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I mean that at the end of the day, it's that simple

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what are the risks and what are the rewards and how much am I

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willing to pay for those rewards? And am I underestimating those

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risks? Right? So everything is sort of a function of those things

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and so I would say look in equities. The the

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tech stocks is a risk, right? There's there's certainly reward

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there's upside there. We're seeing it in terms of markets, but I think there's risk

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right in fixed income. There's potential

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risk associated with the yield curve

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and what happens with the fed and raising rates in areas,

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like financials. There's risks

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right associated with that. I think the key

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takeaway for that for anybody looking at

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it is

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Broad diversification not just in

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one geography not just inequities not just in fixed income

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across factors as much as you

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can broadly diversify the more robust your portfolio is to

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stand up to any of those unique risks.

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And so I would I would say.

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That that would be where I would encourage investors to

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sort of keep their heads.

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I it's always challenging when you have tech stocks doing

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as well as they are because they drive

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markets you want to be there. You want to participate in it.

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There's a a benefit socially to

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holding names that people are familiar

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with and talk about right if you think about the

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fomo experience that people have

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missing if you're missing out, right? Yeah, my next

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door neighbor. He's he's got Google and apple and they're tear on

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the cover off the ball. Never mind. What happened last year right now, I gotta you

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know, keep up with the Joneses on that water cooler. Alpha

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is what I call that. Yeah water cooler Alpha and I would just

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say hey look at the end of the day. We're people right if we

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were autonomous, you know Vulcans. This would just be

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economics and math and we can figure it all out reality is

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we're people and you got to build a portfolio you can live with right as

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our as our good friend Phil Henry says, you

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got to build a portfolio you can live with and then live with it, right? I think

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that's absolutely true. And so you have to take into account.

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The the investor psychology associated with this that's

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why I think momentum is such a

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powerful factor to build into your portfolios

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because momentum picks up

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these like when tech stocks going to run you end up

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owning things like Apple and Google and because they

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are demonstrating positive momentum, right? So you you're picking

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up some of that you're participating in that upside and I

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think as a as an investor, that's that would probably be enough for

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me, right? It's a modicum of the things that I everybody else

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is holding that that's working but it's also stuff that's not working

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because eventually that circles around and that becomes the thing

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that's worth. I don't have to try and time it. I'm just holding it and I'm

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waiting keeping my powder dry in that area so that when it

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does I benefit that that's how I would think about it look again

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tech stocks are

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The amazing thing about markets is they run longer than you think they should right. They're

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fueled by stuff. Sometimes you don't understand and and

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in many cases, I think the

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tech stock Dynamic is is part

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fairy dust, right and you know,

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we watched it run for a decade and drive markets, you know

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for you know, double digit returns for years because

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that happen again, of course, it could right. I'm not

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gonna tell you again. I am cautious about the

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dynamic being set up looking very similar to

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the dynamic that we saw at you know, 2019 2020.

355
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Yeah. No, absolutely and you know that seems like that tech

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store keeps popping up. I started my career in the late 90s and that was the

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whole story and then I saw a lot of portfolios.

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A lot of people see their portfolios blow up but because of overexposure to

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to technology and they having a

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balanced portfolio Diversified across multiple asset classes regions geographies.

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That's that's the best course of action at the

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end of the day. So yeah, I think I go back to the the E-Trade

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baby, right if you remember the E-Trade baby so easy

364
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baby. Yeah that was born right on the text actually and then

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they they put the baby away for a while baby's back right now. I was

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a little bit older now, he's out of the wedding, you know hanging out

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with this guys and gals but to

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me that a Hallmark of a caution, right because

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the reality is it's it's easy but

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hard right it's not you know, it's not

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difficult to say. Hey look broadly based diversification sit still it's

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incredibly difficult to do. Yeah, right and that's where

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the real benefit of working with financial professionals comes in because everybody

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thinks they can do it everybody. They're gonna be Spock

375
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and devoid of emotion, but then the moment of truth comes

376
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The market drops 40% and you're looking at like am I gonna

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be able to retire? Right and the fear grips hold and it's

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2 am and you're thinking what do I do? Right. That's

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when you need to have that dispassionate third party

380
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to pick up the phone and say I want to sell everything. They whoa. Let's

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revisit right like is anything changed? Oh the

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00:20:10.400 --> 00:20:13.700
market drop 40% right has anything in your life changed right?

383
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Maybe that's not the best course of action. Let's take a beat having that

384
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dispassionate a third party to keep you from blowing yourself up

385
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at that exact moment is invaluable. Yeah

386
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and making sure you have the right mix between stocks bonds

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and maybe even Alternatives depending on the investor and if someone

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can't sleep at night, it's not necessarily that they should take action,

389
00:20:32.600 --> 00:20:35.800
but they might be in the wrong asset allocation for

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their

391
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The risk, you know their ability to accept right? Yeah,

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it could be that often. What I've

393
00:20:45.500 --> 00:20:48.800
experienced is when it's that it's because the client wanted

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more Tech right in their portfolios or more of what's

395
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working, right? And then when that's no longer working, they

396
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can't sleep at night, but cautionary Tale the other

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piece of that is we're surrounded by the news 24/7

398
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right? It's just and it's always the whatever

399
00:21:04.100 --> 00:21:07.700
bleeds leads right? And so it's this constant

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drum beat of kind of negative stuff. And I think that investors

401
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need a voice.

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That that they trust to say. Hey, yeah. No I

403
00:21:17.800 --> 00:21:21.600
saw that too. Yes, that bank went out of business. Here's

404
00:21:20.800 --> 00:21:24.600
why we shouldn't Panic here, right? Yep. We

405
00:21:24.500 --> 00:21:28.300
see all that. Here's why we're gonna stay the course. Here's why we're not gonna Panic. Here's

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what let's you know, our long-term goals are and we're in good

407
00:21:31.100 --> 00:21:35.000
shape to hit those. I think that sort of calming reassurance

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helps people get back to sleeping at night. Yeah. No,

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I agree Casey as always. It's a pleasure talking to you.

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Thanks for joining us great having you here and I want to thank all of

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00:21:43.700 --> 00:21:47.400
our listeners and these feel free to access other podcasts

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00:21:46.800 --> 00:21:49.800
that we have done and they can be

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00:21:49.800 --> 00:21:53.300
accessed anywhere you get your podcast. So thanks everyone and we

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will see you next time symmetry Partners LLC.

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00:21:56.100 --> 00:21:59.600
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Earnings season kicks off with the latest results from JPMorgan Chase, Wells Fargo, and Citigroup. Take-Two Interactive buys Zynga for $12.7 billion. Elastic's CEO moves to the CTO role. Virgin Galactic needs more money. Meta Platforms shuts down its dating service. Domino's makes changes to deal with inflation. Crocs makes a play for the luxury market. Maria Gallagher and Jason Moser analyze those stories, discuss why they're most curious about upcoming results from Pinterest and Etsy, and share two stocks on their radar: Adyen and Nvidia. CFP Malcolm Ethridge analyzes what Federal Reserve Chair Jay Powell said on Capitol Hill this week and why it matters to investors. Plus, he offers a preview of the 2nd season of "The Tech Money Podcast" and shares why he's keeping an eye on real estate, health care, PayPal, and UnitedHealth Group. Looking to get started investing? We’d love to help with a FREE copy of our Investing Starter Kit. Just click over to www.fool.com/StarterKit and we’ll email it to you. Stocks: WFC, C, JPM, TTWO, ZNGA, ESTC, PINS, AMZN, ETSY, SPCE, MTCH, META, DPZ, CROX, PYPL, UNH, NVDA, ADYEY Host: Chris Hill Guests: Maria Gallagher, Jason Moser, Malcolm Ethridge Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

The sudden failure of Silicon Valley Bank in March jostled investors' confidence in the market. But, the overall performance of various tech stocks in Q1, such as Tesla, Meta, Alphabet, Amazon, Salesforce, AMD, and Broadcom, served to revive optimism for the stock market's near future. Join Casey Dylan, CIMA®, Consultant, and our host Tom Romano, Head of Strategic Relationships and Product Development, in this first half of of our Q1 recap, as we discuss both market, and factor performance, in the first few months of 2023.

If you have any questions or would like more information, reach out to us at https://symmetrypartners.com/contact-us/

You can also find us on Facebook, YouTube, Twitter, and LinkedIn. As always, we remain invested in your goals.

 

Transcript:

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00:00:01.900 --> 00:00:07.400
Good afternoon,

1
00:00:07.400 --> 00:00:10.700
 everyone. This is Tom Romano head of strategic relationships at

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00:00:10.700 --> 00:00:14.200
 symmetry partners and joined with me. Today is Casey Dillon

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00:00:13.200 --> 00:00:16.900
 a long time friend of symmetry and our

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00:00:16.900 --> 00:00:19.500
 internal communication strategist. Thank you Casey for

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 joining us today. Tom is excellent to be here with you live in

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 person. Yeah, fantastic. Fantastic So today, we're gonna go

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 through our q1 2023 quarter in

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 perspective. It's been quite the

9
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 interesting quarter to say the least we've had

10
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 some volatile markets. Although

11
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 I'll be at some positive results. We've seen things

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 like banking collapses in the headlines. There's still of

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 course the concerns about inflation. And so

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 Casey thank you for joining us to give us some perspective

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 of what's going on in the market. So in a

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 nutshell what happened in q1 of 2023, yeah

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 in a nutshell, I'll be brief if I

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 can so if you recall

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The fourth quarter of last year, right? The

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 last year was a brutal year across a number of metrics, but

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 the fourth quarter we started to see some respite

22
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 from that and the first two months of the fourth quarter,

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 right? We saw markets actually rebound pretty

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 significantly in October and November and much of

25
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 that was driven by the sense across

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 the markets Market participants that maybe

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 the Fed was done raising interest rates, maybe

28
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 that the inflationary pressures that

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 we had seen in the spring of 2022. We're

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 starting to Abate and the market is

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 a forward-looking forward pricing mechanism. And so

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In the fourth quarter, that's what it did. It looked forward.

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 It started to anticipate a period when the the

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 Fed was not raising interest rates and inflation would be tamed.

35
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 And of course what happened in December was

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 a bit of a comeuppance for

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 those Market participants who got a little bit ahead of

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 the fed and we saw a pullback in

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 December.

40
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And markets responding to the fact that the FED said well, no,

41
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 we're pretty set on continuing to raise rates.

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 And and we think we're gonna keep them higher longer.

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As we rolled into the first quarter of this year. We saw

44
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 a replay of a lot of those Dynamics coming into

45
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 January Market participants

46
00:02:22.300 --> 00:02:24.000
 again. It's sort of

47
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Determined that this was the year the Fed was

48
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 going to stop rate and Market participants started to

49
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 look forward and price as if the not only

50
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 with the FED stop racing rates, but they would start to pull rates

51
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 back by the end of the year given where people

52
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 reading the tea leaves assumed the

53
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 economy would be by mid-year.

54
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And so you saw a really robust Rebound in

55
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 January for a lot of the names that have been

56
00:02:54.200 --> 00:02:57.900
 really beat up in 2022 specifically the

57
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 large cab growth and Tech names and

58
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 so there was something of a reversion to

59
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 the mean in terms of those names really

60
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 leading the charge in January. Those are

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 the names that were most beaten up in 2022. Those are the

62
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 names that snap back fastest in the

63
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 first quarter. And so January where we

64
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 saw for instance the S&P down 20% for

65
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 2022. We saw

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 a Resurgence just in the month of January the SP was up

67
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 like eight percent and the NASDAQ double that right just on the

68
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 strength of kind of those large cap Tech names and of course what happened

69
00:03:34.400 --> 00:03:38.100
 as we rolled into February the news that

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 came out on the sort of

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 economic underpinnings specifically job data for

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 January really surprised Market

73
00:03:46.100 --> 00:03:48.100
 participants because

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It was so robust. So strong it exceeded expectations. It

75
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 served as a really Stark reminder that we're

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 not out of the woods yet.

77
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And and it sent shock waves

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 across the market in the sense that everyone who

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 had said. Okay. Well now the FED is gonna have to wind this down all

80
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 the sudden the the realized maybe not

81
00:04:08.400 --> 00:04:11.400
 right not only is the fed maybe not gonna wind this

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 down because the economy is hotter than we thought it was but we potentially

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 risk sort of a flare-up of inflation

84
00:04:17.600 --> 00:04:20.100
 just as it was coming down and the FED may have

85
00:04:20.100 --> 00:04:23.500
 to get more aggressive in in tackling that and

86
00:04:23.500 --> 00:04:27.000
 so February saw sort of a revisitation of

87
00:04:26.400 --> 00:04:29.500
 those expectations that market participants

88
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 had and as we rolled into March then all

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 eyes were on the Senate

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 hearings with the the chairman

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 of the fed and based on his

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 comments Futures skyrocketed for an expectation

93
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 of a 50 basis point raise at

94
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 the end of March the Futures went up to like a 70% chance that

95
00:04:50.500 --> 00:04:53.300
 the Fed was gonna raise 50 basis points, and

96
00:04:53.300 --> 00:04:55.500
 of course what happened then you know days later.

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Started imploding right and that sort

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 of Royal financial markets and

99
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 the FED did end up raising rates. But

100
00:05:05.200 --> 00:05:08.200
 only by 25 basis points after they had worked to

101
00:05:08.200 --> 00:05:11.200
 sort of rescue. I don't know rescues the

102
00:05:11.200 --> 00:05:15.500
 right term but step in aggressively and calm markets

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 particularly folks who

104
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 had cash on deposited Banks to keep sort

105
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 of a contagion effect and a larger Bank Run taking place.

106
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 Right? So we end the first quarter with a really

107
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 sort of wild trip of markets shooting

108
00:05:29.900 --> 00:05:32.500
 up coming back down a lot of volatility a lot

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 of fear injected in markets in March with the

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 headlines and yet at the end of the quarter you finished up

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 pretty again pretty solidly across

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 us markets International Development markets emerging

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 markets in fixed income inequities, right?

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00:05:47.700 --> 00:05:50.400
 We it was a it was a pretty decent first

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 quarter from a return perspective despite all of that. Yeah sure.

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00:05:53.800 --> 00:05:56.000
 It was like it's a very interesting quarter.

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And I'd like the way you put it on the things the kind of the Resurgence of

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 these tech companies that didn't have a great year last year, but you're

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 seeing asset classes such as the energy

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 sector right who had a great year last year is to

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 use your your term of aversion to the mean right? They had

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 a tough time in the first quarter, right? Yeah. Yeah and and frankly

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 prices have been coming down in oil and gas pretty

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 consistently.

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Since last fall so we did see a continuation of that. I

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 do think and likely there's

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 more conversation to be had

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 around this but the concern that I have or

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 or would have based on

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 how markets performed in the first quarter is that

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 it was so dominated by a

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 handful of names, right? We we've seen

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 this Dynamic before where we're

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 sort of the top largest growth Tech

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 names sort of dominate performance

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 of the market and we and we saw that again in

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 the first quarter right? You think about Facebook alphabet

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 Apple Google Netflix, right?

139
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 All of those firms were

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 really been challenged in 2022 had a

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 nice Resurgence across the first quarter, but when

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 you dig deeper into the performance particularly here domestically what

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 you see is they were the lion

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Care of that return that we saw the market it was once again

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 the fact that these top handful of names represent twenty

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 plus percent of the overall

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 market, right? So think S&P 500 has got ostensibly 500

148
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 names in it the top 10 names

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 accounted for all at

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 least 80% of that return right the

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 top top five names half of it, right? So so

152
00:07:43.300 --> 00:07:46.400
 again, you're getting a lot of that return concentrated in

153
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 these names.

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Because they're so large disproportionately to

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 the other names in those indices

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 and it lit. It's the rising tide lifting

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 all boats, but the concern that you

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 have with that and we saw that in 2022 when the

159
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 air goes out of the balloon to a degree. Well that

160
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 can be a double-edged sword. Right if those names start

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 to pull back in valuations, you

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 could see that turn around and become an anchor pulling

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 markets down, right and that can happen very quickly just based

164
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 on the fact that it's so concentrated in a

165
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 handful of names that are all sort of in the

166
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 same kind of economic Waters right in terms of kind of

167
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 this large growth Tech, you know richly valued.

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 Yeah. It sounds a lot like me, you know, I've

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 had these conversations over the years even going back before 2022

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 coming out of the pandemic

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 and those tech stocks. They were the story they were leading

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 the charge and what I'm hearing you say, is that sort

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 of the casing q1, but that double-ed

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word is just going back 2022 would

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 be an example of if you're not well Diversified

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 that could be a painful experience it can and I'm

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 I'm reminded of

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The experience that we had coming out of the tech bubble,

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 right? So if you think about if in fact

180
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 the run-up invaluations in this sort of handful of

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 techniques is analogous to what we saw in

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 the late 90s.

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They were so richly valued that when the

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 tech Bubble Burst it took a decade the Lost

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 decade right of just you know, subpar returns

186
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 for the valuations to get

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 back to a place where markets could then start

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 to take off again. And so the concern that

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 that one might have is valuations are

190
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 still Rich, right? Even after 2022 on

191
00:09:39.400 --> 00:09:43.200
 a Price to Book basis very

192
00:09:42.200 --> 00:09:45.600
 expensive on a price to

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 forward earnings basis. It's expensive and

194
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 so it's not

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 as if these are our Bargains to

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 be had in a Marketplace that that's discounting

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00:09:57.800 --> 00:10:00.700
 them. They are still incredibly expensive. And so

198
00:10:00.700 --> 00:10:03.400
 anything that goes wrong right if the

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00:10:03.400 --> 00:10:06.300
 if in fact the economy runs into turbulence at

200
00:10:06.300 --> 00:10:09.700
 some point or the expectations for growth, I mean,

201
00:10:09.700 --> 00:10:12.600
 you know, we're in earning season and Netflix had sort

202
00:10:12.600 --> 00:10:14.100
 of positive numbers, but

203
00:10:14.100 --> 00:10:17.700
They sort of gave lackluster guidance for next quarters

204
00:10:17.700 --> 00:10:20.400
 growth. Right? So all you need is for for Market

205
00:10:20.400 --> 00:10:23.400
 participants to to a once again sour on the

206
00:10:23.400 --> 00:10:27.400
 prospects of these names and you're right back to it's

207
00:10:26.400 --> 00:10:29.300
 too too rich like I'm paying

208
00:10:29.300 --> 00:10:32.500
 too much today for for earnings in

209
00:10:32.500 --> 00:10:35.100
 the future that may or may not materialize right? And so

210
00:10:35.100 --> 00:10:38.700
 I've got to pay less and so the price has to come down. Yeah, right. And

211
00:10:38.700 --> 00:10:41.300
 again, I'm not suggesting that we have a lost decade

212
00:10:41.300 --> 00:10:44.200
 in front of us, but this potentially room to run

213
00:10:44.200 --> 00:10:48.300
 if markets turn and I think that's the the concern that

214
00:10:47.300 --> 00:10:50.100
 I would share with investors. That's what I

215
00:10:50.100 --> 00:10:53.500
 prepare them for. Hey, we'll take what we get. Right? We're happy

216
00:10:53.500 --> 00:10:54.700
 to get those returns, but

217
00:10:56.200 --> 00:10:59.500
This could still be valve this this, you know, we're in the third inning potentially

218
00:10:59.500 --> 00:11:02.900
 look or fourth ending. There's a lot of game left and we're

219
00:11:02.900 --> 00:11:05.000
 just gonna buckle up and be ready for it. Yeah, and what is

220
00:11:05.300 --> 00:11:09.200
 interesting what this quarter and you detect upon that I'd love to get your thoughts developed International

221
00:11:08.200 --> 00:11:11.300
 to having a very good quarter.

222
00:11:11.300 --> 00:11:14.400
 I mean when we saw these large Tech

223
00:11:14.400 --> 00:11:17.600
 names and in the past when they had their run prior to 2022, it

224
00:11:17.600 --> 00:11:20.600
 was a pretty much us dominated run up.

225
00:11:21.800 --> 00:11:24.500
Give us some commentary on what we're saying in the developed International

226
00:11:24.500 --> 00:11:27.100
 Space. Yeah, I think some of

227
00:11:27.100 --> 00:11:31.600
 it is the Resurgence of the

228
00:11:32.900 --> 00:11:35.700
strength of the sort

229
00:11:35.700 --> 00:11:38.200
 of the the companies that are there that have

230
00:11:38.200 --> 00:11:42.000
 sort of suffered through a decade of kind of sub-par performance

231
00:11:41.300 --> 00:11:45.400
 and they were in a much stronger financial

232
00:11:44.400 --> 00:11:47.300
 position. Then they

233
00:11:47.300 --> 00:11:51.300
 were for instance going into the global financial crisis, right and they

234
00:11:50.300 --> 00:11:53.700
 weren't super expensive. Right?

235
00:11:53.700 --> 00:11:58.100
 So from a perspective of they were kind of relatively cheaply

236
00:11:56.100 --> 00:11:59.100
 priced compared to

237
00:11:59.100 --> 00:12:02.500
 US stocks. And so if we look at just the performance

238
00:12:02.500 --> 00:12:06.100
 the they don't have to have that much right

239
00:12:05.100 --> 00:12:09.300
 surprise upside.

240
00:12:10.300 --> 00:12:14.300
To have nice performance right across the board or

241
00:12:13.300 --> 00:12:16.200
 relatively decent performs.

242
00:12:16.700 --> 00:12:19.800
So I think people were pleasantly surprised by

243
00:12:19.800 --> 00:12:23.500
 some of the financial resilience in

244
00:12:22.500 --> 00:12:25.200
 Europe particularly coming out of

245
00:12:25.200 --> 00:12:28.900
 the effects of the the Russian Ukraine

246
00:12:28.900 --> 00:12:31.600
 conflict and looking at the impact that

247
00:12:31.600 --> 00:12:34.500
 for instance the the price of gas price

248
00:12:34.500 --> 00:12:37.100
 of oil I had in places like Germany and the fact

249
00:12:37.100 --> 00:12:40.300
 that they sort of got through that not unscathed but

250
00:12:40.300 --> 00:12:43.700
 you know, the the avoided the apocalypse

251
00:12:43.700 --> 00:12:47.000
 right the gasoline apocalypse over the course of the

252
00:12:46.600 --> 00:12:49.300
 winter right that it was relatively mild. So

253
00:12:49.300 --> 00:12:52.600
 I think that from that perspective markets sort

254
00:12:52.600 --> 00:12:55.600
 of said rewarded International developed

255
00:12:55.600 --> 00:12:58.900
 businesses with valuations that

256
00:12:58.900 --> 00:13:01.400
 seemed a little more reasonable than the

257
00:13:01.400 --> 00:13:04.000
 valuations in the US. Yeah, that makes a lot of sense and thank you

258
00:13:04.200 --> 00:13:07.900
 for that. Yeah, and and I would call I would suggest that

259
00:13:07.900 --> 00:13:10.200
 Emerging Markets are in a similar but

260
00:13:10.200 --> 00:13:14.300
 different position right again a little more financially

261
00:13:13.300 --> 00:13:16.300
 robust in terms of the underpinnings.

262
00:13:17.300 --> 00:13:20.100
Of those companies relative to where we've seen Cycles where people

263
00:13:20.100 --> 00:13:23.100
 are risk off and and sort of beating down

264
00:13:23.100 --> 00:13:26.200
 in price. I think anytime you have a lot of volatility people are

265
00:13:26.200 --> 00:13:29.700
 hesitant to take a bunch of risk. So Emerging Markets

266
00:13:29.700 --> 00:13:32.800
 could be a little more volatile as you would expect but

267
00:13:32.800 --> 00:13:35.100
 I think from evaluation standpoint there's room to run

268
00:13:35.100 --> 00:13:38.600
 as well over time relative to the US let's let's

269
00:13:38.600 --> 00:13:41.300
 look at the other side of the coin and talk a

270
00:13:41.300 --> 00:13:44.500
 little bit about bonds because that's been quite the Hot Topic lately. We've been

271
00:13:44.500 --> 00:13:47.900
 getting a lot of inquiries from advisors and investors alike

272
00:13:47.900 --> 00:13:50.700
 about the fixed income market. So give us

273
00:13:50.700 --> 00:13:52.300
 a little perspective of what's happening in.

274
00:13:53.500 --> 00:13:57.300
Global fixed income right? Well, if you recall 2022

275
00:13:56.300 --> 00:13:59.500
 was a historically bad year

276
00:13:59.500 --> 00:14:02.900
 for Boston certainly, right as as fed as

277
00:14:02.900 --> 00:14:05.500
 the FED raised interest rates are not just the FED but central banks

278
00:14:05.500 --> 00:14:08.500
 essentially around the world except for the Asian

279
00:14:08.500 --> 00:14:11.100
 China and Japan those central banks not quite

280
00:14:11.100 --> 00:14:14.600
 as much but globally central banks at the

281
00:14:14.600 --> 00:14:17.600
 impact of course of challenging the yield right

282
00:14:17.600 --> 00:14:20.900
 and as we know yield in price or are sort of inverse Lee

283
00:14:20.900 --> 00:14:23.300
 related and so as yield was pushed up by raising

284
00:14:23.300 --> 00:14:26.900
 rates price came down and and it had a pretty dramatic

285
00:14:26.900 --> 00:14:29.900
 impact across the yield curve

286
00:14:29.900 --> 00:14:32.400
 and that was globally as well the United

287
00:14:32.400 --> 00:14:32.400
 States.

288
00:14:33.200 --> 00:14:36.400
2022 pretty much a very bad. No good year for

289
00:14:36.400 --> 00:14:39.400
 Bond holders rolling into the first quarter

290
00:14:39.400 --> 00:14:42.400
 a lot of those same sort of macro dynamics that

291
00:14:42.400 --> 00:14:45.400
 we talked about with equities was

292
00:14:45.400 --> 00:14:48.500
 true to fix income as well the expectation the bond

293
00:14:48.500 --> 00:14:51.800
 market pricing that they think the FED will essentially

294
00:14:51.800 --> 00:14:54.600
 be done at some point this year raising rates

295
00:14:54.600 --> 00:14:58.100
 had the impact of markets rallying

296
00:14:57.100 --> 00:15:01.300
 to a degree and then of course when there

297
00:15:00.300 --> 00:15:04.100
 was volatility injected because of banking issues

298
00:15:03.100 --> 00:15:07.300
 you continued to see a pullback

299
00:15:06.300 --> 00:15:09.700
 on the the yield

300
00:15:09.700 --> 00:15:13.000
 right? So at at some points we saw for instance

301
00:15:12.200 --> 00:15:15.400
 the the 10 year get up over four and we

302
00:15:15.400 --> 00:15:18.500
 saw a pullback as yields come down then of course prices go

303
00:15:18.500 --> 00:15:21.400
 up. And so you saw a nice robust kind of response over

304
00:15:21.400 --> 00:15:24.500
 the first quarter of prices coming up for bonds that had

305
00:15:24.500 --> 00:15:27.500
 the impact and that was true for treasuries and corporates

306
00:15:27.500 --> 00:15:30.400
 and international bonds, right? So across the

307
00:15:30.400 --> 00:15:32.900
 Spectrum you had sort of a nice performance.

308
00:15:33.300 --> 00:15:37.100
For bonds for the first quarter. And again, it's unusual

309
00:15:36.100 --> 00:15:39.400
 for fixed income and Equity to look and

310
00:15:39.400 --> 00:15:42.100
 behave very similarly. That was one of

311
00:15:42.100 --> 00:15:45.700
 the things that was so unusual about 2022, but there's still

312
00:15:45.700 --> 00:15:48.500
 sort of Behaving the same way based on the same Outlook

313
00:15:48.500 --> 00:15:51.500
 that at some point interest rates stop going up

314
00:15:51.500 --> 00:15:54.500
 or stop getting ratcheted up by central banks.

315
00:15:54.500 --> 00:15:57.100
 And so that Dynamic is is kind of

316
00:15:57.100 --> 00:16:00.700
 floating all the boats to this degree and so

317
00:16:00.700 --> 00:16:03.500
 fixed income has had a robust first quarter.

318
00:16:04.400 --> 00:16:07.700
Remains to be seen how the rest of the year plays

319
00:16:07.700 --> 00:16:10.400
 out and and you know, frankly we

320
00:16:10.400 --> 00:16:13.200
 continued to see the a deep

321
00:16:13.200 --> 00:16:16.200
 inversion in the yield curve, especially at the

322
00:16:16.200 --> 00:16:19.100
 very shortest end of the O curve relative to the

323
00:16:19.100 --> 00:16:22.700
 10 year. And as you know that has historically sort

324
00:16:22.700 --> 00:16:25.300
 of been a warning sign of

325
00:16:25.300 --> 00:16:28.600
 potential economic stress recessions right

326
00:16:28.600 --> 00:16:32.100
 as an indicator and it has remained it

327
00:16:31.100 --> 00:16:34.100
 inverted for some time now

328
00:16:34.100 --> 00:16:37.900
 and that inversion has only gotten deeper on the shortest end. So,

329
00:16:37.900 --> 00:16:40.200
 you know again you would want to continue

330
00:16:40.200 --> 00:16:43.700
 to watch that and be cognizant of it. I think the takeaway

331
00:16:43.700 --> 00:16:46.500
 from this is much like with equities. It's best

332
00:16:46.500 --> 00:16:49.200
 to be sort of broad based Diversified. You never

333
00:16:49.200 --> 00:16:53.000
 know what part of the Yoke curve is gonna move relative to this and

334
00:16:52.900 --> 00:16:56.800
 it's good to have exposure

335
00:16:55.800 --> 00:16:58.600
 not just us treasuries, but

336
00:16:58.600 --> 00:17:01.200
 the corporates and not just us bonds, but the international

337
00:17:01.200 --> 00:17:04.300
 bonds that there are benefits built into the pricing of all

338
00:17:04.900 --> 00:17:08.400
And as we start to see a decoupling of Central

339
00:17:07.400 --> 00:17:10.400
 Bank activity, yes, they've been

340
00:17:10.400 --> 00:17:13.700
 acting pretty much in concert, but at some point central banks

341
00:17:13.700 --> 00:17:16.800
 start to peel off right and they get back to focusing on

342
00:17:16.800 --> 00:17:19.100
 the handling kind of

343
00:17:19.100 --> 00:17:22.300
 their domestic concerns. And as they do that it will

344
00:17:22.300 --> 00:17:25.600
 have varying diversification impacts for bonds

345
00:17:25.600 --> 00:17:28.500
 around the globe the way stocks and bonds behaves

346
00:17:28.500 --> 00:17:31.300
 in 2022 with similar and then into this quarter. We're

347
00:17:31.300 --> 00:17:34.500
 seeing some decent returns globally across those two

348
00:17:34.500 --> 00:17:37.800
 macro asset classes. We're seeing

349
00:17:37.800 --> 00:17:40.300
 some of a mixed bag that last Factor investors

350
00:17:40.300 --> 00:17:43.400
 from a factor perspective, right? But let's

351
00:17:43.400 --> 00:17:46.200
 shift a little bit and talk about factors for a moment.

352
00:17:46.200 --> 00:17:49.300
 We're a factor investors are listeners The Avengers that

353
00:17:49.300 --> 00:17:52.300
 we work with our have clients invested in

354
00:17:52.300 --> 00:17:55.500
 these Factor portfolios. What did we see from a factor standpoint

355
00:17:55.500 --> 00:17:58.800
 in the first quarter of 2023 if

356
00:17:58.800 --> 00:18:01.400
 you think about the factor of value, it's just the the

357
00:18:01.400 --> 00:18:04.300
 cheaper stocks outperform the more expensive stocks over time and as

358
00:18:04.300 --> 00:18:04.500
 you know,

359
00:18:04.800 --> 00:18:07.800
We had a long run where that wasn't true. Right we're

360
00:18:07.800 --> 00:18:10.300
 growth stocks were just outperforming value to the

361
00:18:10.300 --> 00:18:13.200
 point that everybody was sort of Naval gazing wondering his value

362
00:18:13.200 --> 00:18:16.800
 dead. Does this even make sense anymore? And and what

363
00:18:16.800 --> 00:18:19.400
 we sort of looking at it determined was

364
00:18:19.400 --> 00:18:22.400
 no actually values kind of in line with what it's always done. It's

365
00:18:22.400 --> 00:18:25.300
 growth. That's so unusual. Yeah, right and that we're

366
00:18:25.300 --> 00:18:28.300
 back to the story about the large tech stocks and get over evaluation. Right?

367
00:18:28.300 --> 00:18:31.900
 And so last year was a great year for Value, right? Even

368
00:18:31.900 --> 00:18:34.500
 though it was down right value outperform growth

369
00:18:34.500 --> 00:18:37.800
 by a good 20% Oh, yeah, absolutely and it

370
00:18:37.800 --> 00:18:40.700
 was sort of that Snapback to recognition of

371
00:18:40.700 --> 00:18:43.300
 hey one of my paying for right and and these things

372
00:18:43.300 --> 00:18:46.200
 have gotten incredibly overvalued on the

373
00:18:46.200 --> 00:18:46.600
 growth side.

374
00:18:47.300 --> 00:18:50.500
And so it shouldn't come as a surprise then if there's a reversal of

375
00:18:50.500 --> 00:18:53.600
 that Dynamic that value might underperform growth

376
00:18:53.600 --> 00:18:56.500
 over the first quarter. And of course, that's what we observed right

377
00:18:56.500 --> 00:18:59.300
 that value underperformed growth. It was

378
00:18:59.300 --> 00:19:02.300
 those large kind of growthy names that took off and and so that

379
00:19:02.300 --> 00:19:05.700
 that factor shows up and demonstrates

380
00:19:05.700 --> 00:19:08.300
 that thighs right. So again kind of

381
00:19:08.300 --> 00:19:11.600
 the academic research that smaller cap

382
00:19:11.600 --> 00:19:14.400
 names tend to outperform larger cab

383
00:19:14.400 --> 00:19:17.800
 names over time rolling into the first quarter large

384
00:19:17.800 --> 00:19:20.500
 caps outperform small caps, right again being led

385
00:19:20.500 --> 00:19:23.500
 by that large growthy and so small caps

386
00:19:23.500 --> 00:19:26.800
 tended to underperform in general. What's interesting

387
00:19:26.800 --> 00:19:29.300
 is across factor is

388
00:19:29.300 --> 00:19:32.300
 one of the reasons you want to hold small caps isn't necessarily the size

389
00:19:32.300 --> 00:19:35.300
 Factor premium associated with that because

390
00:19:35.300 --> 00:19:38.700
 that's come under some scrutiny of

391
00:19:38.700 --> 00:19:41.400
 Lee as academics kind of look at that. Say what

392
00:19:41.400 --> 00:19:42.200
 do we actually getting here?

393
00:19:42.900 --> 00:19:46.000
But what really expresses itself

394
00:19:45.300 --> 00:19:48.500
 in small camp names or all the other factors, right? So

395
00:19:48.500 --> 00:19:51.100
 the reason you'd want to hold a small cap is not just

396
00:19:51.100 --> 00:19:54.200
 because you get a benefit versus large caps, but because you get

397
00:19:54.200 --> 00:19:57.600
 a really strong value signal a really strong momentum really

398
00:19:57.600 --> 00:20:00.200
 strong quality, right all of these things. And so if we

399
00:20:00.200 --> 00:20:03.300
 look at small caps the performance of small caps for

400
00:20:03.300 --> 00:20:06.700
 the first quarter, you actually got to really strong quality signal

401
00:20:06.700 --> 00:20:09.700
 in small caps. So again a reason

402
00:20:09.700 --> 00:20:12.400
 why you want to have a multiple exposures for your

403
00:20:12.400 --> 00:20:15.400
 factors not just pick any one of these right so small

404
00:20:15.400 --> 00:20:18.400
 caps under form large caps, but quality did really well inside

405
00:20:18.400 --> 00:20:21.300
 small camps that makes up the next category is

406
00:20:21.300 --> 00:20:24.400
 momentum. And what's interesting about markets that are sort of

407
00:20:24.400 --> 00:20:27.500
 whipsawing one way or the other that momentum tends to

408
00:20:27.500 --> 00:20:30.400
 have a tougher time in markets where the signal is really

409
00:20:30.400 --> 00:20:33.100
 hard to pick up where there's a lot of whipsawing effect up and down on the

410
00:20:33.100 --> 00:20:37.000
 other way momentum tends to kind of get whipped around with that.

411
00:20:37.700 --> 00:20:40.200
Eventually when markets start to pick

412
00:20:40.200 --> 00:20:43.300
 up Trend whether that's down for a significant period of

413
00:20:43.300 --> 00:20:46.500
 time like in 2022 momentum does well or up right

414
00:20:46.500 --> 00:20:50.000
 for a significant period of time and so you

415
00:20:49.200 --> 00:20:52.400
 would expect momentum to kind

416
00:20:52.400 --> 00:20:55.400
 of settle down as markets kind of settle down

417
00:20:55.400 --> 00:20:59.600
 and we see less whipsawing and more directionality. However, and

418
00:20:59.600 --> 00:21:03.300
 I mentioned it earlier with small caps quality this idea

419
00:21:02.300 --> 00:21:05.000
 that there may be

420
00:21:05.200 --> 00:21:08.800
 a flight to Quality in times when the

421
00:21:08.800 --> 00:21:11.100
 there's a lot of volatility. Well one of the

422
00:21:11.100 --> 00:21:14.800
 reasons you see that is because higher quality earnings tend to

423
00:21:14.800 --> 00:21:17.400
 hold up better in downturns. They have a premium

424
00:21:17.400 --> 00:21:21.300
 associated with them and we saw that very clearly quality

425
00:21:20.300 --> 00:21:23.200
 was one of the areas that outperformed the market

426
00:21:23.200 --> 00:21:26.200
 over the first quarter and that was true not just in the

427
00:21:26.200 --> 00:21:30.200
 US but internationally as well interestingly in

428
00:21:29.200 --> 00:21:33.500
 Emerging Markets value quality

429
00:21:32.500 --> 00:21:35.600
 and low volatility did quite

430
00:21:35.600 --> 00:21:37.600
 well so value was still doing well in emerging.

431
00:21:37.700 --> 00:21:40.700
Markets again a reason why you'd want to diversify

432
00:21:40.700 --> 00:21:43.400
 your Factor exposures not just in the US but

433
00:21:43.400 --> 00:21:46.900
 internationally as well and minimum volatility was

434
00:21:46.900 --> 00:21:49.800
 a contributor in us but lagged Market

435
00:21:49.800 --> 00:21:52.500
 beta on the whole a broadly

436
00:21:52.500 --> 00:21:55.900
 Diversified Factor exposure was I'd

437
00:21:55.900 --> 00:21:58.700
 say depending on what your tilts are helpful on

438
00:21:58.700 --> 00:22:02.200
 the downside when Market was volatile, but lagged

439
00:22:01.200 --> 00:22:04.900
 Market beta to a degree for the

440
00:22:04.900 --> 00:22:07.500
 first quarter where it outperformed in

441
00:22:07.500 --> 00:22:10.400
 2022. So again factors are a

442
00:22:10.400 --> 00:22:13.500
 long term investment. You wouldn't do it on based

443
00:22:13.500 --> 00:22:16.700
 on one quarter, but we we watch the horse race, right? Yeah.

444
00:22:16.700 --> 00:22:19.200
 Absolutely and I think a point that you

445
00:22:19.200 --> 00:22:22.400
 you said that really resonated with me is the notion of how these factors work

446
00:22:22.400 --> 00:22:25.800
 together right size and quality you mentioned

447
00:22:25.800 --> 00:22:29.200
 and so having a diverse portfolio

448
00:22:28.200 --> 00:22:30.700
 of integrated factors.

449
00:22:31.500 --> 00:22:32.800
maintaining that for the long term

450
00:22:34.200 --> 00:22:37.400
Should reward you over the long term. Yeah, and that's the

451
00:22:37.400 --> 00:22:40.800
 expectation. There are lots of factors out

452
00:22:40.800 --> 00:22:43.800
 there that have been identified in the academic literature when you

453
00:22:43.800 --> 00:22:46.400
 selectively go out and pick a handful of

454
00:22:46.400 --> 00:22:49.500
 those factors. The expectation is every single

455
00:22:49.500 --> 00:22:52.500
 one of those is going to be a positive contributor to

456
00:22:52.500 --> 00:22:55.400
 your portfolio over time, right you you

457
00:22:55.400 --> 00:22:58.300
 wouldn't necessarily pick one that you thought. Well, it's gonna be a loser but we're gonna hold on

458
00:22:58.300 --> 00:23:01.100
 to it, right you're picking all of these different factors of the

459
00:23:01.100 --> 00:23:04.700
 expectation that each one of those is going to be a

460
00:23:04.700 --> 00:23:07.300
 positive contributor over a period of time when you

461
00:23:07.300 --> 00:23:10.400
 weave them together you sort of iron out

462
00:23:10.400 --> 00:23:13.400
 the highs and lows of any one particular factor and

463
00:23:13.400 --> 00:23:17.100
 you get that very nice steady stream of

464
00:23:16.100 --> 00:23:19.500
 return into your

465
00:23:19.500 --> 00:23:22.300
 portfolio. That's generated by those Factor exposures. Yeah.

466
00:23:22.300 --> 00:23:25.400
 It's the old the old adage we're going for singles and doubles

467
00:23:25.400 --> 00:23:28.200
 not home runs, right? Yeah. Yeah exactly. So let's

468
00:23:28.200 --> 00:23:31.200
 talk a little bit about factors and fixed income and then

469
00:23:31.200 --> 00:23:34.100
 we can take a look at some of the the factors overseas.

470
00:23:34.100 --> 00:23:37.800
As well, but I do want to spend some time on some of

471
00:23:37.800 --> 00:23:40.100
 the headlines. So why don't we

472
00:23:40.100 --> 00:23:44.000
 talk a little bit about us fixed income factors? Sure. So

473
00:23:43.600 --> 00:23:46.200
 as you know, right fat factors are

474
00:23:46.200 --> 00:23:49.800
 not an equity only thing. In fact, we see factors across

475
00:23:49.800 --> 00:23:53.600
 all different kinds of assets fixed income Commodities

476
00:23:52.600 --> 00:23:55.400
 housing real

477
00:23:55.400 --> 00:23:58.400
 estate, right all these I the concept of value for

478
00:23:58.400 --> 00:24:01.500
 instance and the concept of momentum right anything that has a price associated

479
00:24:01.500 --> 00:24:04.400
 with it stores can demonstrate these sort of

480
00:24:04.400 --> 00:24:07.200
 factors. And that's true. In fact fixed income the way we

481
00:24:07.200 --> 00:24:10.400
 think about factors and fixed incomes specifically is is kind

482
00:24:10.400 --> 00:24:13.400
 of interest rate risk, which is time, right? So think

483
00:24:13.400 --> 00:24:17.300
 about what we talked about with the yield curve inversion

484
00:24:16.300 --> 00:24:19.400
 and what was going on on the short end versus the

485
00:24:19.400 --> 00:24:23.500
 long end what we've observed in the

486
00:24:23.500 --> 00:24:26.200
 past. Let's call year was a really

487
00:24:26.200 --> 00:24:29.800
 strong interest rate risk lack

488
00:24:29.800 --> 00:24:32.600
 of benefit that you got for sort of being paid

489
00:24:32.600 --> 00:24:34.000
 over time, right?

490
00:24:34.100 --> 00:24:38.300
And in theory, right you should get paid to hold

491
00:24:37.300 --> 00:24:41.100
 over time because there's less certainty

492
00:24:40.100 --> 00:24:43.500
 about what the future holds so you demand a

493
00:24:43.500 --> 00:24:46.800
 premium to hold something over time to lend over time. And

494
00:24:46.800 --> 00:24:49.200
 so when you have the short end

495
00:24:49.200 --> 00:24:52.500
 of the curve come up that tends to impact that interest

496
00:24:52.500 --> 00:24:55.500
 rate sets that risk that sensitivity because you're

497
00:24:55.500 --> 00:24:58.800
 not getting paid over time. You're getting paid actually on the

498
00:24:58.800 --> 00:25:01.700
 the shorter end potentially. So when you

499
00:25:01.700 --> 00:25:04.800
 see a pullback of rates,

500
00:25:04.800 --> 00:25:07.700
 right and price is going up you're seeing

501
00:25:07.700 --> 00:25:10.800
 that benefit playing out through the first quarter as well credit risk

502
00:25:10.800 --> 00:25:13.300
 is just the difference the buildup over

503
00:25:13.300 --> 00:25:16.300
 the risk free rate treasuries to account

504
00:25:16.300 --> 00:25:19.200
 for hey, you know a corporation has more risk than a government

505
00:25:19.200 --> 00:25:22.500
 and I should be paid that difference. And so you're investing

506
00:25:22.500 --> 00:25:25.200
 up and down the various yield curves that

507
00:25:25.200 --> 00:25:28.900
 build up on that and in this case credit risk really as

508
00:25:28.900 --> 00:25:31.900
 a factor wasn't a very solid contributor

509
00:25:31.900 --> 00:25:33.200
 for the first quarter slightly positive.

510
00:25:34.100 --> 00:25:37.200
The the show really has been frankly for the

511
00:25:37.200 --> 00:25:40.500
 past 18 months were interest rate risk is in

512
00:25:40.500 --> 00:25:43.500
 terms of factor Premia in your portfolios.

513
00:25:43.500 --> 00:25:46.500
 And then Market is is again just Market

514
00:25:46.500 --> 00:25:49.800
 beta which is a buildup of all these different factors expressing themselves.

515
00:25:49.800 --> 00:25:53.200
 So on the whole positive Bond performance

516
00:25:52.200 --> 00:25:55.500
 being driven by changes to

517
00:25:55.500 --> 00:25:59.500
 the the yield curve in many cases and some

518
00:25:58.500 --> 00:26:01.400
 expectation that Bond markets are looking ahead

519
00:26:01.400 --> 00:26:04.600
 and pricing for a cessation of rate raises

520
00:26:04.600 --> 00:26:07.500
 by central banks. So so my expectation would

521
00:26:07.500 --> 00:26:10.200
 be for for fixed income investors again much like

522
00:26:10.200 --> 00:26:13.400
 Equity potentially more volatility here, right? The

523
00:26:13.400 --> 00:26:16.400
 the rodeo is not over the big bull riding

524
00:26:16.400 --> 00:26:18.200
 could yet be to come so

525
00:26:19.200 --> 00:26:22.400
You know stay patient the the benefit here is

526
00:26:22.400 --> 00:26:25.400
 there's return associated with fixed income

527
00:26:25.400 --> 00:26:29.500
 to a degree. We haven't seen in 15 years. And so

528
00:26:29.500 --> 00:26:32.700
 let this play out. And again, these Factor

529
00:26:32.700 --> 00:26:35.600
 exposures are the expectation is over time. These are

530
00:26:35.600 --> 00:26:38.100
 going to be a additive to the returns that you

531
00:26:38.100 --> 00:26:40.700
 get from the bond market you had mentioned this in some of your previous comments.

532
00:26:42.500 --> 00:26:45.400
Factors perform differently geographically too

533
00:26:45.400 --> 00:26:48.500
 right like value in the US might give you a different return

534
00:26:48.500 --> 00:26:51.300
 versus value and the international develop during the

535
00:26:51.300 --> 00:26:54.500
 Emerging Markets Arenas. So I think there's diversification story

536
00:26:54.500 --> 00:26:57.600
 there. Can you comment on that, please? Yeah. Well, yes, of

537
00:26:57.600 --> 00:27:00.100
 course and and I sort of made a comment

538
00:27:00.100 --> 00:27:01.300
 about as

539
00:27:02.300 --> 00:27:05.500
central banks become decoupled and start to operate a

540
00:27:05.500 --> 00:27:09.000
 little more independently that it has an impact on the

541
00:27:11.300 --> 00:27:14.600
local economies in all of these different markets as

542
00:27:14.600 --> 00:27:17.200
 an impact on their currencies. And so

543
00:27:17.200 --> 00:27:20.600
 when you think about fixed income the benefit that you get from

544
00:27:20.600 --> 00:27:23.300
 not only where you hold on

545
00:27:23.300 --> 00:27:26.500
 the curve and and the amount of credit that you're willing but that

546
00:27:26.500 --> 00:27:29.900
 you're going to diversify the various curves

547
00:27:29.900 --> 00:27:32.300
 that you hold and the where you

548
00:27:32.300 --> 00:27:35.900
 are on that across geographies and

549
00:27:35.900 --> 00:27:38.200
 then take into account the impact that

550
00:27:38.200 --> 00:27:42.200
 currencies might have right and so we know for equities

551
00:27:41.200 --> 00:27:45.100
 the the volatility signature

552
00:27:44.100 --> 00:27:47.100
 of equity is is so robust that

553
00:27:47.100 --> 00:27:50.600
 you're you tend to be willing to hold the volatility of

554
00:27:50.600 --> 00:27:53.900
 fluctuations and currency in in

555
00:27:53.900 --> 00:27:56.000
 fixed income. It tends not to pay you to do

556
00:27:56.200 --> 00:27:59.400
 that. And so I know for instance

557
00:27:59.400 --> 00:28:03.100
 that here at Cemetery you folks hedge back

558
00:28:03.100 --> 00:28:07.000
 to the dollar sure and that takes some of that volatility out,

559
00:28:06.600 --> 00:28:09.400
 right? And again, I think that's a benefit

560
00:28:09.400 --> 00:28:11.000
 for Factor investors because what you're

561
00:28:11.200 --> 00:28:14.300
Is less volatility associated with fluctuations currency and

562
00:28:14.300 --> 00:28:18.000
 you're getting maybe stronger signal from these these

563
00:28:17.200 --> 00:28:20.900
 different sources of return across

564
00:28:20.900 --> 00:28:23.400
 different markets and they're all going to be hitting at

565
00:28:23.400 --> 00:28:26.700
 different times. Once the sort of the global economy

566
00:28:26.700 --> 00:28:29.200
 comes unpegged to what's going

567
00:28:29.200 --> 00:28:33.100
 on fighting inflation. Yeah until I think it's a perfect diversification story

568
00:28:32.100 --> 00:28:33.300
 and

569
00:28:34.100 --> 00:28:37.600
we have a saying here that the only free lunch and investing is diversification. And

570
00:28:37.600 --> 00:28:40.900
 so we tout that investor should be embracing that Casey.

571
00:28:40.900 --> 00:28:43.400
 Thank you so much for joining us that concludes part one.

572
00:28:43.400 --> 00:28:46.600
 Please feel free to access other podcasts

573
00:28:46.600 --> 00:28:49.000
 that we have done and they can be

574
00:28:49.400 --> 00:28:52.600
 accessed anywhere you get your podcast. So please join Casey and

575
00:28:52.600 --> 00:28:56.000
 I for part two and our next series symmetry Partners

576
00:28:55.700 --> 00:28:58.800
 LLC is an investment advisor firm

577
00:28:58.800 --> 00:29:01.700
 registered with the Securities and Exchange Commission The

578
00:29:01.700 --> 00:29:04.600
 Firm only transacts business in states where it

579
00:29:04.600 --> 00:29:07.500
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580
00:29:07.500 --> 00:29:11.200
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581
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 specific level of skill or training and does

583
00:29:16.400 --> 00:29:19.100
 not constitute an endorsement of the firm by the

584
00:29:19.100 --> 00:29:22.300
 commission. No one should assume that future performance of any

585
00:29:22.300 --> 00:29:26.300
 specific investment investment strategy product or

586
00:29:25.300 --> 00:29:28.300
 non-investment related content made

587
00:29:28.300 --> 00:29:31.800
 reference to directly or indirectly in this material will be

588
00:29:31.800 --> 00:29:32.400
 profitable.

589
00:29:33.400 --> 00:29:36.500
As with any investment strategy there is the possibility of

590
00:29:36.500 --> 00:29:39.500
 profitability as well as loss due

591
00:29:39.500 --> 00:29:42.300
 to various factors including changing market

592
00:29:42.300 --> 00:29:44.700
 conditions and/or applicable laws.

593
00:29:45.300 --> 00:29:48.900
The content may not be reflective of current opinions or

594
00:29:48.900 --> 00:29:51.600
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595
00:29:51.600 --> 00:29:54.300
 is provided for educational and background use only

596
00:29:54.300 --> 00:29:58.000
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597
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 contained in this material Services the

598
00:30:00.800 --> 00:30:04.400
 receipt of or as a substitute for personalized

599
00:30:03.400 --> 00:30:05.700
 investment advice.

 

Bulletproof Dental Practice Podcast Episode 294

Hosts: Dr. Peter Boulden & Dr. Craig Spodak

Guest: Randy Smith

Key Takeaways:
Introduction
Thoughts On Regional Banks
TikTok Legislation
Actionable Item To Move Out Of Regional Banks 
Interest Rates
Private Equity
Take Time Aside 
Low Cost Way To Stop Attrition

References:

Bulletproof Summit
Bulletproof Mastermind
Mighty Networks: Bulletproof Dental Practice
Bulletproof ERC
To Sell or NOT to Sell PLUS Mastermind Ski Retreat Recap 
What Got You Here Won't Get You There: How Successful People Become Even More Successful 
Warrior Sailing

 

Tweetables:
People, in the face of uncertainty, need a process. -Dr. Craig Spodak

Recessions happen when people stop spending money. - Randy Smith

Don’t look at anything with your face on the paper. - Randy Smith

Look at everything from a macro view. - Randy Smith

There comes a time when it’s the right time. -Randy Smith

It doesn’t help that you’re really on people. -Dr. Craig Spodak

Most deals don’t close. -Randy Smith

So many people operate by gut. -Dr. Peter Boulden