Weighing The Risks: Recent Episodes
Orion Portfolio Solutions
Weighing The Risks was created to help you, the financial advisor or investor, reach your long-term financial goals. In each episode, we consider various market scenarios to help prepare for the certainty of uncertainty. Remember to look at where you're going to, not what you're going through. Brought to you by Orion.
Energy, often dubbed as the lifeblood of industries, holds the power to shape economies. However, the surge in energy prices has the potential to cast a shadow over the stock and bond markets, sending ripples through the intricate web of financial systems. In this episode, Rusty talks with Jake Hanley, Managing Director and Senior Portfolio Specialist at Teucrium. Jake has an intimate understanding of investment strategies made available through Teucrium's funds. He is partly responsible for certain fund-related daily operating procedures and acts as an alternate for specific dual control functions. Rusty and Jake weigh potential scenarios and risks associated with rising energy prices. With over a decade's experience in financial services, Jake also shares Teucrium's current macroeconomic outlook, how to mitigate the negative effects of rising energy prices, and the other risks investors should know about.
Key Takeaways
[03:11] - Jake's background and his work at Teucrium.
[05:02] - Jake's definition of risk.
[06:52] - Teucrium's current macroeconomic outlook.
[08:30] - The potential impact of rising energy prices on the economy and markets.
[10:31] - Jake's outlook on other commodity markets, such as agriculture and precious metals.
[13:04] - How to mitigate the negative effects of rising energy prices.
[15:11] - How advisors allocate commodities in their portfolios.
[17:16] - Other potential risks to consider, such as the situation in Russia and Ukraine.
[19:13] - Base case scenario on rising energy prices.
[22:06] - Good case scenario on rising energy prices.
[24:44] - Bad case scenario on rising energy prices.
[27:19] - Other risks investors should be aware of.
Quotes [08:13] - "The foundation for all capital markets is international trade currency and sovereign debt. And as you have quakes and tremors in those markets, it's going to reverberate throughout all asset classes. That's why the broad macro view right now is volatility." ~ Jake Hanley [09:07] - "Energy is the lifeblood of the industry. So higher energy prices either mean lower profit margins for corporations producing goods and services or higher consumer prices." ~ Jake Hanley [21:57] - "Energy prices moving up can act as a cap for future economic growth. Higher prices can cure high prices." ~ Jake Hanley
Links
Jake Hanley on LinkedIn
Jake Hanley on Twitter
Northeast Kingdom by Will Evans
Teucrium
Teucrium ETFs on Twitter
Vermont Flood Disaster Relief (Teucrium's Matching Gift Program)
Ameriprise Financial
Merrill Lynch
Jackson Hole Economic Symposium
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Meet Rusty Vanneman, Orion's Chief Investment Officer
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Disclosure Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.
2356-OAT-8/25/2023
In the real estate market, both the commercial and residential sectors are currently navigating through challenging waters. Rising interest rates and falling property valuations plague the commercial realm, while residential real estate contends with affordability and a shortage of housing supply. Although these markets face formidable challenges, knowing the potential risks and scenarios can help financial advisors and investors make better decisions. In this episode, Rusty talks to Xavier Goss, Portfolio Manager, and Hannah Greene, Fixed Income Investment Analyst at Capital Group. Xavier has 19 years of investment industry experience and has been with Capital Group for two years. Before joining Capital, Xavier was a portfolio manager in the structured credit group at BlackRock. Hannah is a fixed-income investment analyst with 10 years of investment industry experience. Xavier and Hannah address concerns about commercial real estate, such as rising interest rates and falling property valuations, and highlight affordability and shortage of supply as key issues in residential real estate. They also discuss the potential risks and scenarios in commercial and residential real estate markets. Xavier and Hannah believe the housing boom isn't over and that the economy is poised for a soft landing rather than a recession.
Key Takeaways
[02:59] - Hannah and Xavier's career backgrounds and how they got to Capital Group.
[04:14] - Xavier's definition of risk.
[06:56] - A broader macro outlook from Capital Group.
[12:22] - What commercial real estate is and its challenges today.
[18:50] - How commercial real estate problems affect the broader economy.
[21:00] - Potential opportunities and catalysts for unlocking value in commercial real estate.
[22:51] - What makes up the residential real estate landscape?
[23:45] - The challenges facing residential real estate today.
[26:13] - Xavier's outlook on residential real estate and its economic impact.
[29:31] - Base case scenario for mortgage rates, home prices, and commercial real estate.
[35:00] - Good case scenario for mortgage rates, home prices, and commercial real estate.
[37:59] - Bad case scenario for mortgage rates, home prices, and commercial real estate.
[44:14] - Other risks investors should be aware of.
Quotes [09:27] - "If you can survive a run on the banks and banking crisis in March and come out the other side relatively unscathed, that's a good outcome." ~ Xavier Goss [19:05] - "As long as the problems in real estate are concentrated mostly on office loans, there won't be a broad spillover into the economy." ~ Hannah Greene [24:22] - "If you own a home with a 2% or even a 3% mortgage, it's hard to pull the trigger and sell it because you don't know what home you'll purchase because there isn't that much supply out there. And you can't replicate that mortgage rate, so your payments are up two to three times what you were paying before." ~ Xavier Goss
Links
Xavier Goss on LinkedIn
Hannah Greene on LinkedIn
Capital Group
Shake It Off by Taylor Swift
One Love by Bob Marley
Fannie Mae
Freddie Mac
Insights | Capital Group
Connect with Us
Meet Rusty Vanneman, Orion's Chief Investment Officer
Check Out All of Orion's Podcasts
Power Your Growth with Orion
Disclosure Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.
2048-OAT-7/28/2023
AI has become a buzzword that dominates the headlines, sparks conversations, and captures the imagination of both industry experts and the general public. However, amidst the seemingly widespread mentions of AI, questions arise regarding the existence of a potential bubble burst in AI stocks. As the debate intensifies, weighing the possible risk and scenarios surrounding the AI hype becomes crucial. In this episode, Rusty talks with Dan Russo, Portfolio Manager at Potomac Fund Management. Dan has been in the securities industry for 23 years. His experience includes a wide range of institutional investors, working with them to perform fundamental, technical, and quantitative research to navigate the market and generate actionable trading and investment ideas. At Potomac Fund Management, Dan conducts technical and quantitative analysis, structuring portfolios of ETFs based on this analysis and providing ongoing written research for the firm's financial advisor client base. Dan and Rusty weigh some potential scenarios and risks from the possibility of a bubble burst in artificial intelligence stocks and future scenarios for the stock market, technology stocks, and interest rates.
Key Takeaways
[02:31] - Dan's career background and how he got to Potomac Fund Management.
[03:38] - How Dan defines risk.
[06:38] - Is AI-related stock overvalued?
[10:07] - Are there signs of speculative behavior in AI investments and indications of a herd mentality?
[13:16] - How sustainable is the AI industry's growth trajectory?
[15:30] - Will artificial intelligence increase investment companies' efficiency and productivity?
[17:44] - How AI impacts the markets over time and how investment managers manage their portfolios moving forward.
[20:44] - Rusty's risk and scenario on AI's impact on U.S. stocks, technology stocks, and interest rates.
[22:25] - Dan's perspective on Rusty's first base-case scenario.
[24:58] - Rusty's good case scenario for AI stocks.
[30:03] - What other risks should investors think about?
Quotes [12:53] - "There's probably a bubble in media mentions of the phrase AI. But I can make a compelling case that this is not super crowded at this point. And I wonder if I would call it a bubble yet." ~ Dan Russo [19:10] - "If you are a fundamental investment manager or stock picker, keep doing your job. Keep analyzing these companies from the bottom up and then just incorporate AI into that analysis process." ~ Dan Russo [30:30] - "Investors should also think about regulatory risks. We have no idea how governments are going to react to the widespread adoption of artificial intelligence." ~ Dan Russo
Links
Dan Russo on LinkedIn
Dan Russo on Twitter
Potomac Fund Management
Can't Stop by Red Hot Chili Peppers
Global X ETFs
Manish Khatta
Connect with our hosts Rusty Vanneman
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Disclosure Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.
1696-OAT-6/21/2023
With the current political climate, it's important to know the risks and scenarios that could play out from different geopolitical topics. From trade disputes to military conflict, there are many ways that geopolitical unrest can impact the economy and the market. In this episode, Rusty talks with Kim Arthur, President and CEO at Main Management. Kim began his financial career in 1987 when he joined Montgomery Securities in their Institutional Sales division. In 2009, he was recognized by Institutional Investor Magazine as a "Rising Star" of Foundations and Endowments. Kim has also been profiled in Index Universe articles and referenced in Barron's, Wall Street Journal, Business Week, and Fortune Magazine, among others. Kim talks with Rusty about some potential risks and scenarios from different geopolitical topics that are top of mind for many financial advisors and investors and the impact geopolitical turbulence might have on the economy and the market.
Key Takeaways
[03:21] - Kim's career history and key role at Main Management.
[07:12] - Why investors should consider geopolitical risk in their portfolios.
[08:48] - The impact of the Russian-Ukrainian conflict on the market.
[12:06] - Kim's perspective on investing in China.
[16:08] - How Main Management views the U.K. from an investment perspective.
[18:07] - What Kim thinks about deglobalization.
[23:07] - The good, the bad, and the ugly of the rising dollar.
[26:10] - Other geopolitical risks investors should be aware of.
[30:14] - Kim's rationale for deglobalization.
[34:30] - What the market looks like during actual hostilities.
[41:10] - Other risks investors should consider in this current environment.
[46:09] - An equity fund inflows and outflows analysis.
Quotes [07:29] - "The two things that have to be considered with geopolitical risk are once you go outside of your home country, you are exposing yourself to currency risk. If it's a tailwind, that can be very nice, but if it's a headwind like it's been for the last 11 years, it can be very painful. Then the political and conflict aspect. Many countries don't play by the same rules you and I play in the U.S." ~ Kim Arthur [24:26] - "There have been huge flows from overseas into the U.S. dollar because of the safe haven of this country that we are in. The good is it's cheaper to import things. The bad is that the high dollar is a huge currency headwind. The ugly is when you have the dollar's strength, emerging currencies blow up big time." ~ Kim Arthur [41:34] - "Risk, by definition, exposes you to danger, harm, or loss. None of those sounds good. But you can reduce all of those if you take calculated risk-taking." ~ Kim Arthur
Links
Kim Arthur on LinkedIn
Main Management
Main Management on Twitter
Orion Risk Intelligence
Sweet Child O' Mine by Guns N' Roses
Montgomery Securities
Goldman Sachs
Connect with our hosts Rusty Vanneman
Subscribe and stay in touch
Apple Podcasts
Spotify
Google Podcasts
Disclosure Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. The past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose and makes no warranties with respect to the results to be obtained from its use.
2168-OPS-11/10/2022
Welcome to the premiere episode of Weighing The Risk. This podcast was created to help financial advisors and investors reach long-term financial goals. Each month, we examine the top-of-mind economic or market topics, and the probability and possibility of various scenarios that could impact investment portfolios. In this episode, Rusty talks with Matthew Bartolini, Managing Director and Head of SPDR Americas Research. In his role, Matthew is responsible for all product research and analysis of both SPDR ETFs and SSGA Funds. His team develops proprietary research, strategies, and thought leadership for the firm's ETF and mutual fund product suite. Matthew aims to help clients better understand the market landscape and achieve their desired investment outcome through customized solutions and proprietary research. Matthew talks with Rusty about the current electoral map, how the market typically behaves around midterm elections, and how he sees the market in different scenarios.
Key Takeaways
[01:08] - Welcome to Weighing The Risk.
[03:06] - How Matthew came to work at SPDR Research.
[04:33] - How Matthew defines risk.
[05:40] - What the current electoral map looks like.
[12:16] - How the market typically behaves around midterm elections.
[17:47] - How Republicans' victory will affect the economy and the market.
[19:52] - What the market and economy will look like if the Democrats win.
[23:19] - Matthew's take on different market scenarios.
[32:19] - Other risks investors should take into account.
[33:49] - The impact of de-globalization on relative performance in the future.
[35:11] - The current state of inflation.
Quotes [01:22] - "As financial advisors and investors, we have to recognize what we can control and what we cannot. As for what we can control, we can analyze portfolio risk, diversify portfolios and, to a large extent, manage expectations, and help with each of these. That's why we consider various market scenarios." ~ Rusty Vanneman [13:42] - "Interestingly, the one year following the midterm election has never been a negative return period for the S&P 500, dating back to 1939. In 80 years, we've never had negative runs in that one year following. Markets generally behave well past the midterm elections." ~ Matthew Bartolini [22:30] - "If we have a split congress, beware of political theatrics around the debt ceiling debate and government shutdowns. And historically, the headlines are worse than the actual impact. That creates near-term volatility." ~ Matthew Bartolini
Links
Matthew Bartolini on LinkedIn
SSGA
Raj Udeshi
Hidden Levers
Shipping Up To Boston by Dropkick Murphys
Voodoo Chile Blues by Jimi Hendrix
Connect with our hosts Rusty Vanneman
Subscribe and stay in touch
Apple Podcasts
Spotify
Google Podcasts
Disclosure Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.
1884-OPS-10/11/2022