(New York)

Societe Generale, famed European investment bank, has just told investors they should load up on gold. Gold is seeing several value drivers at the moment. These include the economic cycle and fears over the trade war, a lack of other safe haven assets, and importantly (and much less known), central bank purchases. Global central banks (like China’s) are trying to diverse away from the Dollar, and gold is an attractive way for them to do so.

FINSUM: There are a lot of tailwinds for the yellow metal right now. The Fed is less dovish than most expected and there does not seem to be much risk of a huge risk-on shift that would leave gold forgotten.

(New York)

Markets have indigestion this week, but is a recession any more of a threat than it was a couple weeks ago? The answer is yes. So far the manufacturing side of the economy has been the weaker one, with the consumer side staying strong. However, all the tariffs that have been imposed on China will now hit the side of the US economy that is strongest—the consumer—by raising prices at the register. Therefore, the trade war will directly weaken the best part of the economy, which could seriously curtail growth.

FINSUM: To protect against this, investors may want think about shifting into defensive shares like consumer staples, healthcare, utilities, and real estate, all of which tend to outperform cyclicals in a down economy/market.

Going independent has many upsides and downsides, but listing them as pros and cons is not particularly simple. Sure, there are higher payouts than at a wirehouse, but there is also more responsibility. In some sense, it depends on the stage of your career as an advisor as to whether going independent is the right choice. If you are senior, with your own book of high paying clients and your own office/branch, then going independent can make sense. You get higher payouts and you already have experience managing a team, and you have more product flexibility for clients. If you are younger, going independent can be more difficult since you likely need more help building your book, and don’t have experience managing people or the overheads associated with running your own branch.

FINSUM: There does seem to be a “right time” to go independent. There are a lot of perks to doing so, but one does need to have a bit of an entrepreneurial slant as you truly are a business owner in such a scenario.

(Washington)

While it has largely gone unnoticed by the wealth management media, New York state has just enacted a new best interest rule for annuities. As of August 1st, advisors must now consider the best interests of clients before selling annuities. Additionally, annuities sellers cannot call themselves advisors unless they are licensed to do so. The rule came about to try to fill a gap after the defeat of the DOL’s fiduciary rule last year. New York follows Connecticut and Nevada in making their own best interest rules governing certain products.

FINSUM: Annuities have been cleaning up their act in the last few years, and this will be another step in the process. Best interest rules notwithstanding, we do think the improving business climate for annuities is a good thing because they make sense for many clients.

(Washington)

While investors might not feel it right now, tariffs do have some upsides. The most direct one—revenue for the US Treasury. US Treasury income is surging because of the recent tariff hikes on Chinese goods. The rolling 12-month sum of customs duties collected by the Treasury (through the end of June) was $63 bn, almost double the sum of the same period last year. If Trump enacts another round of planned hikes on September 1st, the US will likely collect $100 bn in tariffs this year.

FINSUM: This is a good number, especially at a time of major government over-spending. However, it must be remembered that the large majority of this bounty will be eaten up by aid paid to US farmers as part of tariff relief efforts.