Magnifi’s Artificial intelligence is changing the way small financial advisors can interact with their client’s portfolios. They provide a wide variety of tools and services that can build a more diverse, robust, and optimized portfolio to suit your client’s needs. From the simple search features that allow investors to gauge the history of funds and stocks to more sophisticated tools like leverage selection that navigate the risk of a customized portfolio, Magnifi gives advisors options that allow them to compete with larger investment teams. Additionally, customizing portfolios is easier and quicker which allows advisors to draw in more clientele, all the while providing the personal experience a small financial team can offer. Finally, Magnifi seamlessly integrates with other leading custodians and optimizes the clients' experience. All of these features solve problems larger firms make hires to fix!

(New York)

The market was hit hard by bad economic data this week and yet markets barely budged. Consumer sentiment, Chicago Purchasing Managers Index, and Home Prices all swirled a whirlwind of bad news for markets and yet they hardly budged. This is because markets are convinced more than ever that bad news is good news because it will have the Fed kick the tapering can down the road. Powell made it clear that the new Fed environment will accommodate higher inflation and that while tapering might start this year, the Fed is a long way from rate hikes. This means growth-oriented interest rate-dependent stocks will do well as the Fed favors employment over inflation in its dual mandate.

FINSUM: Powell has all but confirmed a slow transition in monetary policy, don’t look for economic data to be the breaking point in your portfolio.

(Rio de Janeiro)

Emerging markets make up a fraction of US investors' portfolios even though they account for a quarter of global stocks weighted by market value, and they are one of the most important tools to beat the markets moving forward. The biggest factor driving the divergence in emerging markets and US markets has definitely been earnings, which has pushed the gap to its widest levels in the last two decades. However, earnings aren’t the only component of stock valuation. Dividend growth is expected to double up on US markets with 3% as compared to 1.4-1.5% in the U.S. Meanwhile, emerging markets are trading at a ridiculous discount as their P/E is about 12x where the S&P 500 is an average of 20. The common ratio of P/E to expected earnings growth and dividend yield favors emerging markets, which is already assuming high earning growth for US stocks. Finally the last time the gap between emerging markets and U.S. stocks was this bad the EM went on to beat the S&P by 14% over the next 7 years.

FINSUM: This is the perfect opportunity to move abroad because presently the discount is just unjustified for emerging markets.

(Washington)

The SEC is sending some very disconcerting (if you are advisor), and not so subtle signals on its plans. This version of the SEC has taken a very different tact in its appointment of critical staff. Effectively, it has closed the revolving door. And what we mean, is that in contrast to previous SECs, this one has brought almost no one in from the industry at a senior position. Instead, it is being staffed with prosecutors, consumer advocates, and other regulatory-oriented government types. The appointments seem to be a reflection of Gensler’s policies priorities and views on how he wants the SEC to conduct itself during the Biden era.

FINSUM: The SEC is sending the loudest message it possibly can without writing it on the wall. The “read between the lines” is clear: enforcement is going to be intense.

(New York)

When clients think about retiring early, Social Security benefits and their timing are often a critical consideration. However, what most don’t realize is that health insurance costs are often the biggest hindrance to retiring early. This means advisors have a crucial role to play in helping advisors plan for retirement healthcare costs. One of the main options for keeping costs lower is to use Obamacare (ACA insurance) for the period between retirement and Medicare eligibility. However, this takes significant planning, as the pricing for this is based on modified adjusted gross income (MAGI). The way MAGI is calculated includes some standard forms or income, but excludes others, such as Roth RIA contributions.

FINSUM: Advisors need to be careful in how to structure client income during this period of retirement as it can have a very material effect on insurance pricing and thus cost of living.