Many investors are fretting over the rising bond yields which are sending their prices tumbling, but this could just be the tip of the iceberg. The aggregate bond index AGG has already fallen 3.9% and that's with the critical 10-year T-bill only rising to a 2% yield. If the 10-year hikes all the way up to its high of 3.25% in 2018 that could be a disaster. With inflation at a 40-year high that's a real possibility and any yield you are getting is all eaten away at. However, if inflation is temporary (caused by supply chains) or Fed pulls breaks fast enough then yields might be maxing out, and bond prices could turn around.

Finsum: Inflation expectations are remarkably low which means that investors are convinced either the Fed will credibly bring inflation down or as supply chains loosen that will bring inflation down. Markets are saying that bond risk is priced in.

Markets are flummoxed as to the variety of risks right now, and it is just unclear how aggressively if at all the Fed and Biden are going to respond to the economic threats. There are two ways to capitalize on the current dip that is hitting your portfolio. The first is tax-loss harvesting; these risks are ones that are more than a month long which could give you the opportunity to repurchase the drops you made in the upcoming months. For those investors who feel adequately equipped in the tax-loss harvesting space, rebalancing is the main tool. That is if your portfolio has lost 10% value inequities with the drops, then up your share to meet the ratios you were at pre-dip. Once stocks have rebounded you can capitalize and re-tool in the opposite direction to maintain the portfolio balance you want in order to serve your risk preferences.

Finsum: Don’t sit during the volatility, but don’t sell off unless you are going to capitalize on the tax efficiency in your portfolio.

The Biden administration’s SEC has lept from one sub-financial industry to the next whether it's crypto or ESG, but now they are gonna take a closer look at private equity and other ‘alternatives’ like hedge funds. The process is mainly would limit what retirees and savers have opportunities in private equity and hedge funds through their plans and limit them to accredited investors. Alternatives have taken off in the last few years and the SEC is looking to increase transparency and possibly limit access. They are cautioning other companies from putting PE in retirement portfolios.

Finsum: This limited access could take the many savers and retirees out of the huge gains in PE over traditional equity markets, and might only hurt the general public.

Many investors are fretting over the rising bond yields which are sending their prices tumbling, but this could just be the tip of the iceberg. The aggregate bond index AGG has already fallen 3.9% and that's with the critical 10-year T-bill only rising to a 2% yield. If the 10-year hikes all the way up to its high of 3.25% in 2018 that could be a disaster. With inflation at a 40-year high that's a real possibility and any yield you are getting is all eaten away at. However, if inflation is temporary (caused by supply chains) or Fed pulls breaks fast enough then yields might be maxing out, and bond prices could turn around.

Finsum: Inflation expectations are remarkably low which means that investors are convinced either the Fed will credibly bring inflation down or as supply chains loosen that will bring inflation down. Markets are saying that bond risk is priced in.

Direct indexing is in its infancy in UK and Euro area, whereas across the pond it has taken off quickly. Driving the growth in the U.S. is the ability for direct and custom indexing to accommodate the US tax system and those benefits just aren’t present in Europe. However, ESG is a well-developed market and direct indexing is turning the heads of many ESG investors for its custom approach. Experts say the institutional knowledge in Europe could make it a haven for direct indexing because larger ETFs take too simple of an approach. Morgan Stanley’s Paramterics sees a natural marriage of these industries because experts can develop more robust indices or individual investors can drop the greenwashers from the indices they are tracking.

Finsum: ESG could vault direct indexing to the investing frontier in the way that tax-loss harvesting has in the U.S.