Most all Americans rely on medicare during their retirement as a means of subsidizing or paying for their healthcare. This year is more critical than ever as changes hit medicare payments because the U.S. is seeing a spike in inflation that eats at retirement funds and might put many in a bind. Medicare costs are split into two main categories: Part A, hospital coverage and Part B, outpatient care. Most don’t pay for a Part A premium and for those that don’t meet the work requirements costs aren’t changing much about $28 for the year, but Part B is a different story. For the lowest income category, the payment is up to $21 a month, and that only increases as tax returns increases. Individuals should appeal their part B premium if their income had a significant change.

FINSUM: These healthcare cost changes are huge, and retirees need to address them in their portfolio given spiking prolonged inflation.

Brokers better look out, the SEC has started the new year with a bang. The Commission has mostly been quiet about its potential Reg BI changes since the rule went into effect about 18 months ago. However, a big new warning has come out from Quinn Emanuel’s SEC enforcement practice. There are “strong indications” of much more robust enforcement coming. According to Kurt Wolfe of the SEC Enforcement Practice, “SEC Chair Gary Gensler is under pressure from broad constituencies to show results in the space. For example, at a recent hearing of the Financial Services Committee of the House of Representatives, Rep. Carolyn Maloney (D-N.Y.) encouraged Chair Gensler to ‘take further action to strengthen this rulemaking,”. Further, “the SEC has signaled that regulated firms may not be getting Reg BI right, and senior SEC officials have made it clear that they intend to take an expansive, perhaps aggressive, approach to Reg BI.”

FINSUM: Since Biden took office it has really only been a matter of time until enforcement scaled up. It is now clear that it is coming.

BlackRock shook up the investment world when he declared global capitalism would make it easier to find a green-way forward. However, it is black rocks model portfolios that really piloted the ESG plane. BlackRock inserted ESG right in the middle of the model portfolios which give many investors easier access to sustainability, and some became ESG investors without even trying to. This vision is what made ESG become the fastest growing investment trend by giving it to clients in a pre-packaged easy to invest format. However, ratings are suggesting some green-washing as 154 of the 155 companies in the S&P 500 don’t actually site emissions reductions as a factor, so BlackRock has crept in on owning lots of fossil-fuel guzzlers like Chevron and Exxon.

FINSUM: Biden admin might want to step up the regulation if it wants to hamstring the greenwashing on Wallstreet.

The active ETF market is full of bonds as nearly 2/3rds of all active funds are in fixed income. Everyone is searching for a beta advantage in this market, and real estate could be the play. Index tracking fixed income isn’t cutting it because of the low yield environment, and treasuries taking up too much space. Investors are shortening the duration to mitigate the interest rate risks as inflation is baring down as well. Funds like DigitalBridge Fundamental US Real Estate, are managed fixed-income products that give exposure to fixed-income and REITs. Most investors hold bond funds for precaution but real estate does a better job of providing uncorrelated returns. DBRIX just hit a three-year anniversary in a growing market segment.

FINSUM: Shortening duration has been a no brainer for those with bond exposure but adding some real estate to the fixed income could really distinguish an active FI opportunity.

Bridgewater is the world’s largest hedge fund and their current CEO stepped down in a recent memo. Former CEO David McCormick is planning on running for a US Senate seat. Stepping into the leadership role will be Nir Bar Dea and Mark Bertolini in a shared leadership role. Bridgewater has had three different CEOs since Ray Dalio stepped down in his capacity as chief executive. Bridgewater gained a cult-like following for its radical transparency in the financial world where individuals rate and score their co-workers. Bar Dea is a relatively young executive in the hedge fund industry, but the pairing is seen as complementary in their shared CEO role. Bridgewater manages over $150 billion in pensions.

FINSUM: Hedge funds made a huge splash in 2021 by avoiding a lot of public turmoil and investing privately, we’ll see if that trend and those returns continue in 2022.