(New York)

If there is a product that looks like it has a great ten-year horizon ahead of it, it might just be annuities. Just like eSports and electric vehicles seem to have a great demographic trend behind them, annuities will ride a wave of retirees into great success. However, that is not the only tailwind. The other is ultra-low interest rates, which have completely upended the role of bonds in a portfolio. They yield very little and have a great deal of risk. Understanding that, annuities have a very interesting role to play, as between the three major types: fixed, variable, and fixed index, they offer a range of options that can help replace bonds. Fixed annuities offer set guaranteed income, variable give banded income but offer some upside, and fixed index work as a hybrid between the two.

FINSUM: Annuities have gotten a bad reputation over the years because of some high fees and bad actors, but product suites have gotten better. They can really round out a client’s need for low volatility income.

(New York)

Imagine you are an advisor at a big brand name broker-dealer or wirehouse. As much as you might gripe about your ever-changing compensation plan or the structures the firm puts in place, one thing you really like is that the logo on your business helps you win clients. Naturally then, losing that logo is a big challenge, both in terms of marketing, but also in terms you one’s own psychology. Therefore, when going independent it is critical to consider the marketing support you may receive. Many RIAs have next to none, or at least not much more than off-the-shelf options. However, some RIAs differentiate themselves through branding and marketing, such as leading investment concepts or customized marketing that empowers each advisor.

FINSUM: This might sound silly, but when considering whether to join an RIA google their name and check the Google News tab. Find key terms on their site (e.g. do they have any trademarked words?) and do the same. The firm’s marketing prowess will quickly become clear.

(New York)

ESG has been getting more and more mainstream, and yesterday it likely took the final hurdle to major acceptance. A top asset manager with almost $1 tn in AUM announced that from here forward, all its new funds would be ESG. The manager is DWS group, which is majority owned by Deutsche Bank. According to DWS, “Sustainability is more than a corporate topic, it’s a society topic and an industry topic”. The move follows UBS’ recommendation last year that investors choose sustainable investing over traditional investing. However, according to some US financial advisors, these kind of moves will come slowly in the US. “There is too much assets tied up in old money and not enough advisor support,” says Jeff Glitterman of Glitterman Wealth Management.

FINSUM: We have to agree with Glitterman here. While BlackRock has certainly been a leader in the US, there is a reason a lot of these big announcements have been coming from European firms.

(New York)

Despite all fears, markets had a fairly strong year in 2020. Why? See the full story on our partner Magnifi’s site.

(New York)

For those paying attention, ESG has had a great run over the last year. While many may feel that in an intangible way, the real world results are strong too, with ESG investments outperforming the S&P 500 by 1.3% in 2020. ESG investment experienced some solid outperformance early in the pandemic because if its natural defensive. Millennials appear to be driving the trend, which seems likely to only increase. More generally, the environment has become a major focus for both retail investors and major asset managers, like BlackRock, which has helped make the sector mainstream.

FINSUM: Our best call for ESG is that it will do great in 2021. The main reason being that the Biden administration is bringing a strong and renewed focus on the environment, which will both awaken public consciousness but also give ESG some favorable regulatory tailwinds.

(New York)

One year ago you could have easily said that brick and mortar retail was effectively dead, or at least had a very bleak…See the full story on our partner Magnifi’s site.

(Silicon Valley)

If you dig under the handful of headlines which have driven financial media during the pandemic, you will find a sub-narrative...See the full story on our partner Magnifi’s site.

(New York)

Goldman Sachs has been one of the biggest bulls on the street so far in 2021. The bank is calling for 6.6% GDP growth and a strong year for the S&P 500. However, in the last week they have been backtracking a bit and pointing out some of the key risks to the economy and market. Whether or not investors like it, Goldman has a very clear risk risk—COVID variants. The bank says that if the new variants make the current vaccine ineffective, then all bets for the market are off. Based on the current science, that seems unlikely to happen. But nonetheless, there are intermediate risks, such as the new variants slowing down herd immunity or making consumers more fearful about going out/spending/the economy, both of which could have unforeseen negative consequences on the economy.

FINSUM: The new virus strains are a big risk. While the current vaccines don’t seem likely to be rendered useless, consumer fear of the new variants could slow down the recovery. Notably, Goldman says its baseline forecasts don’t include any of these eventualities.

(New York)

Annuities have seen a pickup in interest over the last year. At first this was because of the big drop in markets last spring, but as the year progressed annuities picked up steam because of ultra-low interest rates, which effectively rob retirees of income. For those who want rock solid guaranteed steady income, fixed annuities work best. But for many, especially those can afford some risk to the exact of income they will receive, variable annuities can work very well. Most variable annuities have a couple critical features—they allow you some degree of investment selection, if not total control, and they often guarantee your principal (though not interest income). What this allows is higher payouts if the market does well, but still a guarantee you won’t lose your principal. For those who want the safety of an annuity, but still some income upside because of market growth, variable annuities can be a good choice.

FINSUM: Annuities have some strong demand behind them right now and only seem likely to do better as rates stay low and more Boomers enter retirement.

(New York)

The brick and mortar electronics store GameStop experienced an internet fueled rally this January with the stock prices closing at $147 on Tuesday. The surge was primarily driven by the “wallstreetbets” subreddit, an internet message board. Trading on Gamestop was paused 9 times on monday in order to halt the perceived hysteria. Short sellers are nowhere near dropping off despite having a mark to market loss of more than $5 billion. In fact, shorted shares have increased to over 900,000 in the last week which brings their value of the position to $69million. On the message boards one redditor posted screenshots of their own return at over$1000.

FINSUM: Frenzied bubbles are not an exception in markets and are recorded back to the17th century, however the driving force being a small message board on the internet does make this unique. The stock did experience strong growth in the 4th quarter of 2020 in part as response to the release of new video gaming consoles, but this rapid rise has more to do with memes than it does with fundamentals.