Many investors have moved off of REITs and they are trading well below their 200-day moving averages. This makes them a value proposition, particularly as volatility starts to rise. Uncertainty particularly around Ukraine and Russia is fueling volatility but its uncorrelated with REIT volatility which gives it a huge risk advantage on top of it all they are more robust to inflation. Two great REITs to consider with great value at the moment are Alexandria Real Estate Equities and Crown Castle International. These REITs have healthcare and telecom exposures respectively which are in a particularly attractive position as healthcare spending is a higher portion of budgets and 5G is exploding.

Finsum: It’s easy to see that alternatives should be seeing inflows given the volatility in traditional equity and bond markets.

2021 was a comeback year for active fixed Exchange Traded Funds. Driving this home was a huge set of inflows as they saw a tenth of inflows globally, many of these came from the US. That trend isn’t stopping as nearly 80% of investors are searching to expand that position in 2022. Many investors see active funds having an edge with global turmoil increasing, as Russia-Ukraine escalates, and there are many macro risks domestically. Additionally, investors are clamoring to buy more ESG ETFs in 2022 as this trend shows no signs of falling off.

Finsum: Markets were messy and pretty hard to predict in the aughts, but active management seems to have a leg up in picking tech growth as well as fixed income winners.

Female advisors are heavily underrepresented in advising, and that's just because the industry fundamentally doesn’t understand how to recruit and retain them. Female advisors represent about a fifth of the industry. The number one way according to research to obtain and retain female advisors is having women occupy leadership positions. Additionally, female advisors want more flexibility stressed in the hiring process. A pipeline strategy with flexibility is a wonderful way to hire more female employees and retain them afterward.

Finsum: Female advisors can click and connect with different sets of clientele and are an underrepresented portion of the financial industry.

Oil demand isn’t diminishing anytime soon, and while Russian Oil companies may suffer from sanctions and political pressure other oil companies are in a position to benefit. Goldman upgraded three oil companies that could capitalize. The first is Diamondback Energy from Texas; they have strong production and great revenues/earnings. Next up was Ovintiv which moved from Canada to the US two years ago but also has strong revenues and a half dozen consecutive quarterly gains in earnings. Rounding out the bunch is Hess which is a hydrocarbon extraction company which will benefit from the elevated prices in its shale search.

Finsum: These options look promising, remember fringe producers really benefit the most on the margins from elevated prices.

The longer equity portfolios experience growth over time the fewer the opportunities there are to realize the losses and take advantage. Actually quant fund AQR called these appreciated portfolio’s a ‘liability’ for tax purposes. One interesting thing they find is that tax preferred passive equity and direct indexing can develop unrealized gains rapidly. It takes only 3 years for direct indexing to have unrealized gains hit 50% of the portfolio value and 5 years for a tax preferred passive strategy. AQR offers an alternative approach, ‘enhanced indexing’ which is a tax-loss strategy they developed that can help investors. If a direct-indexing strategy already has large unrealized gains it is hard to catch up, but the enhanced indexing strategy can still generate losses for tax purposes. Enhanced indexing is the preferred option when a portfolio is already heavily appreciated.

Finsum: Direct indexing and enhanced indexing are both novel strategies in maintaining an ETF like strategy while taking advantage of tax-loss harvesting.