Timing is everything in the market, and investors have a lot of reasons to be cautious in the bond market. A confluence of factors is making it likely that bond yields might jump up in 2022, particularly on longer-duration government debt. This is concerning as bond yields and prices move in the opposite directions so jumping on long-term debt right now could be deadly. For instance, the latest treasury yield rise sent an equivalent of an 800-point Dow Jones plunge in the iShares 20+ Year Treasury ETF (TLT). This is potentially scary as the markets are expecting three 25 basis points hikes from the Fed this year and inflation could also send bond yields rising. Most funds would see between a 1-3% hit on a 30-basis point yield spike.

Finsum: It’s critical to time the market but you might just stay away from long-term bonds, and stay on the shorter end of the duration.

A slew of new technological advancements are coming to Financial services and portfolio management software in 2022. The biggest changes will be modernizing networks, edge computing, and decentralized infrastructure like Web3. This means a lot of financial technology will begin moving to the cloud. In addition, actual payment transactions will take place on the technological device and not through a central network, which improves efficiency and processing speed. This doesn’t come at a big cost either as it’s a more robust and safer technology for payments solutions. Finally, in a decentralized financial industry, anyone can turn their personal capital into collateral and extract yield others can borrow from eliminating financial middlemen.

Finsum: These are wild changes in decentralized finance but undoubtedly a couple of years off, however cloud computing is a game-changer for portfolio management software.

According to a report from Charles Schwab registered investor advisor firms with less than $100 million in assets are improving recruiting efforts as of late. In a poll, it was the fourth listed initiative among RIAs in 2021, up five spots from the previous year. How these new recruiting efforts are delegated is also interesting with a quarter of RIA’s planning on adding relationship managers and 15% looking to add a client-facing management role. Additionally, more than half the firms are also adding back office and admin staff. Talent is an increasingly important commodity in the average RIA firm and many new efforts will be made to obtain it.

Finsum: It will be interesting to see exactly how the details of obtaining new talent come out: whether that’s specific programs or bonus-based incentives.

Bitcoin has stumbled as of late, all the way down to $46,000, but Goldman Sachs isn’t backing off their bullishness and they say the price may double to over $100,000 by the end of 2023. The first of the primary reasons is just the groundswell into digital assets generally. The second big factor is how investors will fundamentally see bitcoin moving forward, as a store of value substitute. They see bitcoin eating away at a stalling gold bouillon. To date, bitcoin only makes up a fifth of the ‘store of value’ market, but that could swing all the way up to a market majority. Other cryptos could also jump in to take some of the markets as well.

FINSUM: As Fed uncertainty lingers, investors are going to push themselves more into alternatives to hedge inflation and interest uncertainty and maintain a store of value.

Word had spread weeks ago that Franklin was in a position to acquire O’Shaughnessy Asset Management (OSAM), but that deal has finalized this week. OSAM will be a bolster an already growing separately managed accounts segment which stands at $130 billion AUM already. However, the big headline is the value-based investing and custom indexing that OSAM provides. The custom indexing platform OSAM owns known as Canvas has grown rapidly and doubled its aum in the last year hitting $2 billion.

FINSUM: This is another headliner deal in direct-indexing. What’s most notable is that many of the deals are coming through acquisitions rather than newer ones originating within the firms themselves.