Direct indexing, along with ESG and active funds, has been the dominant narrative in 2021, but that could be the case going forward. Morgan Stanley published a report predicting direct indexing to grow by over 300% to a $1.5 trillion industry. Companies like BlackRock, JPMorgan Chase, and Vanguard (among many others) are racing to bring a previously exclusive opportunity to more investors. The biggest advantage is taking advantage of the individual stock ownership by realizing losses for tax purposes, which studies have shown can increase portfolio returns by about 1%. Realize this comes at a cost because this has a more active tilt to it which comes with higher fees and costs. This could be a net benefit as direct indexing costs are about 0.17-0.27 percentage points higher on average and clearing the tax returns.

FINSUM: To the layperson direct indexing is the active wolf in sheep’s clothing, but they take more advantage of tax-loss harvesting than traditional active investing, benefiting their clients.

Biden was expected to come into the presidency with a tough regulation on Wallstreet. However, the snail’s pace with which Biden replaced key financial regulatory figures, hindered the quick change many expected, but now many officials are in place and change is coming. One of the biggest areas of the crackdown will be on stable coins and other digital currency as the federal government views them as systematically risky. Additionally the Biden admin will begin constricting new fintech lenders, who many in the admin see as pseudo-banks without any of the stringent regulation that affects the real banking industry. This is all part of larger changes that will take a more restrictive stance on Wallstreet undoing a lot of friendlier policies from the Trump administration and will include other central topics like climate change.

FINSUM: With many regulators now in place real change could be coming to the street, the tech-related products which are viewed as unregulated to this new administration.

Millions of Americans are reliant on the social security payments as they shift into retirement, and while SSA boosted the amount in checks by 5.9% it pales in comparison to the record CPI numbers. The CPI climbed at a jaw-dropping 6.8% in November, which skims a healthy amount from the bottom line. Another large factor eating at people’s retirement social security is Medicare Part B premiums and are cost-of-living reducer. Medicare Part B premiums will subtract 29% percentage points from the Social security Take home over the next 30-years. Finally, retirees should be wary that their prescriptions are covered by Medicare because otherwise, they will be a hefty retirement expense.

FINSUM: It’s outrageous that social security and other retirement accounts aren’t keeping pace with the actual costs of retirees, and needs to factor into investment decisions.