Investing/ Markets

The Three Waves of Investing Advice

August 18, 2022 by Hans Blake, CFA, CPA

Reading Time: 2 minutes

On today’s Intelligent Money Minute, we interview Aaron Klein on the three waves of investing advice. Riskalyze is an investment risk software that powers the world’s first risk alignment platform that is built on top of a Nobel-prize-winning academic framework. During this episode, Aaron mentions the three waves of investing advice over the past several decades. There is some merit in having a financial plan that is goals-based but is it enough to let investors stick to it without understanding their fears?

At Intelligent Investing, we use Intelligrations™ or Intelligent Integrations to make sure that our clients’ goals-based financial plan is integrated with their portfolio and to integrate their portfolio with our clients’ risk tolerance. As Aaron mentioned, we want to transform fearful investors who make bad decisions into fearless investors who make great decisions, and over time improve their financial picture. To learn more about our philosophy, subscribe to our podcasts so you can stay informed.

If you are interested in becoming our next high-net-worth intelligent investor or want to learn more about our philosophy on risk management, click here. We’d be honored to have a brief confidential call or coffee with you to learn about your needs.

Aaron Klein Bio

Aaron Klein is co-founder and CEO at Riskalyze, the company that invented the Risk Number® and empowers the world to invest fearlessly. The company is headquartered in Auburn, California, and serves tens of thousands of financial advisors.

He is husband to Cacey Steward Klein, dad to Spencer (born in South Korea), and Emma and Teddy (born in Ethiopia). Aaron and Cacey cofounded Hope Takes Root, an initiative to use vocational training and life mentoring to change the future for orphans and at-risk kids in Ethiopia. He also sits on the board of Invest in Others.

Dangerous Assumptions in Retirement Pt.1

August 4, 2022 by Hans Blake, CFA, CPA

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On today’s Intelligent Money Minute, we continue our conversation with Morningstar’s director of personal finance, Christine Benz on dangerous assumptions made in retirement. During this episode, Christine breaks down four areas retirees often make dangerous assumptions, hurting them in the long term. In particular, Christine talks about what types of risk to assume in the stock and bond market.

If you are wondering what kinds of risks are in your current portfolio, or where there may be an unforeseen risk you aren’t aware of, consider contacting us for a complimentary call or coffee. If it makes sense, we may perform a complimentary portfolio review for you so you can get an idea of the types and current risk level in your portfolio.

Schedule a short discovery call or meeting

We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

Christine Benz is Morningstar’s director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. She holds a bachelor’s degree in political science and Russian/East European studies from the University of Illinois. Christine lives in the Chicago suburbs with her husband, Greg. She is an avid cook, a political junkie, and a long-suffering Chicago Cubs fan. Follow Christine on Twitter.

Are Non Fungible Tokens (NFTs) a Fad?

July 27, 2022 by Hans Blake, CFA, CPA

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In this episode of Intelligent Money Minute, we interviewed Matt Hougan, Chairman of Inside ETFs on whether NFTs are a fad. Commodities, common shares, and dollar bills are examples of fungible goods, which means they are able to be replaced by another identical item. My dollar bill in my pocket is essentially the same as the dollar bill in your pocket. Non-fungible tokens (or NFTs) are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This makes them quite volatile. NFTs differ from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions. Non-fungible tokens are mostly digital art, but as Matt mentioned there are some potential uses for NFTs (like representing individuals’ identities or property rights). Time will tell which NFTs appreciate and which ones will be worthless.

As a reminder, the views and opinions expressed on the Intelligent Money Minute podcast are those of the interviewee and do not necessarily reflect the views of Intelligent Investing, LLC. Intelligent Investing does not imply any endorsement or approval of any of the investments mentioned on the podcast. This podcast is to educate the public, and the investment strategy and themes discussed may not be unsuitable for investors depending on their specific investment objectives and financial situation.

Our boutique firm serves high-net-worth individuals and families. We would be honored to sit down with you to discuss your investment objectives and financial situation.

We are excited to be interviewing Matt Hougan, and we have several more episodes where we explore the ins and outs of ETFs, bitcoin, and blockchain, so be sure to subscribe to our podcasts to hear all the interviews.

Matt Hougan Bio

Matt Hougan is one of the world’s leading experts on crypto, ETFs, and financial technology. He is the Global Head of Research for Bitwise Asset Management, creator of the world’s first cryptocurrency index fund. Hougan is also Chairman of Inside ETFs, the world’s largest ETF conference. He was previously CEO of ETF.com, where he helped build the world’s first ETF data and analytics system. Hougan is co-author of the CFA Institute’s Monograph on ETFs. He’s also a crypto columnist for Forbes and a three-time member of the Barron’s ETF Roundtable. For more resources from Matt Hougan click here.

How Riskalyze Empowers Investors

July 21, 2022 by Hans Blake, CFA, CPA

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On today’s Intelligent Money Minute, we interview Aaron Klein on how Riskalyze empowers investors. Riskalyze is an investment risk software that powers the world’s first risk alignment platform that is built on top of a Nobel-prize-winning academic framework. During this episode, Aaron resonates with investors stunted by analysis-paralysis and the fears of unknown risk.

There will always be fear out there in the world. The human instinct is to run when we are faced with our fears. At intelligent Investing, we use a 6-month time frame and probabilities to demonstrate to our clients what they can likely expect their portfolio to achieve in the next 6 months. The range includes negative and positive returns, but it is designed to build trust and demonstrate that clients can give themselves permission to stick to the portfolio when things become scary.

As Aaron mentioned, we want to transform fearful investors who make bad decisions into fearless investors who make great decisions, and over time improve their financial picture. To learn more about our philosophy, be sure to subscribe to our podcasts so you can stay informed.

Aaron Klein Bio

Crypto ETFs with Matt Hougan

July 7, 2022 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes

In this episode of Intelligent Money Minute, we interviewed Matt Hougan, Chairman of Inside ETFs on crypto ETFs. Matt Hougan returns to the Intelligent Money Minute podcast to talk about all things in the realm of crypto. During this episode, Matt Hougan talks about the first electronic exchange fund created for cryptocurrency and how it works. Matt understands the natural interest of investors but heeds a cautionary warning to those with little understanding of crypto’s risk.

Like any asset class or new investment, smart investors will not rush into it and ask questions later, but rather spend time in due diligence to understand the benefits, the risks, and the potential.

Matt Hougan Bio

Matt Hougan is one of the world’s leading experts on crypto, ETFs, and financial technology. He is Global Head of Research for Bitwise Asset Management, creator of the world’s first cryptocurrency index fund. Hougan is also Chairman of Inside ETFs, the world’s largest ETF conference. He was previously CEO of ETF.com, where he helped build the world’s first ETF data and analytics system. Hougan is co-author of the CFA Institute’s Monograph on ETFs. He’s also a crypto columnist for Forbes, and a three-time member of the Barron’s ETF Roundtable. For more resources from Matt Hougan click here.

What Rising Interest Rates Mean for Retirement

June 29, 2022 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes

On today’s Intelligent Money Minute, we continue our conversation with Morningstar’s director of personal finance, Christine Benz on the implications of rising interest rates on retirement. During this episode, Christine breaks down the impact of rising interest rates on pre-retirees, and what you can do to prepare in an inflationary environment. In particular, Christine lays out the history of bond valuations in 2022 and their price performance and durations during these inflationary times. Another consideration investors need to make are their time horizons.

As Christine mentioned, be mindful of your liquidity needs and your time horizons. When we develop a portfolio for a client, we keep these two constraints in mind, as well as other factors such as tax location and risk tolerance.

Schedule a short discovery call or meeting

We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

Summary of Fed Chairman Powell’s Comments to Congress

June 22, 2022 by Hans Blake, CFA, CPA

Reading Time: 2 minutes

Today, Federal Chairman Jerome Powell addressed members of Congress to update them on the economy, inflation, and reasons for increasing the federal fund’s rate. Since your time is valuable, I have summarized and paraphrased the 2.5 hour meeting.

Background

As you likely are aware, the Federal Reserve announced that it would be raising interest rates 0.75 percentage points, following its June 14-15 meeting, bumping the federal funds rate to a target range of 1.50 to 1.75 percent.

The Federal Reserve has two mandates: maximum sustainable employment and price stability.

Summary Notes

After watching Federal Chairman Jerome Powell share his comments on inflation before the Committee on Banking, Housing, and Urban Affairs today, here is what I heard:

The Federal Reserve increasing the federal funds rate causes the following:

Demand for interest rate sensitive items to decrease (vehicles/ housing)
Asset prices in general to decrease
Dollar to strengthen

Recent record inflation started before the Ukraine invasion and blaming it solely on Russia is not fair, nor correct.

The Federal Reserve decreasing the federal funds rate does not really affect the price of gas (energy) and food.

Fuel at the pump is primarily driven by two things: 1) prices set globally by large oil producing countries and cartels and 2) the oil refinement spread to convert oil into usable products (such as gas at the pump). Neither is controlled, nor can be controlled by the Federal Reserve.

Employment is extremely tight—meaning that the portion of candidates to available jobs is low and the competition to hire them can be fierce. Chairman Powell said that currently, there are two job vacancies for every one person looking for work.

According to Chairman Powell, the financial conditions and markets have already priced in the future anticipated interest rate increases that the Fed has indicated they will be doing over the foreseeable future. He said that markets are reading the Fed’s response well. According to the schedule, the Fed interest rates will likely be around 3.0% to 3.5% by the end of the year.

Powell, after listening to several Congressmen and Congresswomen share their constituent’s concerns about inflation, had this to say the following which I have paraphrased: Inflation destroys public confidence. We are using our tools and the public should believe that we will get it down to 2% over time. We can help with the demand side and can slow down the demand of goods and services by raising the federal interest rates.

Consumers have healthy balance sheets and continue to spend due to their savings. Consumers make up a healthy portion of our GDP. No one is very good at forecasting recessions and can’t do it consistently.

Conclusion

The Federal Reserve Board and board members have a tough job ahead of them. Their goal is to get inflation under control by dampening the demand for goods and services to allow the supply side to recover post-Pandemic. If they raise rates too high or too quickly, it could send the U.S. economy into a recession. If they don’t do anything, inflation can remain elevated and get into American’s psyche.

To learn more and to listen to our podcast on this subject, click here.

If you are still concerned about your portfolio and how much risk you may have in your portfolio, or whether you are on track to achieving your financial goals, please click here to schedule a no obligation coffee or call with us.

Chairman Powell’s Prepared Comments

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Why Knowing Your Risk Matters

June 16, 2022 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes

On today’s Intelligent Money Minute, we welcome Aaron Klein the CEO of Riskalyze. During this episode, Aaron explains the importance of knowing your risk, and the multiple types of risks investors may need to consider.

At Intelligent Investing, we believe in looking at a clients’ risk in four ways:

Willingness to take on risk (your sleep at night factor as we call it)
Ability to take on risk—how much risk are you able to take based on your balance sheet and income statement.
Need for risk (which comes from the financial plan and your goals and time horizon)
Your portfolio’s risk—We strive to align these risks for our clients in an easy-to-understand risk number that we monitor over time.

If you are interested in becoming our next high-net-worth intelligent investor or would like to learn more about our philosophy on risk management, click here. We’d be honored to have a brief confidential call or coffee with you to learn about your needs.