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Employment, Stimulus, and Rising Prices

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The dynamic of employment changed dramatically because of the pandemic and the stimulus provided to consumers as a result.ww

People were let go from their jobs, especially jobs that didn’t have a way to “work from home”. Factory jobs and jobs in the service industry, for example.

Government Intervention

To combat a declining economy and unemployed workers struggling to make ends meet, the government decided to inject liquidity into the market. They did this through increased unemployment benefits and stimulus payments to those that qualified.

This aid sent to consumers helped out a lot of people, but it didn’t entirely go according to plan. One of the intentions of the stimulus payment was to incentivize people to spend – that’s why a large number of the second payment came via a Visa gift card.

When people spend, the economy does better.

Unfortunately, people saved their stimulus payments, but thankfully the market and the economy didn’t suffer as a result.

Rising Prices

That leads to the predicament we could soon find ourselves in. The economy is doing better. The majority of the United States population has been vaccinated (just a reminder that a majority is anything over 50%). Daily life is starting to return to normal; it’s happening slowly, but we are trending in the right direction.

As people grow more confident in their ability to go out into the world, and they get more confident in the economy and the market, they’re likely to spend some of that savings.

Low rates, decreasing unemployment, and more spending are three legs to likely inflation pressures.

Inflation

Now, I know I wrote about inflation pretty recently (here), but I feel it’s necessary to beat that drum again.

The FED already said that they will be more liberal when it comes to monetary policy. That means they will be more likely to let inflation run hot (relative to their 2% inflation target) for an extended period of time.

What they are doing with that stance, is they don’t want to kill a recovery when it’s just getting started. That’s what happened in 2018 when they raised rates throughout the year, but that increase in interest killed the economic growth and popped a bubble.

Okay, so the recipe for inflation is set, but what does that mean for me?

Honestly, that’s hard to say. We already said that inflation is likely, and in some cases, it’s already here. The question is, how much inflation is too much? This question will be answered by the FED.

And the answer will show itself when they relax their easy monetary policy. Interest rates could go up and the FED’s balance sheet could reduce in size.

At that point, I believe it’s only a matter of time (my hunch is not a lot of time) until the bubble we’ve created pops.

If you’re invested for the long haul, hunker down and hold steadfast. Avoid panic selling. If your time horizon is shorter, soon may be a good time to take some profits and de-risk your portfolio.

Disclaimer

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

What You Need to Know About Solo 401(k)s

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solo 401k

If you’re looking at retirement account options, a solo 401(k) isn’t always on your radar. However, it could be a good choice for a range of professionals, suggesting you’re eligible to open one. If you’re curious about this retirement option, here’s everything you need to know about solo 401(k)s.

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Inflation, Gold, Semiconductors

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There are a lot of moving parts in the economy right now. Inflation has become a concern, people are looking at gold more as a hedge, and there’s a shortage in semiconductors. In this piece, we’ll explore some of those dynamics and what some of the investment implications are.

Inflation

Inflation will most likely increase. Many projections estimate the FED will meet/beat their target of 2%.

I do believe that an increase in goods and services will not affect demand as it would have in the past. Stimulus payments to consumers created enough excess cash that people didn’t mind, or even notice, an increase in prices.

I do realize I’m painting with a broad brush here, and undoubtedly there will be some that will notice the difference. I’m simply stating that demand will not suffer from price creep as it used to, at least while the government continues writing checks.

Gold

We could see another uptrend in gold. There’s a certain recipe that makes the case for a bullish perspective on gold – inflation pressures, increased money supply, and low-interest rates.

The FED continues to supply the market with liquidity with its asset-buying program. An increase in the money supply dilutes the value of the dollar (USD). When the USD decreases in value, typically gold does well.

There is a caveat to that, however. Demand for US Treasury securities is weakening, specifically from foreign investors. To double down on that, foreign investors are net sellers of Treasuries. There have to be enough buyers to meet Treasury issuance, otherwise, the FED won’t have enough “reserves” to inject liquidity into the system.

With regard to low rates, that is a good sign for gold, but it’s also a good sign for equities (companies) with a high tendency to borrow. I’m mainly looking at the technology sector. Especially these unicorns that have high valuations, but low (or negative) profits.

Semiconductors

There’s also a current market disruption at play here…semiconductor shortage. Demand across many applications are at multi-year, sometimes multi-decade, highs. Personal computers, electric vehicles, autonomous vehicles, AI, and the like all use semiconductors.

A semiconductor shortage has many implications:

  • Decrease in production
  • Price increase
  • Nationalist mentality
  • R&D disruption

A decrease in production can hurt the bottom line. It all depends on when the shortage ends. If production reduces enough for a sustained period, adjustments will have to be made by corporations.

A price increase is likely because of supply and demand dynamics. The price of semiconductors will go up, so the price of the products they’re used in will also go up. This could hurt demand for those products and could hurt consumers.

There are a select few companies that supply the majority of the world’s semiconductors. This could have a similar effect as Covid had with regard to supply chain management. Companies relied on global trade and cooperation to sustain their supply chain operations. When countries shut down due to the pandemic, global trade suffered as a result. Countries might shift to manufacturing their own semiconductors instead of relying on supply from trading partners.

Semiconductors are only getting less expensive and more efficient. With a shortage, and possibly less money coming into the manufacturers, it’s possible that this dynamic of cheaper and better plateaus…at least temporarily. It’s also possible that the shortage improves operations and makes the manufacturers more agile. Some countries have a very unique ability to progress, strengthen, and adapt when a roadblock presents itself.

With that said, I believe semiconductors will be a great investment opportunity. Their demand is only going to increase because of the push to provide the world with electric vehicles and clean energy. I would, however, pay attention to the shortage and I might wait until that shortage ends and prices stabilize.

Related reading:

Does Economic Inflation Favor Borrowers or Lenders?

Is Gold a Good Investment?

What You Can Learn from Different Market Environments

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Here’s What Your Children Know About Investing That You Don’t

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what your children know about investing

While younger generations often get a bad rap when it comes to how they handle their finances. A decent portion of that reputation is underserved. In fact, on occasion, younger investors are savvier than their older counterparts. Causing them to make better choices than their parents. If you are wondering what your children know about investing that you don’t. You should keep reading.

Dodging Fees and Other Costs

Overall, younger generations are more fee and cost-conscious than older ones. They don’t just understand that investment-related expenses can hinder their progress. They also know how to find information about the associated fees.

Millennials and Gen Z aren’t afraid to get online and dig into the fine print about what various brokerages or investments will cost them. Additionally, Millennials are particularly value-driven. So they look for opportunities to save whenever they exist.

Thanks to the rise of low-cost robo-advisors, many younger investors have learned that high fees aren’t something they have to accept. That isn’t necessarily true of many older investors, particularly those that have been using the same approach for years, if not several decades. In the latter case, the investors simply settle into the status quo, and that can be costly in the long run. With the former, it’s all about finding the best value, ensuring that more of their money works for them instead of going to fees.

Investing Isn’t Just for the Rich

Investing is often touted as a pathway to long-term financial success. However, outside of retirement plans, a reputation of investing just being for the rich arose. In some cases, this was initially true, as getting access to a broker wasn’t an option for lower-income households. The issue is that the idea remained even as that became less and less of the case.

That myth that investing is only for the rich is often more pervasive among older generations than younger ones, causing some households to shy away from investing outside of retirement plans. Younger generations know that investing is something anyone can do. App-based robo-advisors are an expression of that fact, as they give people a quick, easy way to get started.

Plus, information about investing is usually only a few clicks away, either in the apps or online in general. For Millennials and Gen Z, this further demystifies investing, making it feel even more accessible.

Downturns Can Be Opportunities

During the early days of the coronavirus, stock markets tumbled. Many companies that were classically viewed as solid – and financially inaccessible from a stock-buying perspective – saw the price of their shares drop.

For younger investors, the downturn wasn’t just a crisis; it was an opportunity. Some investors who previously couldn’t afford to purchase certain stocks suddenly could, so they hopped on board with companies they believed would ultimately recover.

Older generations didn’t always view the situation similarly. The closer you get to retirement, the more you tend to focus on portfolio value preservation. In some cases, this led investors to abandon companies that were experiencing hardship, even if the odds of that hardship persisting were relatively low.

Investing Doesn’t Have to Be a Taboo Subject

For many older generations, the idea of having genuine conversations about money isn’t appealing. Money is often discussed in hushed tones, viewed as one of the most private topics in a person’s life.

Millennials and Gen Z don’t necessarily see it that way. Many younger people are comfortable with sharing details about their lives with the masses, thanks to their comfort level with social media. As a result, they aren’t averse to learning about and discussing investing with their peers, something that can work in their favor.

By being open to talking about money and investing, members of younger generations learn from each other. They can find out about mistakes their peers made and opportunities that were seized. The odds of them being pointed to valuable informational resources may also be higher.

Now, it is true that this can also lead to trouble. After all, not all information is accurate or reliable, so it can lead to the spread of misinformation, too. However, treating the topic as if it isn’t taboo is something that older generations could benefit from, as it can create openings for learning from others, getting support, and, ultimately, making better decisions.

Can you think of anything else young children know about investing that you don’t? Share your thoughts in the comments below.

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Editors Note: If you want more on this topic, consider reading Andrew Adam’s Behaviors Of A Millionaire, it’s got a thorough discussion on evaluating securities, which is helpful if you’re looking at selecting individual stocks.

Should You Invest in Mobile Homes?

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Mobile homes get a bad rap, but they could really be a good place to invest money. Investing in real estate is a good way to diversify your portfolio. Mobile, or manufactured homes, could be a good little niche in that sector. Should you invest in mobile homes?

What is a mobile home?

Mobile homes, also known as manufactured homes, are residential structures built in a factory or separate location and moved to the desired location. These homes are built according to HUD guidelines.

Those guidelines are as follows:

  • Design and construction
  • Strength and durability
  • Transportability
  • Fire resistance
  • Energy efficiency
  • Overall quality

Why invest in mobile homes?

Social stigma around mobile home parks prevent people from investing in them

Investing in individual mobile homes is difficult because the people that rent them are a (and I’m making a big generalization here) a challenging bunch to deal with. Invest in the grounds and infrastructure where the mobile/manufactured homes are.

There are several benefits to investing in mobile home parks:

  1. Recession-resistant (held up through the GFC)
  2. Tenants rarely leave, but sometimes, evictions are necessary (as they are with any real estate endeavor)
  3. Supply is waning, demand is increasing
  4. Predictable maintenance costs
  5. Stigma reduces competition with other investors
  6. Great financing options
  7. Limited need for contractors
  8. They’re inexpensive (you can buy individual units to rent on your property for less than $10,000 – depending on the area and demand)

(List provided by BiggerPockets)

Conclusion

As I mentioned in the beginning, investing in real estate is a great way to diversify your portfolio. It can also be a good way to get a return on your money.

Within the real estate sector, mobile home parks can be a very good niche, for the reasons I mentioned above. Should you invest in mobile homes?

Related reading:

Why Financial Literacy is Important

How to Invest in Real Estate without Getting your Hands Dirty

Hard Money Loans: Benefits for Real Estate Investors

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

What Should I Do With the Next Stimulus Check?

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next stimulus check

With the new COVID relief bill passed by Congress and signed by President Joe Biden. Many Americans have stimulus checks on the way if they aren’t already in hand. However, figuring out what to do with the money can be surprisingly tricky. Particularly if you have some conflicting needs. Luckily, it is possible to choose the best path for you. If you aren’t sure where to begin. Here are some options for what to do with the next stimulus check.

Handle an Urgent Need

If you have an urgent financial need, such as issues buying enough food for your household or past-due utility bills, using your stimulus check to handle those costs is your best bet. It ensures you can continue to live without undue hardship, and that’s important during this pandemic recovery period.

Additionally, if you have secured debt – like an auto loan – and you’ve fallen behind on payments, putting the asset at risk of seizure, it may be a solid target. By catching up, you may be able to avoid the repossession or foreclosure. Depending on the asset involved, that might be crucial.

However, before you send stimulus money toward any bill, you may want to see if there are other programs available that may reduce that burden. For example, utility companies, mortgage lenders, certain state or county offices, and many other organizations have relief programs to help those who are struggling due to the pandemic. If you’re eligible for their assistance, don’t hesitate to use it. Then, you can direct your stimulus check toward other needs.

Pay Your Taxes

If you have filed (or are about to file) your federal taxes and owe money to the IRS, using your stimulus check to handle that burden isn’t a bad idea. Unlike for the 2019 tax year filings, the IRS isn’t postponing 2020 tax filings this year. If you want to avoid fees and interest, then you need to pay what you owe in full by April 15.

Even if the stimulus check only covers part of your obligation, using it to handle some of your taxes reduces this total burden. Then, if you need to enter into a payment plan with the IRS to address the rest, what you’ll need to pay could be easier to shoulder.

Create an Emergency Fund

If you don’t have any cash – or very little money – set aside in an emergency fund, using your stimulus check to get one started is a good idea. It’s wise to have a little cash available for unexpected events, something that the pandemic made abundantly clear for many.

Ideally, you want at least $1,000 set aside initially. Then, you can work your way up over time, aiming to save a minimum of three to six months’ living expenses.

Pay Down High-Interest Debt

Using your stimulus check to tackle high-interest debt is always a good idea. Not only will it reduce the amount of money you’ll pay over the life of the debt, but it could potentially boost your credit.

For many people, starting with high-interest credit cards is the best way to go, especially if the cards are close to being maxed out. However, for others, a high-interest personal loan could also be a good target.

Finally, if you have a payday loan, focusing on that might be your ideal option. Payday loans usually come with astronomical interest rates, making them a wise debt to tackle with stimulus money.

Boost Your Retirement Savings

By using your stimulus check to boost your retirement savings, you not only do something to help secure your financial future, but you may also get a tax benefit. You have until April 15, 2021, to finish up your 2020 retirement investing. If you contribute your stimulus to a tax-advantaged account, you might be able to lower your 2020 tax burden.

However, you can also use the money for your 2021 retirement savings. You may be able to get a jump start on it or even fully fund an IRA, depending on how much you receive in your stimulus check.

Handle a Large Purchase

If you have a solid emergency fund, fully funded retirement accounts, no high-interest debt, and have your financial house otherwise in order, then using your stimulus check for a large purchase is certainly an option. It may give you the ability to buy high-cost items in cash, allowing you to potentially avoid high-interest debt.

Even using stimulus money to fund a vacation can be a smart move if you’re in good financial shape otherwise. Again, it lets you avoid the need for debt and could give you something fun to look forward to once you feel comfortable traveling.

Invest, Invest , Invest

If you want to put your stimulus check to work but already have a fully-funded retirement account, then you could always invest separately. There are many options that can help people get started, including full-service brokers, robo-advisors, and anything in-between.

You will need to do some research if you don’t currently have an investment account, ensuring you choose the right brokerage for you. Additionally, if you aren’t sure where to invest the money, you might need professional guidance or to conduct more research.

In many cases, focusing on individual stocks isn’t wise for beginners. Instead, options like index funds may be a better bet, as they come with an innate level of diversification.

Save Money for College

Whether you have children or may go back to college yourself, setting your stimulus check aside in a 529 college savings plan could be a smart move. It lets your money grow tax-free, and any withdrawals you make for qualifying expenses aren’t taxed either. In the end, this option can help make college more affordable, allowing you or your child to potentially avoid or reduce the need for costly student loans.

Do you already have plans for your next stimulus check? Share your thoughts in the comments below.

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Crypto, Reddit, Stock Market Thoughts

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The last couple of weeks have been crazy in the stock market. With Reddit putting a short squeeze on Wall Street, crypto assets going gangbusters, and speculation about what inflation will do in the near future, there’s a lot to talk about.

Reddit vs Wall Street

Gamestop and AMC Entertainment are the two biggest names when we talk about Reddit investors.

A large number of shorts were put in by hedge funds and other big players on Wall Street. A specific Reddit account “recruited” its following to pile into the two companies named above. This group of “retail” investors drove the stock price up (as well as other investors that caught wind of their efforts).

Those hedge funds were forced to cover their shorts so they didn’t lose more money. The stock price for those two companies plummeted in the following days, but that doesn’t negate what Reddit did – they beat the big guys.

What’s a short?

A short is a type of trade. What you do is you borrow shares of a stock at a specific price in hopes that the stock price will drop. If it does, you buy back those shares at a lower price and collect the difference.

For example, if you bought shares of XYZ company at $20 and the share price of XYZ drops to $10, you would cover your short and earn $10 per share as a return.

It’s not for the faint of heart because stock prices effectively have no ceiling, so you could lose A LOT of money.

Crypto

Cryptocurrencies gained traction over the last few years as investors saw potential. After Bitcoin rose to $20,000 per BTC and crashed, it lost its allure.

Social media brought it back, thanks to Elon Musk. Slight changes in his Twitter bio moved the needle very effectively. Bitcoin is now hovering at $50,000 per BTC. Tesla invested a healthy sum in Bitcoin and will now accept payments in Bitcoin.

I believe other companies will adopt this policy and we will see Bitcoin used for purchases more regularly. There is a place for cryptocurrencies in this world, but it’s uncertain what kind of role it will play.

Short-term Thoughts

I go through quite a bit of research each week to get an idea of what the market environment looks like, what the economy is doing, and where there are risks and opportunities in the market.

With that said, the amount of times I’ve read the word “bubble” is alarming. The comparisons to the Dot Com Bubble and the Great Financial Crisis (GFC) are also a cause for concern.

Pundits are using the word “euphoria” more often.

There are a few things to pay attention to:

  1. The divergence between the stock market and the economy. Typically, near the end of the business cycle, a difference between how the market is doing and how the economy is doing grows. Eventually, things will revert to the mean. That’s to say, the difference between the two will shrink.
  2. Inflation. The Biden Administration is taking a different stance from past presidents. Inflation and overstimulation of the economy were areas of concern. President Biden is taking the other side of this argument, saying that he’d rather do too much, than not enough. Look for increased stimulus and less regard for inflation. If inflation starts to run hot, expect the FED to cool it down somehow.

Conclusion

Short-term policy changes and speculative movements in the stock market have little to no impact on the long-term performance of your portfolio. The one thing that really moves the needle is your behavior and how you respond to the news.

If you keep your long-term perspective in mind and keep your emotions in check, you should fare better than those that don’t.

Related reading:

Why Financial Literacy is Important

What You Can Learn from Different Market Environments

Some of the Practical Methods to Make Money Through BTC in 2021

 

*Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Top 5 Wealth Management Platforms

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Wealth management firms rely on platforms to provide accurate, quick, and efficient advisory and wealth management services to their clients. The market is flooded with many wealth management platforms, each claiming to be the best platform offering advanced and unique features. It is impractical and time-consuming for wealth management firms to test each wealth management platform available in the market to determine the best and most capable platform. We have tested many wealth management platforms and solicited reviews from various wealth advisory firms using different platforms to determine the top 5 wealth management platforms. Wealth advisory firms rely on platforms to provide accurate, quick, and efficient advisory and wealth management services to their clients. In this article, we will discuss the pros and cons of each platform. Let’s check out and review our list of the top 5 wealth management platforms.

1- AdvisorEngine:                                                                       

Pros:

  • Digital Onboarding
  • Client Portal
  • Personalized wealth planning
  • Compliance + Investment and Risk management framework
  • Trading & Rebalancing Portfolios with tax optimization
  • Reporting

Cons:

  • Only supports TD Ameritrade, Pershing, Fidelity, Charles Schwab Custodians

AdvisorEngine ranks first in our list of the top 5 wealth management platforms due to its all-in-one nature and cutting-edge features, empowering not only the wealth advisors but facilitating the clients as well. The customer support reviews show it to have a high-level of customer satisfaction, especially with their CRM Junxure.

Wealth advisors can start their client onboarding journey digitally, allowing for paperless and quick account-opening experience to clients. We were especially impressed with the client portal which provides a very modern look and allows clients an easy and quick real-time overview of their accounts so they can stay informed about the latest positions of their accounts.

One of the hallmarks of AdvisorEngine is that it lets wealth advisors configure the investment framework according to the clients’ needs. Wealth managers and advisors can implement their own strategies or choose time-tested strategies.

With the information gathered by AdvisorEngine’s customizable questionnaires, wealth advisors can automate the profiling of clients and simplify the process for prospective clients. AdvisorEngine, then, recommends portfolio construction based on the responses of the clients. They are one of the few options we saw that had a complete end to end platform and robo advisor technology.

With AdvisorEngine, wealth managers can ensure that the portfolio management of individual clients complies with the established risk framework. Compliance reporting is significantly simplified.

The portfolio rebalancing feature of AdvisorEngine is fairly robust. AdvisorEngine’s automated portfolio rebalancing tools make it easier for wealth advisors to rebalance the portfolios with just a few clicks without making a significant change in the market value of the assets that can result from rebalancing large portfolios.

Wealth managers can create tax-optimized portfolios for their clients irrespective of the size of the portfolio or the type of client, resulting in higher net returns on investment. With the detailed analytics and reports, wealth managers can analyze the returns, rebalancing requirements, and tax optimization of portfolios, helping them to make the necessary adjustments in asset allocation.

The reporting features of AdvisorEngine offer dynamic and interactive dashboards and present data in a clear and easily understandable way. Clients can access their portfolio data including transactions, holdings, risk-return metrics, forecasting, and performance data. The reporting feature also allows wealth managers to set up firm level reporting, which includes client performance, billing, digital onboarding, portfolio details, revenue attribution, etc.

One of the strongest pieces is that it’s an open technology platform, with robust integrations and the ability to plug into any other tools. The custodian list was fairly strong, covering Fidelity, Pershing, TD Ameritrade and Charles Schwab. The only downside of the platform is if you happened to not have a supported custodian.

2- Oranj:                                                                                     

Pros:

  • Advisor Dashboard
  • Client Portal
  • Portfolio Management
  • Rebalancing & Trading
  • Tax optimization

Cons:

  • Limited compliance functionality

Oranj ranks at number two on our list of top 5 wealth management platforms. The platform provides advanced features that make it a very capable wealth management system. With Oranj’s wealth advisor dashboard, wealth advisors can perform client management functions like connecting with clients, browse the contacts and see their financial goals and net worth, manage accounts, and monitor investments. The client portal provides clients real-time access to their accounts where they can view detailed reports about the performance of various assets. The portfolio management function of Oranj provides insights and analytics to help track, monitor, and optimize the portfolios. The platform also provides notifications in case the portfolio drifts from the target. The platform’s risk management functionality guides wealth advisors on risk associated with the portfolio, allowing managers to take corrective actions.

The rebalancing and trading feature of the platform empowers wealth managers to bring back the portfolio to balance with a few clicks, thanks to the automated and easy-to-use account rebalancing functionality of the platform. Account aggregation and tagging features help wealth advisors to select the common accounts and perform rebalancing operations easily. The rebalancing can be done on all sorts of accounts and portfolios irrespective of size and type.

Though Oranj is a capable wealth management platform, it lacks in the compliance department. It is critical for wealth managers to comply with the organization’s thresholds and regulatory requirements, which ensures the protection of client’s interests and saves the portfolio from disastrous losses.

3- RIA in a Box:                                                                       

Pros:

  • Compliance
  • Risk assessment tools
  • Annual review tool

Cons:

  • RIA in a Box is centered on risk assessment and compliance:
  • No portfolio management functionality

RIA in a Box is a platform for wealth managers that is focused on compliance and risk assessment. The company provides compliance packages to private fund advisers with an option for registration with state or SEC. Other than that, the company’s private fund platform features include monitoring fund inventory, access to tailored risk assessment tools, compliance updates on mandatory documentation like Form ADV, Form PF, Form D, Blue Sky Filings, etc.

The company does not offer any of the robust wealth management tools such as portfolio management, client portal, trading and rebalancing of portfolios, tax optimization, customer relationship management, etc, which are of utmost importance in a capable and efficient wealth management platform. However, if you are a (RIA) private registered investment advisor looking for registration with the state or SEC, you might find the services of the company useful in complying with the documentation needed for successfully completing your registration.

4- Dorsum:                                                                               

Pros:

  • Portfolio management tool:
  • Client Reporting
  • Investment Profile
  • Risk management and Compliance

Cons:

  • Difficult to do Portfolio rebalancing

Dorsum ranks fourth on our list of the top 5 wealth management platforms. Due to the platform’s easy integration, it’s built for wealth management companies, private banking departments, and portfolio & wealth managers. The platform offers many advantages that portfolio managers want in a wealth management platform.

Wealth managers can manage multiple portfolios of different clients due to the smart portfolio management tools offered by Dorsum. Using different models, wealth managers can automate the process of portfolio management, which helps wealth managers to focus on advisory functions instead of managing the portfolios.

The interactive client reporting portal equips clients with a powerful analysis tool where they can monitor their accounts and download various reports with just a few clicks from their smartphones or laptops. The clients are grouped into various categories based on their investment profiles. Investment profile of a client is made after getting the client’s responses to a risk questionnaire and the client’s financial objectives.

Risk management is done automatically using the Dorsum wealth management platform, which prompts the wealth advisor about any breach of the risk management limits. The platform also facilitates wealth advisors in meeting the statutory regulatory limits imposed by the regulatory authorities.

One drawback with Dorsum wealth management platform, however, is that it doesn’t offer automatic portfolio rebalancing, which is often time consuming and inefficient when done manually. Dorsum is an EU company based in Hungary so there might be some delay in getting support.

5- Temenos Infinity Wealth:                                            

Pros:

  • AI and Analytics
  • Market data management
  • Portfolio management
  • Customer relationship management

Cons:

  • Client reporting
  • Portfolio tax optimization

Temenos Infinity Wealth ranks fifth on our list of top 5 wealth management platforms. The artificial intelligence and analytics embedded in the platform allows wealth managers to accurately craft portfolios based on the clients needs, backed by the data, with minimum human intervention. The analytics feature shows detailed analysis, helping wealth managers to evaluate the performance of the portfolio and identify areas of improvement.

With the help of a market data management module, wealth advisors can obtain precious data about the stock, bond, or other markets, enabling wealth advisors to make informed decisions keeping in view the latest and expected investment environment of the markets.

Like all other wealth management platforms we discussed, Temenos Infinity also provides automated portfolio management features to the wealth advisors. Wealth managers can focus on new customer acquisition and advisory roles due to the automated portfolio management function of Temenos Infinity’s wealth management platform.

The platform has an added customer relationship management module that offers wealth managers additional features of client management. Using the customer relationship management function, wealth managers can have a bird-eye view of the customers, sort the customers based on the common attributes, communicate with clients seamlessly without having to manually input the customer contact details.

Although the wealth management platform by Temenos Infinity is well built, It lacks efficient client reporting and portfolio tax optimization features. Client reporting feature allows customers to view and download different reports related to their accounts, which increases customer satisfaction and is considered an essential feature in wealth management platforms.

Also, the lack of a tax optimization feature which helps wealth managers generate extra returns by optimizing portfolios for tax. The extra return so generated can make a big difference in the long run for clients, improving the performance of the portfolio returns.

Why There is a Need for Investing in Renewable Energy Projects

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Renewable energies are sources of clean, inexhaustible, and increasingly competitive energy. They differ from fossil fuels principally in their diversity, abundance, and potential for use anywhere on the planet, but above all in that they produce neither greenhouse gases – which cause climate change – nor polluting emissions. Their costs are also falling and at a sustainable rate, whereas the general cost trend for fossil fuels is in the opposite direction despite their present volatility.

Clean Energy Is Increasing Popular

Growth in clean energies is unstoppable, as reflected in statistics produced in 2015 by the International Energy Agency (IEA): they represented nearly half of all new electricity generation capacity installed in 2014, when they constituted the second biggest source of electricity worldwide, behind coal.

Clean energy development is vital for combating climate change and limiting its most devastating effects. 2014 was the warmest year on record. The Earth’s temperature has risen by an average 0.85 °C since the end of the 19th Century, states National Geographic in its special November 2015 issue on climate change. Meanwhile, some 1.1 billion inhabitants (17% of the world population) do not have access to electricity. As such, one of the objectives established by the United Nations is to achieve to access to electricity for everyone by 2030, an ambitious target considering that, by then, according to the IEA’s estimates, 800 million people will have no access to an electricity supply if current trends continue.

The transition to an energy system based on renewable technologies will have very positive economic consequences. According to the International Renewable Energy Agency (IRENA), doubling the renewable energy share in the world energy mix, to 36% by 2030, will result in additional global growth of 1.1% by that year (equivalent to 1.3 trillion dollars), an increase in well being of 3.7% and in employment in the sector of up to more than 24 million people, compared to 9.2 million today. It will also significantly reduce air pollution.

Considering the importance of energy sustainability, the gravity of climate change and its impact on our planet, and the prospects for economic growth an increase in renewable energy can have, a transition to a system majorly operating on renewable energy is not only desirable but absolutely required.

RE Royalties and the Green Investing Revolution

That’s why Bernard Tan started RE Royalties. His goal was to help build renewable energy projects faster through innovative royalty financing, while leading the way for socially conscious investors. Many of RE Royalties’ clients have great project opportunities, but are too small to secure traditional financing to fund their growth plans. Typically, these projects need $1M – $20M in financing and want to maintain ownership of their assets.

While the royalty business model is well-proven and the renewable industry is not new, the combination of the two is very innovative. RE Royalties is the first royalty company to focus solely on the renewable energy sector. They provide capital in the form of a cash payment or loan, in exchange for a percentage of future revenues from operating projects. RE Royalties’ clients retain 100% control of their assets and businesses, and there are no restrictions on how the funds are used.

“The capital we provide can be considered an “advance” to our client, and the periodic percentage payments can be considered “royalties” to our investors, explains Bernard. We call it Renewable Energy Royalties.”

The idea for the business came when Bernard was working with a local clean technology company to help with their financing. The company had a promising technology that looked to harness the kinetic energy from tides and canals to generate clean electricity.

Not only did they have the technology to generate clean renewable electricity from an unlimited resource, but they also had an established development partner, the government was waiting to provide them with permits to install at various sites, and a long-term revenue contract to buy the electricity at a very high price. The only stumbling block was raising capital.

RE Royalties was started to create an alternative and an opportunity to make a difference for future generations. Bernard then contacted Peter Leighton, who was experienced in the renewable energy sector and joined the company as co-founder.

RE Royalties officially launched in January 2016. In March 2016, the company closed it’s first deal and acquired it’s first royalty in British Columbia, Canada.

Since then RE Royalties has built a portfolio of royalties in Canada, the United States and Europe. These long-term royalties are on over 400MW+ of solar, wind and hydro projects that are currently in operations or will be in the near-term. These projects play a significant role in combating climate change, as they will displace over 300,000+ tonnes of carbon per year from entering the atmosphere.

The company also announced a Green Bond offering, which allow participants to align their investments with their values while earning a fixed 6% return. Green Bonds are an exciting opportunity for socially and environmentally conscious investors who want to ensure their investments are helping fight climate change.

In contrast to buying shares and owning a piece of the company, RE Royalties Green Bonds are a loan from the investor to the company to be used exclusively for investing in renewable and sustainable energy projects.

Learn more about RE Royalties Green Bond offering here: https://www.reroyalties.com/green-bonds

Image source: Cafe Credit.

The FED, The Dollar, and Opportunities

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My post for today was supposed to be a personal reflection, but in lieu of that, I’m going to lay out my thoughts on the market and the economy. Which includes the FED, the dollar, and inflation. In addition to that, I want to explain where I see risks and opportunities right now.

The dollar

We can expect the Federal Reserve to continue an accommodative monetary policy. They will invest in the fixed income market and they’ll resume the low-interest-rate stance.

If they continue this response to the Covid crisis, the dollar should go down in value. There are some risks and opportunities that arise if that happens.

Gold and cryptocurrencies should increase in value. A devaluing in the dollar is, normally, the right landscape for “alternative currencies” to do well.

International securities, especially emerging markets, do well when the value is priced lower. A large majority of international transactions take place using the USD. The value of their home currency goes up in relation to the USD.

The technology sector also has a negative correlation to a falling dollar. When the dollar goes down, that sector tends to outperform.

If the dollar, indeed, goes down look at these areas for possible investment opportunities.

The FED

As I mentioned earlier, the FED will continue to create an accommodative environment for the economy…until they don’t.

At some point, the recovery will gain momentum. GDP will go up and the population will gain confidence in that recovery. At this juncture, inflation will pop onto people’s radars.

If inflation runs too hot, the FED could possibly stop, or reduce, QE. They could halt the bond-buying program and they could raise rates. If that happens, keep your eyes out for a pullback.

We saw this happen at the end of 2018. The FED started raising rates until they went too far, and we had a 20%-25% decline in Q4. Then they reversed course and began easing again. We had a run-up in the market until March of 2020 when Covid hit.

Long term

I believe tech and healthcare will be the two sectors to watch over the next decade or more. With technology getting more advanced every day, investment opportunities will present themselves in these two areas.

Green energy, especially with the incoming administration, is also an industry with big potential. Technology will play a large role in the advancement of renewable energy.

My biggest concern

And I’ll preface this by saying I’m concerned because I truly don’t know the implications of it. MMT looks as likely as ever at this point.

The favorable stance by the FED plus the democratic party holding the House, the Senate, and the Presidency leads me to believe printing money is going to pop off.

An aggressive agenda to provide relief for Americans struggling because of Covid, a push for expanded Medicare/Medicaid benefits, possible student debt relief, as well as other initiatives.

It appears that reducing the national debt is not a concern. To be fair, it wasn’t a concern for the Trump administration either.

The bill comes due for everyone, and if other countries (namely China) are no longer buying US Treasuries like they were, I do not know how we can fund policies, branches, or even service the existing debt. Only time will tell.

Conclusion

I will close by saying that these are my opinions. Granted, I do a lot of research to come to these conclusions, but what I said above are still my thoughts and not foregone conclusions. Do your own research.

Related reading:

How to Beat Inflation with Investment

What Makes Gold so Valuable

 

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