Money Revolution Book – Richard Duncan

Richard Duncan is once again a guest on our show. Richard is going to explain to us why our economy is hitting a speedbump and why this is the symptom of larger problems. Also his book talks about some remedies that could get us back on track. I love having Richard on the show as he is a wealth of information and wisdom. His book, The Money Revolution was a fascinating read.

While there are definitely challenges ahead, there are also huge opportunities as well... however they might not be what you think. Join us to hear how you can prepare for this next evolution in the economy.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Richard Duncan

Richard Duncan is the author of three books on the global economic crisis, including the international bestseller, The Dollar Crisis: Causes, Consequences, Cures, which forecast the global economic crisis of 2008 with extraordinary accuracy.Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis.He is now the publisher of the video-newsletter Macro Watch, which can be found on his website

Richard's Online Presence:


Today's Panelists

Beware Of Inflation – The Bonus Interview That Will Change Your Life… For The Better.

This is an important announcement... This is a special bonus episode that will thoroughly explain this new inflation trend and the implications for your life. There is a paradigm change happening in the economy and you need to understand it.

Warning... this episode is long and important. This will be the first of many bonus episodes released (future ones will be shorter) discussing the impact of inflation and how to protect yourself. This may scramble your brain a bit and change everything you think you know about the economy, markets and your life. Those of you who are clients are already being briefed about this new trend, but we also wanted to help prepare as many people as possible.

Important: Understanding this trend is the most important thing you can do for yourself and your family. You may not like what I have to say, but after you hear it, you will understand why I am telling you. 

I will be in the guest seat tonight with my friend Douglas Heagren, a College Funding Expert. 

I will be creating an Inflation Survival Guide in the next few weeks. Please let me know if you would like a complimentary copy.

Kirk Chisholm innovative advisory group

"The current inflationary trend is more dangerous to the US than Russia."  - Kirk Chisholm

Click to Tweet


Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show


Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Kirk Chisholm

Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group, an independent Registered Investment Advisor located in Lexington, MA. He has been providing wealth management services to individuals, executives, entrepreneurs, and their families since 1999. He is an outside the box thinker, risk manager, inflation expert, blogger, podcaster, and all-around interesting guy. Kirk is dedicated to developing lasting relationships with all of his clients and their families. One of the benefits of working with Kirk is his patience, empathy, and his ability to provide clear and easy-to-understand explanations to complex financial topics.


Kirk developed a unique philosophy for the wealth management industry called Risk Management First. The medical field has a similar way of thinking of “first do no harm”. This philosophy focuses on risk management for clients in all aspects of their lives in ways the industry does not address. Risk management does not stop with investments. It also requires working closely with other professionals to address areas of their financial lives not currently being met.


In 2008, Kirk co-founded Innovative Advisory Group to address the needs not being addressed by the wealth management industry. It started with specializing in alternative assets held in retirement accounts (i.e. self directed IRAs/401ks). Then the company expanded into the specialization of college funding (i.e. planning, strategy, and paying the least possible for a high quality education), Risk Management First, exit planning for business owners, advanced planning (estate, tax, etc), and providing practice management and leadership training to other financial advisors, accountants and attorneys. 

Kirk's Online Presence:


Investing In Gold For Protection and Profit

Is high inflation keeping you up at night? If not it should. The financial markets are going through a paradigm shift that most people are not aware of. Investing in gold is historically one safe haven you should consider.

If you want to protect what you have and profit along the way George Milling Stanley has some answers for you. Listen to why gold makes sense now vs in the past, how you can incorporate gold into your portfolio, allocations, and different tools. 

If you the markets have you seasick, dont miss this episode.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest: George Milling-Stanley

George is a Vice President and Chief Gold Strategist at State Street Global Advisors’ SPDR ETFs business. Prior to joining State Street, George was a Managing Director at the World Gold Council, where he was a key member of the team responsible for working with State Street Global Advisors to pioneer and launch the world’s first gold-backed ETF. He was integral in crafting the structures and processes required to make gold-backed ETFs functional.Before joining the WGC, George worked at Lehman Brothers where he developed customer business for the precious metals trading desk while being responsible for the firm’s research and analysis of the metals markets.Prior to joining Lehman Brothers, George’s career included five years as Chief Precious Metals Analyst at Consolidated Gold Fields, and 10 years as a reporter and columnist with the Financial Times. 

George's Online Presence:


Today's Panelists

Global Macro Trading Strategies & The Perfect Trade

Some of the best hedge funds use a global macro trading strategy to beat the markets. Alex explains how he is able to use this strategy to understand the world better and manage risk. He discusses how he reacted to March 2020 and how he is positioned for the increased volatility in the markets today.

Reflexivity

In 2021, I was blindsided by reflexive price action in interest rate markets. What had led my prediction astray? Why was I, along with some other global macro traders, so confident that a more patient and gradual approach to tightening monetary policy was the correct bet? Were we terminally wrong, or was the whole tightening cycle that started this March just a short-term market hysteria? 

The answer may lie in reflexivity. Reflexivity, when it comes to financial markets, is a term introduced by George Soros and developed in his book, The Alchemy of Finance. It describes the phenomena of price moves serving as a catalyst for further price moves in the same direction. 

Another way to refer to reflexivity is the advent of price action having positive feedback. Such positive feedback can be one factor contributing to the market tendency to develop long-lasting trends. 

I discussed trends in my first book, The Next Perfect Trade. Recognizing trends is integral to putting yourself in position with favorable economic expectations. Furthermore, the propensity to trend, or reflexivity of price action, contributes to the efficacy of common risk management practices.

In other words: if your losing trades tend to pyramid losses, once the price action becomes adverse, executing disciplined stops can improve your portfolio performance. Same goes for sticking with your winning trades. However, that’s not the whole story.

The Impact of Economic Gravity

I have always felt that this reflexivity of price action is a useful, but not universal, observation. In particular, my bread-and-butter—interest rate markets—exhibit a lot of negative feedback that does not play well with conventional trend-following strategies. I introduced the term “economic gravity” to describe a situation where the price becomes its own enemy.

One example is “the negative predictive power” of interest futures. The settlement price of Eurodollar futures, for example, is not dictated by market sentiment, but by the actual setting of the London Interbank Offer Rate (LIBOR), which, in turn, is dictated by US Federal Reserve policy.

The policy rate five years from now, implied by the current futures, has very little correlation with what will actually end up happening—which I can confirm through decades of observation. And if any correlation does exist, it's likely to be negative. 

If the market implies higher rates today, it creates tighter borrowing conditions. When that happens, it results in an incrementally less inflationary environment and, eventually, lower policy rates.

Developing a Shield Against Uncertainty

Enter 2020. In my book, The Trades of March 2020 (now officially a Wall Street Journal bestseller), I outline how I navigated the initial COVID crisis, developing a strategy that would carry me through the rest of 2020. 

The subtitle of my new book is A Shield against Uncertainty. Amidst the pandemic uncertainty, I was sure of two things:

  • The pandemic would eventually pass 
  • Central Banks would keep adding liquidity until it became excessive—and it would stay that way for an extended period of time

This strategy successfully carried my portfolio through to the end of 2020. The Federal Reserve’s rhetoric seemed unequivocal: of course, there would be a surge in inflation, when the post-pandemic reopening occurred. But policy makers vowed to be patient and see if this inflation would prove to be transitory.

I felt strongly they would keep that vow, because no matter how robust the recovery, there would be segments of the population still suffering from the lockdowns; thus, to tighten rates immediately and impair employment growth would be uncompassionate. If anything, the Fed alluded to the fact that their policies in the past had left various swaths of population behind as an argument to be even more patient this time around. 

The Rhetoric Shifted

Needless to say, by the end of 2021, this viewpoint was severely challenged. I have listened in amazement to the shift in rhetoric, which, in my opinion, has not been warranted by any shift in economic trajectory. 

When questioned about higher and more persistent inflation projections, Chairman Powell pointed out that the divergent factor was unexpectedly severe supply bottlenecks. I tend to concur with this assessment.

Logically, one should assume that if there is a change in policy course, the newly discovered factors should be the cause. But how can supply bottlenecks be a reason for a tighter interest rate policy?

Let’s think it through. We still don’t know whether the underlying inflation is transitory. Those who were concerned about it in 2020 are probably still concerned. The converse is also true. It is possible, however, to argue that now, amidst some signs of economic slowdown and the lessening of the fiscal impulse, the inflation projections should be more benign than a few months ago.

Traders Should Stay Focused on What the Fed Will Do

So the new main concern is the current elevated levels of inflation and the adverse impact it has on the portion of the population whose wages are not catching up to the rising prices. How would higher rates help that? Higher financing costs would definitely not lower (but would, in fact, raise!) the cost of production. 

The only way policy can alleviate inflation is by weakening demand, which in turn is a euphemism for making sure that people have less money with which to buy things. Thus, the government’s answer to those who complain that goods are too expensive for them is, “We will take away more of your money, so you will buy even less and then the prices will go down.” 

I have learned long ago, though, that a trader should focus not on what the Federal Reserve should do, but on what they will do. Honestly, I am not sure what they should do; I am just pointing out the internal inconsistency in their approach.

What I failed to take into account was the reflexivity of political and market consensus. The outcry about inflation put pressure on the Fed to do something. Then, step by step, the conversation about tighter policy took hold. Interest futures started to price in imminent rate hikes. And then suddenly, the hikes became a reality.

The Influence of the “Market Mood”

The Central Bank never wants to surprise investors with a hike, as it might disrupt financial markets. If they intend to raise rates, but the market hasn’t priced it yet, it costs them very little to postpone the policy change for a few weeks and clarify their communications.

This time, however, the market started pricing in more and more rate hikes in advance, and the participants' mentality changed to accept the imminent lift-off as a natural and likely course of action.  

Even the most intelligent investors are bound to be affected by the “market mood,” when nothing but price action changes their opinion about a long-term outcome. I am not sure whether the Federal Reserve succumbed to political pressure or genuinely changed their assessment (even if the latter doesn’t make sense to me personally). But it is very likely that this market mood influenced their thinking and led them to subconsciously accept the new policy bias.

The Potential for a New Reflexive Reality

Over the years, I have succeeded by seeing through the price action and discovering certainty in long-term economic outcomes. I saw the inevitability of rates getting to zero even when others were talking about the end of the secular bond bull market in 2018. 

I capitalized on the policy pivot of 2019 and on emergency cuts of 2020. Further, instead of panicking in the middle of a crisis, I was able to buy assets in 2020 and profit from the rebound.

In 2021, however, I faced a challenge, underestimating the short-term reflexive power of the market mentality. My “stay calm and stay the course” strategy backfired because, in this case, the market proved to be reflexive.

Going forward, the mood could easily change again. More mixed economic numbers or significant correction in asset prices could cause the Fed to slow down, and then pause when more ambiguous data emerges. 

But if I am to be intellectually honest, the bar for such a change in mood is high. We are yet to discover if the current inflationary pressure will be self-reinforcing or self-defeating. As a trader, I have to be prepared for this new reflexive reality.

For more advice on reflexivity in the market, you can find The Trades of March 2020 on Amazon.

Alex Gurevich is the founder and Chief Investment Officer of HonTe. After earning a PhD in mathematics from the University of Chicago, he leveraged his passion for strategic gaming into a lucrative Wall Street career. He was hailed by the Wall Street Journal in 2003 as the star trader of J.P. Morgan, where he served as Managing Director in charge of global macro trading. The author of The Next Perfect Trade, Alex Gurevich led HonTe’s macro strategy in 2020 to rank second by net return according to BarclayHedge—and in the top ten of emerging managers in all strategies by Eurekahedge.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest: Alex Gurevich

Bestselling author Alex Gurevich is the founder and Chief Investment Officer of HonTe. After earning a PhD in mathematics from the University of Chicago, he leveraged his passion for strategic gaming into a lucrative Wall Street career.He was hailed by the Wall Street Journal in 2003 as the star trader of J.P. Morgan, where he served as Managing Director in charge of global macro trading. The author of The Next Perfect Trade, Alex Gurevich led HonTe’s macro strategy in 2020 to rank second by net return according to BarclayHedge—and in the top ten of emerging managers in all strategies by Eurekahedge.

Alex's Online Presence:


Book References:


Today's Panelists

Learn How To Pick High Quality Value Stocks From The Pros

This week we interview Eric Schoenstein about picking high quality value stocks in a volatile environment. The nature of the stock market has changed recently and most people have not noticed. Eric explains the tools necessary to not only survive in this market but thrive. Its a good time to brush up on your value stock investing.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Eric H. Schoenstein

Eric H. Schoenstein, Managing Director, Chief Investment Officer and Portfolio Manager joined Jensen Investment Management in 2002. Eric currently serves as the Chief Investment Officer with primary responsibility for portfolio management and strategy across all of Jensen’s products. Eric spent nearly fourteen years with Arthur Andersen LLP, as a Senior Audit Manager, providing a wide variety of services to clients of all sizes in both the public and private sectors. He earned a BS in Business Administration, with a focus in Accounting, from Oregon State University.

Eric's Online Presence:


Today's Panelists

Investment Decision Making Made Easy With Victor Haghani

Good investment decision making is hard work and requires an understanding of how the markets operate. You cannot learn this in a textbook. We discuss some of the tools on our show with Victor Haghani. Good predictors of top performing stocks, position sizing, asymmetric risk bets, and the puzzle of the missing billionaires.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Victor Haghani

Victor founded Elm Wealth in 2011 to help himself and his family and friends capture the long-term investment returns they ought to earn. He has spent nearly 40 years actively involved in markets and financial innovation, having been a Managing Director in the bond-arbitrage group at Salomon Brothers and a co-founder of Long-Term Capital Management (LTCM).

Victor's Online Presence:


Today's Panelists

Conservative Option Strategies – Kirk Chisholm

This is a special interview this week where Barbara Friedberg interviews our host, Kirk Chisholm, about the top conservative options strategies that can be used to generate additional income for your portfolio. Options may be foreign to you, but these strategies pack a punch when you are looking for managing your risk, generating additional income or protecting your positions in a rocky market. 

Kirk Chisholm innovative advisory group

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Kirk Chisholm 

Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group. His roles at IAG are co-chair of the Investment Committee and Head of the Traditional Investment Risk Management Group. His background and areas of focus are portfolio management and investment analysis in both the traditional and alternative investment markets.


Kirk has been providing wealth management services to individuals, executives, entrepreneurs, and their families, as well as businesses and organizations since 1999. Kirk is dedicated to developing lasting relationships with all of his clients. One of the benefits of working with Kirk is his patience and his ability to provide clear, easy to understand explanations of all financial options.


Prior to integrating with Innovative Advisory Group in 2008, Kirk founded Stirling Global Advisors, LLC in 2005, a full-service private wealth management firm. Kirk has also held wealth management roles at both UBS PaineWebber and Smith Barney.


Today's Panelists

Commercial Opportunities For Investing In Space

The final frontier... Investing in space.

This week we talk to Brittany Zimmerman, who has worked with NASA, ISS, and the US DoD. She has an inside track on the current and future technologies regarding space travel. We get some great insight on the commercial opportunities of space.  If you want to invest in the final frontier, you will love this episode.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Brittany Zimmerman

Brittany has spent 30 years working on expanding her breadth of skills to build a synergy of competencies to achieve her lifetime goal: organizational success through bettering the conditions of humanity. She takes the old philosophy of leaving the world a better place than you found it to the next level. In her most recent of many ventures, Brittany is implementing her multidisciplinary expertise of space systems to simplify complexities and make life support technologies easily accessible and affordable for terrestrial humanity. For this and other projects, she is seeking partners and investors.To continually diversify her activities and skills, she has opened a new location to a 501(c)(3) where she acts as Board Member and Director of Operations for a nonprofit which ensures safety and education to cross-cultural youth in California and Arizona.

Brittany's Online Presence:


Today's Panelists

Investing In China And Technology

We interview Bruce Liu about the best strategy for investing in China. We discuss the role of technology, why you old investing in China strategy is no longer valid and where you should invest for the future. You will definitely come away from this interview with a new insight on the Chinese economy.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Bruce Liu

Bruce Liu, is an expert in next-generation technology investing. Before Esoterica, he was a portfolio manager and partner of PhaseCapital. He was an equity strategist at WisdomTree Asset Management and a sell-side equity strategist at Sanford Bernstein. Bruce started his investment career at Dow Chemical Pension Fund. He received his Ph.D. in Business Administration from the University of Connecticut and held the Chartered Financial Analyst (CFA) designation. 

Bruce's Online Presence:


Today's Panelists

Is Investing In Dividend Stocks The Best Strategy?

Want to buy some boring dividend stocks? These are stocks that people would look at your funny if you bragged about them at a party. Yet these are some of the best high quality stocks you can consider today. Many of these stocks also pay you to hold them with a dividend.

Is Investing Dividend Stocks Boring?

Dividend stocks often carry a reputation for being the snoozers of the equity world. But is that necessarily a bad thing? In the age of click-bait, speculation dominates the headlines. And why wouldn’t it? Getting in early on the next world altering idea sounds like a good bet to most of us, especially if it’s as easy as it sounds. Unfortunately, it most certainly is not as easy as it sounds. That’s why it can be pay so handsomely when you’re right. Yet, the hard reality is that finding the one “story stock” that goes to the moon requires avoiding countless others that will likely see unhappy endings.

And here’s a pro tip: When it feels like everyone at the cocktail party is invested in a stock with a game-changing idea, stay away from pointy objects, because we just might be riding high on a price bubble. So, if you’re more inclined to skip the craps table like us, try looking for a strategy that builds long-term returns by avoiding failures and prioritizes those boring dividend paying stocks. The results may surprise you.

Dividend Stocks Payers Outperformed the S&P 500 but There Was a Better Option

Before diving into dividend stock performance, let’s take a quick look at two ways investors might invest for dividends.

The simplest approach? Buy stocks that pay dividends.

A more refined approach? Buy stocks that pay dividends and are growing those dividends over time.

As we can see below, either of these dividend investing approaches has shown a history of outperforming the stock market over the last 20 years. However, investing with dividend “growers” not only provided better performance, but it did so with lower volatility (risk) than dividend payers and the broader market. The point about risk is likely relevant if you’re concerned about the rocket-like climb in valuations over the last year but still want to maintain equity exposure in your portfolios.

Growth of $100,000: Dividend-Paying Stocks, Dividend-Growing Stocks and S&P 500 Index

(01/01/2000-12/31/2020)

Source: Bloomberg, as of 12/31/2021. Index performance shown is for the S&P 500 Index and does not represent TrueShares fund performance. Performance is cumulative and based on quarterly returns. The Dividend Payers or Dividend Growers category constituent inclusion or exclusion is evaluated quarterly, with performance for that group calculated for the following quarter. Dividend Payers represents performance of companies who paid a dividend in the prior quarter. Dividend Growers represents performance of companies who paid a dividend in the prior quarter and grew their dividend payments over the subsequent year. It is not possible to invest directly in an index. Performance data quoted above represents past performance and does not guarantee future results.

And it’s not just about the return benefit. Dividend “growers” also provide the ability to grow an income stream over time, an important characteristic for income-oriented investors.

We also tend to think they may be less sensitive than bonds to increases in interest rates in the near-term. This belief is driven by our view that both bond and high-growth equity security valuations benefited disproportionately compared to dividend-paying stocks as interest rates fell.

Facing an Inflationary Market

When inflation rears its head in the economy, it causes all kinds of problems as costs and prices shift for different areas of the market. When this happens, there are businesses that are ideal candidates to weather an inflationary environment. Companies with low ongoing capital costs that generate good free cash flow from their operations will have the cash on hand to make nimble and quick decisions and take advantage of potential opportunities in the market. More importantly, businesses that are well positioned to pass along any price changes to their customers tend to be ideally situated to survive and may possibly thrive during the inflationary period, coming out even stronger on the other side.

Planning Your Dividend Strategy Means Taking a Deeper Dive

Even though this is a historical look-back, an important thing to note is that the portfolio of “growers” above was constructed with a forward-looking approach; it isolated the performance of companies that grew their dividends in the subsequent year with quarterly rebalancing.

But since knowing which stocks will be part of that group in advance is impossible, how does an investor build a portfolio of dividend growers?

We believe the answer lies in:
• Identifying stocks with attractive, sustainable dividend yields for current dividend cash flow, and
• Pursuing dividend growth, which is the result of a company’s payout ratio, free cash flow stability/growth and management/board’s desire to grow dividends.

As a result, investing for dividend growth requires fundamental analysis to identify which stocks are most likely to grow and/or sustain their dividends going forward.

If the challenge of building a forward-looking dividend portfolio seems daunting, looking at managed products like ETFs may start to make sense.

Why Quality Matters

We believe in quality businesses. Quality businesses have few exciting characteristics, but they almost always have the ability to generate beneficial free cash flow from their operations and grow that cash flow over time through good management and reinvestment in their operations. Any business that can pay a sustainable dividend is likely to be free cash flow producer. Any business that can grow their dividend over time   has the potential to continue growing their cash flow through smart reinvestment in their businesses. It sounds simple, but high-quality dividend paying stocks are exactly what we believe intelligent investors should be looking for.  These are some of the highest quality businesses around.

Takeaway: Focus on Companies with Attractive Current Yields and Prospects for Dividend Growth

At TrueShares, we believe the “secret sauce” is finding companies that provide high current dividend yields with prospects for above average dividend growth.

As explored above, to execute this strategy, we believe you need to focus on companies with the potential to deliver:
• Attractive relative performance
• Lower volatility than the market
• Attractive income today
• Growing income over time

Finding companies that check all these boxes requires diligent, forward-looking research.

You should be afraid of gambling on money-losing stocks. It will most certainly end badly for many. But instead of completely avoiding the market, why not turn to something that has proven to work over time? As an active manager, it’s no surprise that TrueShares believes that staying the course with a forward-looking dividend investing strategy is an attractive option for many investors!

Important reminder: Stocks that pay high dividends or continue to grow dividends can fall out of favor with the market causing such securities to underperform companies that do not pay high dividends. Likewise, there can be no assurance that companies that have historically paid a dividend will continue to do so or may reduce dividends.

Important Information

All investments involve risk including possible loss of principal.

The content herein includes the views, opinions and analysis of the investment manager as of the date of publication. These views and information are subject to change without notice, and are not meant to be a complete analysis of any market, industry, country, or company.

Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy, completeness or timeliness of this document. TrueShares accepts no liability for any losses arising from use of this information and reliance upon the comments, opinions and analysis in the materials is at the sole discretion of the reader.

Before investing, investors should consider the Fund's investment objectives, risks, charges, and expenses. The prospectus, or summary prospectus, containing this and other information may be obtained by visiting www.truesharesetfs.com and should be read carefully prior to investing.

RISK CONSIDERATIONS

The TrueShares Low Volatility Equity Income ETF may not achieve its objective and/or you could lose money on your investment in the Fund. The Fund is recently organized with no operating history for prospective investors to base their investment decision which may increase risks. Some of the Fund’s key risks, include but are not limited to the following risks. Please see the Fund’s prospectus for further information on these and other risk considerations.

ETF Risks. As an ETF, the Fund is exposed to the additional risks, including: (1) concentration risk associated with Authorized Participants, market makers, and liquidity providers; (2) costs risks associated with the frequent buying or selling of Fund shares; (3) market prices may differ than the Fund’s net asset value; and (4) liquidity risk due to a potential lack of trading volume. Dividend Paying Security Risk. Securities that pay high dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high dividends. Dividends may also be reduced or discontinued. Equity Market Risk. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change based on various and unpredictable factors including but not limited to: expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic and banking crises. Market Capitalization Risk. The Fund may invest is securities across all market cap ranges. The securities of large-capitalization companies may be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion and may also be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes. The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies and generally trade in lower volumes and are subject to greater and more unpredictable price changes than large capitalization stocks. The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies and generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks. Depositary Receipts Risk. American Depositary Receipts (“ADRs”) have risks similar to those of foreign securities (political and economic conditions, changes in the exchange rates, etc.) and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares.

Index Descriptions: The S&P 500® Index is a widely recognized capitalization-weighted index that measures the performance of the large-capitalization sector of the U.S. stock market. Securities in the ETF’s portfolio will not match those in any index. The ETF is benchmark agnostic and corresponding portfolios may have significant non-correlation to any index. Index returns are generally provided as an overall market indicator. You cannot invest directly in an index. Although reinvestment of dividend and interest payments is assumed, no expenses are netted against an index’s returns. Index performance information was furnished by sources deemed reliable and is believed to be accurate, however, no warranty or representation is made as to the accuracy thereof and the information is subject to correction.

Foreside Fund Services LLC, distributor.

Subscribe & Download

Never miss out on a new episode! Subscribe using your favorite podcast app.

Listen on
Apple Podcasts
Follow us on
Spotify
Follow us on
Stitcher Radio

Sign up to be one of our Money Tree Ultimate Insiders. You will have instant access to new episodes, automatically have access to our monthly giveaways, and the potential to be a guest panelist on our show

Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Austin Graff

Mr. Graff serves as Managing Partner and Co-Chief Investment Officer for Titleist Asset Management.  He is also the Managing Partner of Shorebird Avocet Fund, a deep value and special situations investment strategy.  Prior to joining Titleist and Shorebird, Mr. Graff was a senior vice president and portfolio manager at PIMCO where he co-managed a suite of global equity strategies.  He was previously a vice president in investment banking at Goldman Sachs where he advised infrastructure, industrial, and financial institution clients on strategic transactions and restructurings totaling more than $40bn.  Prior to this he was a financial analyst at the Indiana Finance Authority where he worked on multiple transformational projects, helping to finance key initiatives for state and local governments. 

Austin's Online Presence:


Today's Panelists