In the financial markets, it's common to spurious correlations based on historical data. However, the economic landscape has evolved, and banks now invest more in treasuries and borrow from the Fed rather than traditional lending. This shift questions the yield curve's predictive power. Additionally, spurious correlations show absurd links between unrelated data points, emphasizing the need for critical analysis of data to avoid misleading narratives. Today we discuss...
- Financial markets often draw conclusions from patterns, such as the inverted yield curve predicting recessions.
- Today's economy differs from 30 years ago, with banks favoring treasuries over traditional lending, altering the yield curve's predictive power.
- Correlation does not always imply causation; the inverted yield curve's causative effect may be weakened.
- Spurious correlations can be humorous but highlight the pitfalls of finding meaning in random data patterns.
- The bond market, at $130 trillion, dwarfs the $50 trillion US stock market and $100 trillion global stock market.
- The increasing debt and bond market highlight the importance of access to capital.
- AI's impact is currently seen as limited by many CEOs, viewing it as a potential rather than immediate profit driver.
- Microsoft's expenses on data centers have increased significantly, reflecting the infrastructure investment for cloud and AI services.
- Commercial real estate faces challenges, with significant losses on properties due to rising interest rates and reduced demand.
- Residential real estate is also under pressure, with 41.4% of median income now spent on new mortgages, surpassing 2008 levels.
"Cash is not trash... Cash is King" - Kirk Chisholm
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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.
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Today's Panelists
- Kirk Chisholm | Innovative Wealth
- Douglas Heagren | Pro College Planners