Money Life with Chuck Jaffe

Mike Liss, portfolio manager for the American Century Value fund -- who uses a relative-value approach and is always trying to find the stocks that are "most undervalued" -- says that there has been a shift in what represents a great risk-reward since the beginning of 2022. While energy stocks remain a reasonable value, Liss says that health care, industrial and real estate investment trusts are areas that have become particularly attractive entering the new year. Also on the show, Tom Lydon of VettaFi makes a small, young fund that focuses on offsetting carbon emissions as his ETF of the Week, Matt Schulz of LendingTree discusses holiday financial stress and how inflation and rising interest rates are contributing to consumers' agitation this year, and Chuck talks about Wednesday's news that the Securities and Exchange Commission is advancing its first big changes to trading rules in nearly two decades.

Sam Stovall, chief market strategist for CFRA Research says that investors in 2023 will find out "the difference between an all-weather radial tire and a 30-percent total return," with one being "a Goodyear and the other a great year." Dad jokes aside, his look ahead for the New Year includes the idea that 2023 will not be a repeat of 2022, and while there will still be significant volatility, he otherwise thinks that the market's leadership will turn over, with lagging sectors coming to the fore and the few hot places of the market receding. Moreover, he expects solid returns from the stock and bond market, though he thinks it may take until the second half of the year for those gains to materialize. Also on the show, Ed Carson of Investor's Business Daily discusses the rebound in investor optimism -- it was a big move, though the IBD/TIPP Economic Optimism Index remains in pessimistic territory -- and Louis Navellier of Navellier and Associates talks growths tocks in the Market Call.

Harry Dent, the founder of Dent Research, says that the stock market's troubles in 2022 were just a precursor to real trouble, with the next wave in a downward cycle coming early next year, right after the market wakes up to the fact that there is neither a Santa Claus rally or a January effect to get the new year started on good footing. Dent has been calling for a market decline of 85 percent or more in stocks -- moving from their peak to their trough -- and sees the massive decline being the next step, but he notes that the one silver lining is that bond funds are set up to not only be a safe haven but for significant gains. Also, he notes that once the market completes the crash cycle, he expects the next long bull market to begin. Dent's opinions tend to be outliers, and that is proven on this show as D.R. Barton Jr., chief investment strategist at Finiac, says he actually expects a Santa Claus rally this year, and he believes that technical indicators are showing that a market bottom may already be in place. He expects the new year will be more of the old one, volatile, choppy and with a lot of downward pressure just as we've seen in 2022. Plus, the Book Interview features Howard Yaruss, author of 'Understandable Economics: Because Understanding Our Economy Is Easier Than You Think and More Important Than You Know.'

Brian Nick, chief investment strategist at Nuveen, says that a soft landing for the economy is achievable, so long as inflation comes down without dramatically increasing the unemployment rate. He says it's 'so far, so good,' in terms of current conditions, though he notes it is still early. Nick expects a mild recession in 2023, but says 'Investors can get some pretty good deals with some of the yields that are available across the spectrum in fixed income, and that includes the equity markets too,' noting that dividend payers and growers are well positioned for the New Year. Dave Breazzano of Polen Capital Credit talks about the state of the corporate credit and high-yield markets, noting that the market's expectation that high interest rates will create more bankruptcies has priced paper attractively for investors who don't expect a spike in defaults. Also on the show, investment analyst Kyle Guske of New Constructs puts Five9 in 'The Danger Zone' as the latest 'zombie stock' with a destiny of running out of cash before it can run up any profits, plus Chuck answers a listener's question about deciding the best time to take Social Security.

Dan Fuss, vice chairman at Loomis Sayles, says that while interest rates and inflation are rising, the rate of those increases is slowing, and that part of the classic cycle doesn't ever get resolved quickly. is part of the classic cycle that has historically taken time to work out. The 89-year-old bond investing legend says the Federal Reserve has a tough job on its hands and places the central bank's odds of being successful in executing a soft landing are about 10 percent, though he thinks there's a better chance that it can push through the cycle without a downturn turning into a crash. Also on the show, Chuck answers a listener's question on how many stocks, funds and ETFs is too many for one investor to won, and portfolio manager Steve O'Neill of RiverNorth discusses why 'Tis the season for investors to go bargain hunting and discount shopping for closed-end funds.

Jeff Rosenkranz, manager of the Shelton Tactical Credit Fund, says that the fixed-income market is waiting for proof that the Federal Reserve's moves are starting to beat back inflation, but that stability in interest rates -- likely to be in place until the Fed starts cutting rates late in 2023 or into 2024 -- will drive good performance in fixed income over the next six to 12 months. Rosenkranz says that will help investors who are about to live through a recession which he says will be 'harder rather than softer in nature.' On the ETF of the Week, Tom Lydon of VettaFi discusses a China fund that is on the upswing but not quite yet trending, which he says investors may want to add to their watchlist entering the New Year. Also on the show, Anthony Sassine, senior investment strategist at KraneShares, gives his assessment of the electric vehicle sector -- going way beyond Tesla -- and Chuck answers a listener's question about ways to save a little more money in 2023.

Jonathan Mondillo, head of North American fixed income for abrdn, expects the Federal Reserve to do two more big interest rate hikes -- one now and one in the first quarter of 2023 -- which will keep the bond market choppy, but he believes the worst pain the bond market has suffered this year has passed. He expects the Fed to pause for the remainder of 2023, rather than pivot in its policies, with inflation having peaked but receding slowly. Mondillo cites strong fixed-income fundamentals -- particularly for municipal bonds -- despite the economic slowdown he sees ahead. Eric Veiel, head of global equity for T. Rowe Price, discusses the firm's recent research showing how its active management strategies outperformed appropriate index benchmarks over the last 20 years, and points out that active management doesn't necessarily deserve the bad name that indexing has given it in that time frame. Also on the show, Chuck answers a question about taking required minimum distributions from retirement accounts given current market conditions, and we revisit a recent Market Call interview with Amber Fairbanks, portfolio manager at Mirova.

Benjamin Halliburton, founder and chief investment officer at the Building Benjamins investment newsletter, says that inflation and interest rates bottoming out last year after a decline/trend that lasted for 40 years has now put investors into a new territory, forcing them to consider areas and industries that benefitted from decades of disinflation. It's the biggest inflection point of most investors' lifetimes, he says, but it's an adjustment that people will need to make to keep the profits rolling in the changed conditions they'll see for years to come. Also on the show, Washington Post columnist Helaine Olen discusses how Medicare Advantage will be used by more consumers this year than traditional Medicare coverage, and how that is creating a disadvantage to the country and to the many people who don't understand entirely what they are signing up for and who are falling for bad commercial messages. Plus, Chuck talks about giving gifts of stock for the children and grandchildren in your life.

Ben Ashby, head of investments at Rayliant Global Advisors, says that the U.S. stock market may be better positioned than the rest of the world right now, that's mostly because the outlook for almost all global markets right now is grim. He's anticipating trouble -- and sparse to no growth for the U.S. market and economy -- with little reason for optimism expected until the end of next year. Meanwhile, he described three types of bear markets -- apa Bear, Mama Bear and Baby Bear -- and says he thinks current problems will lead to the middle ground, but notes that a Mama Bear can be deep and difficult. Jack Kleinhenz, chief economist for the national Retail Federation and a member of the National Association for Business Economics Outlook Survey Committee discusses the results of the latest poll of economists, released today, showing that the researchers aren't holding out much optimism for 2023. Plus, Kyle Guske, investment analyst at New Constructs, puts another 'zombie stock' into The Danger Zone and in the Market Call, Andy Braun, portfolio manager for the Pax Large Cap fund, talks about stocks.

Paul Gruenwald, chief economist at S and P Global Ratings, sees trouble ahead for the economy early in 2023, as it moves through a recession and adjusts to slowing growth that is likely to be negative early on before picking up in May or June. Even with those gains, he expects the year to be flat on growth overall until 2024. Also on the show, Chris Oberbeck, chairman and chief executive at Saratoga Investment Corp. -- a large business-development company -- talks about the edge that BDCs have given income investors during today's sluggish market conditions and discusses why he thinks that advantage could grow as the market works through a potential recession. Plus, Brent Wilsey, president of Wilsey Asset Management, covers stocks in the Market Call.