Money Life with Chuck Jaffe

Scott Wren, senior global market strategist for the Wells Fargo Investment Institute, says the stock market is in for some dicey moments heading into 2023 and through the first few months of the year, but he is calling for the Standard & Poor's 500 to hit 4,400 -- roughly 15 percent higher than it is today -- by the end of next year, a recovery that is set up by solid economic underpinnings that he says will come to the fore once inflation is under better control. Also on the show, Anu Ganti of S&P Global discusses how the Dow Jones Industrial Average during October posted its best month in nearly 47 years, Jerome Clark of T. Rowe Price -- a pioneer of target-date investing -- discusses how and why target-date investors have performed by staying the course in market times tempting them into making portfolio changes, and Lin Ho of Zelros covers the site's recent survey on how consumers feel they are being gouged for insurance coverage and how to make sure you're getting the most for your insurance dolar.

Greg Valliere, chief U.S. policy strategist for AGF Investments, says that while there is no sugar-coating the problems of the economy -- inflation, rising interest rates, a rough housing market and more -- the likely recession that lies ahead will be shallow, and will have a reasonable recovery once the Federal Reserve proves that the bitter medicine it is providing to quash inflation won't go overboard and kill the patient. Also on the show, Mark Hulbert discusses his recent column on MarketWatch where he added his own flair to some new academic research showing that the classic "4 percent rule" on retirement withdrawals is leading savers astray and that the proper spending amount to ensure that someone not outlive their money may be less than half of what most people are planning for. Plus Chuck talks about his annual cash-or-candy, trade-or-treat Halloween event and the choices his neighborhood kids went for when they came to his home Tuesday night.

Quincy Krosby, chief global strategist at LPL Financial, says that the stock market has been signaling a coming recession -- albeit not likely to be "a deep scary one" -- but the key will be the speed of recovery, and that may hinge on how and when the Federal Reserve eases up on or reverses interest-rate hikes. Crosby notes that one thing that will help the recovery is that the dollar should weaken once the Fed makes it clear that the cycle of rate hikes is ending; she pointed to multi-national companies like Apple and Microsoft as examples of firms who saw global revenue growth hindered by the strength of the dollar. Also on the show: Kyle Guske of New Constructs puts a four-star mutual fund into "The Danger Zone," noting that it's filled with dangerous stocks and that past performance isn't likely to dictate future success; Greg Jenkins, head of institutional defined contribution for Invesco, examines the firm's recent survey showing that employees feel alone -- and unsupported by their employers -- in trying to determine the best investment strategy for retirement, and author and investment adviser Kristen Ragusin discusses her new book, "The End of Scarcity: The Dawn of the New Abundant World."

Karl Mills, president of Jurika Mills & Kiefer, says that negative investor sentiment is a precondition of a rebound, but he's looking for more signals that the economy and stock market is bottoming out. For example, Mills says that earnings haven't declined much yet, but he expects them to because of the squeeze that current conditions are putting on profits. The result is that Mills is taking a cautious, "shelter from the storm" approach, noting that there is still a lot of downside risk even though the market can see and already price in the coming recession he sees as arriving as the calendar turns. In The NAVigator segment, Mark Milner of Parametric Portfolio Associates, says that a lot of closed-end fund asset classes have now reached double-digit discount territory, "which historically has been a good opportunity to buy closed-end funds," although he worries about a coming boom in year-end tax-loss selling -- larger than in years past as a result of the market's 2023 downturn -- could impact closed-end assets as the New Year approaches. Plus, in the Market Call, Eric Marshall, president and portfolio manager at Hodges Capital Management, discusses bottoms-up investing in blue-chip stocks.

Matt Freund, co-chief investment officer at Calamos Investments, says that the market has taken the pain of higher rates but is watching that work its way through the economy and corporate earnings while facing wildcards like Covid-19, war in Ukraine and more that could extend current troubles. Still, despite an "epically bad" start to the year for the bond market -- coupled with hard times in equities -- Freund says that it is "not a foregone conclusion" that what lies ahead is a crash, and he expects the downturn to pass from here with a more limited amount of financial pain. Also on the show, Tom Lydon, vice-chairman at VettaFi, focuses on free cash-flow and quality domestic companies with his pick for "ETF of the Week," and Michael Campagna, senior investment analyst at Moerus Capital Management returns to the Market Call to discuss deep-value investing and just how messy he is willing to get in a market where the global valuation picture has been changing rapidly.

Christopher Davis, chairman and portfolio manager at Davis Advisors and the Davis Funds, says that "the bubble has been pricked" on the "crazy, hyper-speculative" growth companies, but that has put some names into the stock market's sweet spot, especially for investors with long time horizons and a value-investing bent. A year ago on the show , Davis said that a hybrid value style that encompassed "undervalued growth companies and value stocks that can grow" would be well positioned for whatever the market could dish out, and he now says the strategy has proven its worth; while the markets have bloodied all investors, Davis believes it has positioned investors to be long-term winners by staying the course. Also on the show, Greg McBride, chief financial analyst at BankRate.com discusses the site's latest survey showing that inflation concerns are making investors even more nervous that their retirement savings are falling behind, and Chuck talks about his annual Halloween "cash or candy" giveaway and how he will be working it on the trick-or-treaters this year, expecting the kids to be feeling the pinch of inflation this year too.

Tom Siomades, chief investment officer at AE Wealth Management and Advisors Excel, says that he believes the economy has been in recession for much of this year, and that he sees that ending as soon as the Federal Reserve gets inflation under control, which he expects to happen by early next year. He notes that the pundits calling for recession next year are late to the game; meanwhile, that time frame makes it easier for investors to stay the course with the investment portfolios built during the bull market. Also on the show, Matt Brannon of Clever Real Estate discusses the site's new survey showing that inflation is forcing roughly 40 percent of Americans to change buying habits on everyday goods, but which also highlights ways in which consumers misunderstand how inflation works and how bad the current situation is relative to the past. And in the Market Call, portfolio manager Adam Coons of Winthrop Capital Management discusses exchange-traded funds and the difficulty of finding issues that can be productive "satellites" to a core portfolio now.

Scott Knapp, chief market strategist at CUNA Mutual Group, says that central bankers are engineering a recession in order to kill inflation, and that investors are asking the wrong questions when they wonder how deep and how long a recession will be instead of wondering whether the mild recession most people expect will be enough to get the job done and fix the problem. Knapp believes that inflation is stubborn enough -- and that core inflation is accelerating -- to force a "more meaningful recession" that creates a longer downturn. Despite that forecast, Knapp says he is sticking with current asset allocations to ride things out, noting that a lot of the recession is already priced into the market. Also on the show, Kyle Guske of New Constructs revisits Tesla in "The Danegr Zone," discussing whether Elon Musk's distractions are adding pressure to a tenuous market position, Jenn Tracy discusses an IPX1031 survey in which half of Americans say that their dream home is "unattainable" in today's rising-rate, high-cost real estate market and, in the Market Call, David Barse, chief executive officer at XOUT Capital discusses the importance of eliminating worrisome stocks from a portfolio.

Robert Frick, corporate economist at Navy Federal Credit Union, says he thinks there is at least a 50 percent chance of a recession, but says that the whole idea that the Federal Reserve can "engineer a soft landing is a fairy tale," noting that a perfect ending to today's economic troubles isn't impossible, but "if it happens, it's just going to happen because it happened," not because the Fed actions caused it. Frick notes "a mild recession could be a tonic to a lot of what ails the economy right now." Also on the show, Gretchen Lam, senior portfolio manager at Octagon Credit Investors talks about how rising interest rates are helping the credit market now -- minimizing losses compared to most fixed-income investments -- and how loans have performed during periods of rate hikes in the past; Anna Mabry of Calvert Impact Capital discusses "community investment notes," direct investments that individuals can buy for as little as $50 that function as a fixed-income alternative while also trying to make a positive impact on communities, and Chuck answer's a listener's question about allowances, when to start them and how to structure them.

Michael Sincere, author of the Michael Sincere's Long-Term Trader column on MarketWatch.com, says that there are nine stages to a bear market and that the recent rallies are proving that this downturn isn't quite halfway through those steps, making the road to recovery long. He expects the bear market to last for at least another 12 months, and while he sees some potential rallies in there -- and even sees potential for a significant spike higher -- he suggests investors should be wary about taking the bait and should maintain a slug of cash (money market funds and short-duration Treasury funds) in their asset allocation until the technicals support that the recovery is on. Also on the show, Tom Lydon of Vetta Fi puts a happy face on a brand new fund in the "ETF of the Week," Jaime Dunaway-Seale of Clever Real Estate discusses a recent survey showing that a surprising number of Americans would be willing to buy a haunted house in order to get a home in these competitive, higher-cost times for the real estate market, and Dan Keady -- the chief financial planning strategist at TIAA -- discusses the impact of the recent, large cost-of-living adjustment for Social Security and how that extra income will help seniors and soon-to-be retirees fend off the sequence-of-return risk that is the big concern for seniors right now.