Money Life with Chuck Jaffe

Kristina Hooper, chief global market strategist at Invesco, says she anticipates stock market and economic problems late this year -- "especially if the Fed doesn't take it's foot off the accelerator" -- but she says the current environment will settle down so that investors can get their bearings and stay focused on the long-term, noting that there are reasons to be optimistic about the market for 2024 and beyond. Hooper says that the Federal Reserve will be the biggest determinant of how and when the market recovers, but said she feels that investors who get too short-sighted about what is happening now are likely to be more damaged by the actions of central bankers than those who ride it out. Also on the show, Matt Brannon, data analyst with Clever Real Estate, discusses their recent study of Americans' credit-card habits, which show that most of the personal finance gains reported and experienced around the pandemic have faded as Americans returned not only to their offices but to their bad pre-pandemic financial habits, and in the Market Call, Derek Izuel, chief investment officer at Shelton Capital Management discusses international investments in times when foreign markets are facing so many troubling forces beyond rising inflation.

JJ Kinahan, chief executive officer, IG North America -- parent company of tastyworks -- says that the stock market is showing signs that current high levels of volatility are likely to stick around into early next year; considering this abnormal market activity, Kinahan says there is nothing wrong with average investors regrouping and taking a breather while waiting for more clear direction from the market. Kinahan notes that he has seen over the last five months more investors moving from individual stocks towards exchange-traded funds, because they believe in the market but worry about being burned by individual stocks blowing up. Also on the show, Jim Royal of Bankrate.com discusses a new survey showing that the current "crypto winter" has a lot of investors reconsidering their comfort level with cryptocurrencies, noting that he thinks the negative feelings go beyond the 60 percent decline that the biggest cryptos have experienced this year, and Martin Tarlie, portfolio manager and research analyst at GMO discusses the firm's research looking at how to properly deal with sequence-of-return risk, the condition many older investors are facing now as they look at retiring into a stock market that is struggling.

Jeff Weniger, head of equity strategy at WisdomTree Asset Management, says that the strong dollar is dramatically changing business conditions for U.S. companies, even as they deal with recessionary conditions. The dollar has gotten so strong, Weniger says, that it's an expensive country for companies and consumers, all of whom will have to deal with the headwinds created by the dollar. Weniger says that he expects the next six months to be characterized by significant volatility, which will give technology stocks a tough ride, which has him turning to utilities and consumer staples while waiting to see how the Federal Reserve's plans to deal with inflation play out. Also on the show, Hugh Tallents, senior partner at cg42.com discusses his recent research into "buy now, pay later" plans and says that consumer behaviors are inflation a debt bubble that could lead to real trouble for the industry as interest rates rise and the economy continues to falter in 2023; Kyle Guske, investment analyst at New Constructs, adds Ring Central to a recent list of "zombie stocks" -- companies with no earnings that are burning through cash and are headed for trouble trying to raise more under current conditions -- noting that it has the potential to be bankrupt in as little as two months, and Mark Lehmann, chief executive officer at JMP Securities discusses stocks in the Market Call.

Jim Welsh of Smart Portfolios -- author of the "Macro Tides" newsletter -- says the Federal Reserve will not be able to raise interest rates, calm the economy and bring rates right back down, noting that current conditions are reminiscent of a 15-year period from the mid-1960s to the early 1980s when the market was largely flat as the central bank struggled to keep inflation in check. If the market repeats that kind of long-term doldrums, Welsh says that buy-and-hold investors will be disappointed in the long run. That's doubly scary when considering the comments of Chris Maxey, chief market strategist at Wealthspire, who says in The Big Interview that investors need to take a longer-term approach to deal with current volatility and Fed policy-making and the recession he sees ahead for 2023. In The NAVigator segment, John Cole Scott of Closed-End Fund Advisors discusses and compares floating-rate and senior loan funds to preferred-securities funds, noting that floating-rate funds are a tool for combating high and rising interest rates, while preferred equities are a good weapon for battling a recession, which may lead investors to "split the ticket" in order to deal with today's complex markets. In the Market Call, Aleksandr Spencer, chief investment officer at Bogart Wealth, discusses tactical investing and the right funds and ETFs for the job now.

Long-time investment writer John Waggoner, the financial editor for AARP.org, says that investors aren't seeing the proverbial "blood running in the streets" despite the stock market's recent downturn, so it's not a simple "buy the dips, ride it out" market. Instead, it's a balance of holding more cash and deploying it selectively, while also considering ways to reduce the long-term impact that current conditions can have on a retirement portfolio. Also on the show, Tom Lydon of VettaFi makes a short-duration bond fund -- an ideal and popular parking place for cash given current market conditions -- his ETF of the Week, Ted Rossman of Bankrate.com discusses a survey showing that it's already beginning to look a lot like Christmas as holiday shoppers get busy early in an attempt to stave off inflation this year, and, in the Market Call, Chris Armbruster, portfolio manager and senior research analyst at Kayne Anderson Rudnick talks about building concentrated portfolios and investing in mid-cap stocks

Jason Thomas, chief executive officer at Portfolio Design Labs, says that the toughest challenge facing investors right now is that safe assets -- which had done their job reasonably well during downdrafts over the last 30 years -- aren't delivering now, forcing investors to change their plans to better ride through inflationary and recessionary times. Thomas says that with the dividend portion of high-dividend stocks being undervalued, a mix of those steady payers plus short-duration bonds will help investors get through the next few years to the next phase of both the market and their investment life cycle. Also on the show, Chuck talks about The Vanguard Group's announcement this week that it was shutting down a U.S. ETF for the first time ever, and what that action says about the company and the industry -- and what it means for you -- and Andrew Graham, founder and portfolio manager at Jackson Square Capital talks in the Market Call about pursuing a growth investment strategy during a time when growth is hard to come by.

Willie Delwiche, investment strategist at All Star Charts, says that he does not believe investors will be rewarded for "being early to buy the dip," warning that changing market conditions make it that waiting in cash to see more discernible trends will avoid losses and sidestep volatility while still allowing for upside potential once it becomes clear that the tide is turning. "The more cash you have on the sidelines" Delwiche says, "the better you're feeling about your position." Today's show also features the return of Wade Pfau, professor of retirement income at The American College of Financial Services, who is back to answer listener questions about the use of reverse mortgages, especially given current interest rate and market conditions, plus Maria Szatkowski of MyVision.org discusses the site's recent survey on medical procrastination caused by inflation plus the acceptance of telehealth and whether it helps to break the logjam, and we revisit a recent wide-ranging conversation with Christine Benz, director of personal finance and retirement planning at Morningstar Inc., in which she coins the term "index-fund abuse" and discusses the difference between making a portfolio and investment strategy recession-proof versus inflation-proof.

James St. Aubin, chief investment officer for the Sierra Mutual Funds, says that investors can win right now by not losing, and while holding cash won't keep pace with high inflation, he says being on the sidelines waiting for the market "to show some productive trends" is a sound strategy for current conditions. St. Aubin says that while the Federal Reserve's clear mission is to tame inflation even if it means triggering a recession, the stock market will continue to respond badly until it has a more clear direction. Also on the show, Mike Dowdall, chief investment officer at Alternative Fund Advisors, discusses the private credit market as an alternative to ordinary stocks and bonds in this market, David Botset of Schwab Asset Management discusses the firm's 11th annual study of ETF investors and their changing habits, and David Trainer of New Constructs puts a popular pandemic stock in "The Danger Zone," marking it as his latest "zombie stock," walking dead as it burns through cash with no sign of profits in sight.

Abhay Deshpande, founder and chief investment officer at Centerstone Investors, says that international stocks are already looking like good values but are likely to be priced even better with another drop from here, but it is creating "a dream scenario for anyone who has a three- to five-year time horizon," so while he sees the proverbial blood running in the streets globally, he thinks investors are "in that zone" where they should allocate more internationally to get the best prices now. Investors generally are feeling like the blood is running in the streets, which is why investor optimism is at its lowest levels since March 2009; Charles Rotblut of the American Association of Individual Investors gives the high level of pessimism some context, and Toni Turner of Trendstar reflects on the market's technicals and ponders what might happen if June's lows don't hold up from here. Plus, Mark Scalzo of the newly listed Destra Multi-Alternative Fund discusses alternative investing and his fund's massive discount and, in the Market Call, Martin Leclerc of Barrack Yard Advisors talks about stocks and holding fast to investment beliefs during volatile times.

Wade Pfau, professor of retirement income at The American College of Financial Services and the nation's preeminent expert on reverse mortgages, says that retirees are facing a delicate balancing act right now, worrying about sequence-of-return risk -- which is heightened during times of bear markets and high volatility -- but also how to fund retirement. Reverse mortgages can be a key tool in times like this, but Pfau says they become less effective as interest rates rise; coupled with wildly fluctuating housing values, it makes it crucial that retirement savers understand the math they are facing. Also on the show, Tom Lydon of VettaFi looks to oil and gas exploration for his "ETF of the Week," Mark Hamrick, senior economic analyst at Bankrate.com, weighs in on the Federal Reserve's interest rate hike on Wednesday and what its statements about the future portend for the market, and Ken Willner of TextNow.com discusses their recent survey on how consumers are dealing with inflation and what they are sacrificing -- or are willing to give up -- to stay on budget now.