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While housing prices have recently fallen, don’t expect a market crash like in 2008. That is according to Jack Macdowell, co-founder, and chief investment officer at alternative asset manager Palisades Group. In a January note, Goldman Sachs strategists predicted that national home prices would fall by at least 10% peak-to-trough this year, but Macdowell disagrees. He stated, "People may be concerned that we're entering into another global financial crisis-type event, where we'll see a ton of distressed inventory on the market putting downward pressure on home values. I would argue that I don't think that's the case." To back up his point, Macdowell noted that today's lenders have become smarter about loan origination than they were in the past, which helps mitigate overall default risk in the market. He also said that the ratio of mortgage debt service payments versus disposable income is currently at historically low levels, versus its peak in 2007. According to him, both of these factors lead to the unlikeliness of a "2008-esque housing" crash. In addition, Macdowell points out that in comparison to historical levels, current mortgage rates are still considered to be fairly low and while demand has fallen across the nation, Macdowell believes a low housing supply is a reason to buy the dip in existing homes sales.

Finsum:Real estate CIO Jack Macdowell doesn’t expect a 2008-style housing crash as lenders have become much smarter about loan origination and the ratio of mortgage debt service payments versus disposable income is at historically low levels. 

Wednesday, 01 March 2023 04:53

Investors Expecting More Market Volatility

Investors are bracing for more market volatility as traders buy up hedges at the fastest clip since the start of the Covid-19 pandemic. According to Cboe data, call options betting that the Cboe Volatility Index (VIX) will rise are the highest on an average day in February than at any time since March 2020. After not much movement for months, the VIX, which is also known as Wall Street’s fear gauge, rose above 23 last week, its highest level since the first few trading days of the year. Readings below 20 usually signify complacency, while readings above 30 signal investors are looking for protection. The increased demand is due to two reasons. First, when stocks rebounded at the start of the year, investors jumped back into the market, restoring a need to hedge their portfolios. In addition, recent economic data increased the likelihood that the Fed will be forced to continue raising interest rates to slow inflation, stalling the stock rally. The S&P 500 saw three consecutive weeks of declines, which was capped by a hotter-than-expected reading on the personal consumption expenditures price index, the Fed’s preferred gauge of inflation. The CME Group Volatility Index, which tracks volatility in the Treasury market, also recently reached its highest levels in more than a month.

Finsum:Investors are bracing for more volatility in the market as call options betting that the VIX will rise are at their highest mark since the start of the COVID pandemic.

Financial advisors? The bulk of them have the horizon over their shoulder. Nice setting, but you get the drift. Over the next decade, reported last year, about one third of advisors will call it a day. While that’s not exactly raise red flags, what does stand out is that no one’s stepping into their shoes.

The load down: On average, each year, 30,000 people sat for the series 7 examination to become a financial advisor. Now, not is it only closer to 5,000, most applicants are taking it with an eye not on becoming financial advisors, but registered assistants. You read that right.

You don’t need Wikipedia to get the meaning: among clients of advisors who lack a formal succession plan in place, the best clients can do is gird themselves to restart with a new advisor. Problem is, that advisor knows neither them or their goals. Double whammy.

That said, last year, Avantax announced 66 recruits in the fourth quarter, according to

The company was a regular magnet for the year, attracting 258 recruits, Todd Mackay, president of Avantax Wealth Management, the firm’s independent broker-dealer division, stated.


Monday, 27 February 2023 15:14

Kestra Expands Model Portfolio Offering

Kestra Investment Management recently announced that it has launched two new model portfolio series, expanding its offerings for advisors and their clients. The new multi-manager strategies follow the team’s first two model portfolio series, launched in June. The first series is the Active Income Series, which is a new addition to Kestra’s core portfolio offerings. The Active Income Portfolio is a diversified, multi-asset portfolio that incorporates actively managed funds. The portfolio is designed to maximize risk-adjusted total returns while providing additional yield and is available in seven different risk profiles. The second series, the Satellite Series, includes three distinct model portfolios designed to be paired with a core portfolio to address nuanced client needs for income and risk management. The first Satellite Series model portfolio is the Multi-Asset Income Portfolio, which aims to generate higher income than the broad U.S. bond market through a diversified mix of fixed income, equity, and nontraditional assets and strategies such as equity derivatives. The next portfolio, the Tax-Aware Income Portfolio is a diversified fixed-income portfolio designed to generate higher after-tax income than the broad U.S. bond market through a focus on tax-exempt bonds. The third portfolio, the Liquid Alternatives Portfolio aims to diversify sources of risk and return beyond long-only equity and fixed-income exposure by combining a mix of low- and high-volatility alternative strategies that can invest opportunistically in changing market conditions.

Finsum: Kestra expanded its model portfolio offering with two new model portfolio series, including the core Active Income Series and the Satellite Series.

According to a recent announcement, Sanctuary Wealth lured a team with $1.5 billion in assets away from Merrill Lynch Wealth Management in The Woodlands, Texas outside Houston. According to Sanctuary, the seven-person group, which generated about $11 million in annual revenue, is the largest group by assets to join Sanctuary since its 2018 launch. The Merrill team is led by brothers Brent R. and Bradley C. Chappell who inherited the practice from their father, Robert D. Chappell, who retired from Merrill Lynch in 2019. The Chappells have known Sanctuary President Vince Fertitta “for many years” from his days working as a divisional manager at Merrill in Texas before his joining Sanctuary in 2019. Brent Chappell started on his father’s team in 2003 after graduating from the University of Texas at Austin, and Brad joined three years later after graduating from the same school. The group also includes advisors Michael Mills and Spencer Carlson as well as support staff Chel Larkin, Jaymie Wendt, and Brianna Warren. As part of the announcement, Brad Chappell said the following, “By partnering with Sanctuary, we see real opportunities to grow our business that weren’t available to us previously and wouldn’t exist in a lateral move to another wirehouse.”

Finsum:A seven-person team with $1.5 billion in assets jumped from Merrill Lynch to Sanctuary Wealth due to opportunities to grow the business that weren’t previously available to them.

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