Wealth Management
American consumers are increasingly uneasy about the economy, as reflected in multiple sentiment surveys. The Conference Board’s Consumer Confidence Index fell sharply in February, marking its third consecutive decline amid rising inflation expectations.
Small businesses and homebuilders are also voicing concerns, with uncertainty reaching record levels among independent business owners. The Federal Reserve is closely monitoring inflation expectations, as shifts in consumer sentiment could influence spending behavior and long-term price stability.
While consumer confidence doesn’t always predict spending, a new Wells Fargo survey suggests many Americans, particularly younger generations, plan to cut back due to economic uncertainty.
Finsum: Rising costs for essentials like dining out, fuel, and entertainment are prompting noticeable changes in financial habits and part of weakening sentiment.
After leading the stock market in 2024, the communications sector is once again the top performer in 2025. Despite the dominance of tech giants like Nvidia and Palantir, communications continues to excel, largely driven by Meta Platforms and Alphabet, which make up nearly half of the sector.
The Vanguard Communication Services ETF offers investors an affordable way to gain exposure to these companies, though its holdings are heavily concentrated.
Alphabet and Meta thrive on high-margin advertising models, unlike media and telecom firms that require heavy capital investments. Both companies are aggressively investing in AI and cloud infrastructure, yet their valuations remain attractive compared to other mega-cap tech stocks.
Finsum: As long as these two firms continue their strong performance, the communications sector—and funds tracking it—could potentially keep outpacing the broader market.
Cryptocurrency is making its way into retirement accounts, but it's not the right fit for every investor. Crypto IRAs, also known as bitcoin IRAs, allow individuals to hold digital assets like bitcoin and ether within tax-advantaged accounts.
While these accounts offer potential tax benefits—especially within a Roth IRA—they come with high fees, regulatory uncertainty, and extreme price volatility. Unlike traditional brokerage firms, crypto IRA providers operate under different standards, adding another layer of risk.
Some investors may find bitcoin ETFs a lower-cost alternative to direct crypto ownership within an IRA. Regardless of your approach, diversification remains crucial to balancing the risks and rewards of crypto in a retirement portfolio.
Finsum: Crypto is a very good alternative to integrate into the portfolio, but most investors either over or under index so be careful when integrating into your portfolio.
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JPMorgan Chase is committing $50 billion to finance riskier companies backed by private equity as it expands into private credit. The bank has already deployed $10 billion across more than 100 deals since launching its direct lending push in 2021.
Traditional lenders, including Citigroup and Wells Fargo, have formed partnerships with private credit funds, while Goldman Sachs and Morgan Stanley rely on their wealth management divisions. JPMorgan's move reflects the sector’s rapid growth, fueled by insurers, pensions, and sovereign wealth funds seeking higher-yielding investments.
Private credit has increasingly replaced traditional debt markets, especially during market downturns, prompting banks to reclaim lost ground. While demand fluctuates with market conditions, JPMorgan aims to bolster its role in this evolving financial landscape.
Finsum: Banks are making a huge splash in the recent PC market and its worth monitoring how it evolves.
The transition away from zero interest rate policy (ZIRP) wasn’t painless, requiring sharp rate hikes and a challenging bear market before monetary conditions began resembling pre-2008 norms. Now, with higher government bond yields, investors have a genuine risk-free income opportunity, prompting a rethinking of portfolio strategies.
Angelo Kourkafas of Edward Jones suggests that as cash yields dip below bond returns in 2025, bonds are poised to outperform, restoring their historical role in balanced portfolios.
While trade policy uncertainty could complicate this outlook, he expects Canadian bond yields to stay rangebound, with income rather than price appreciation driving returns. He sees this fixed-income strength complementing a more measured equity rally, with a diversified stock-bond mix offering steadier returns in the year ahead.
Finsum: Oversized cash positions, could become a portfolio drag, especially for conservative investors who could lock in reliable income with bonds.
The rise of separately managed accounts (SMAs) is reshaping the financial services industry, shifting brokers from commission-driven sales to fee-based consulting focused on long-term client relationships. However, this transformation remains incomplete, as many advisors misuse SMAs, treating them like expensive mutual funds rather than customizing portfolios for individual needs.
Despite SMAs' advantages, such as tax-loss harvesting and tailored asset allocation, few brokers fully leverage these features, with customization rates alarmingly low. A significant hurdle is inadequate diversification, especially as lower account minimums make it difficult to properly spread investments across multiple managers and styles.
To address these challenges, brokers need better training, more robust technology platforms, and a commitment to understanding both their clients and their investment managers.
Finsum: Ultimately, success with SMAs requires not just offering the product, but delivering ongoing service, customization, and disciplined portfolio management—a shift that, while slow, seems inevitable