Wealth Management
Real estate has long been a cornerstone of wealth creation, but the responsibilities of being a landlord can be daunting. For those seeking passive income without the hassle, REITs like Realty Income Corp. offer an appealing alternative.
Known as “The Monthly Dividend Company,” Realty Income has a history of reliable payouts, currently offering a 5.59% dividend yield. However, REITs do tend to fluctuate more than underlying rents.
Investors looking for more direct involvement without the landlord duties might consider platforms like Arrived, which allows fractional investments in rental properties, combining monthly income with potential property appreciation. Both options provide avenues to invest in real estate without the headaches of property management.
Finsum: As interest rates fall yield seekers might consider real estate as an option to generate income, with fluctuations in equities markets.
The 2024 Olympics wrapped up with the United States leading the medal count, claiming a total of 126 medals, including 40 golds. China and Japan followed, securing 40 and 20 gold medals, respectively.
In basketball, the U.S. women's team maintained their dominance, winning their eighth consecutive gold medal, showcasing their exceptional skill and teamwork in an incredible finish over France. The U.S. men’s team slipped by Serbia in a comeback in the semifinals, and Stephen Curry’s electric performance secured the gold in the finals.
The Olympic ceremonies closed with Tom Cruise dropping down from the ceiling and carrying the Olympic flag off to Los Angles as they prepare to host in 2028.
Finsum: While Los Angles surely has an uphill battle when it comes to infrastructure, the Olympics had incredible viewership and engagement which is promising for 2028.
The recent market gyrations and decline prompted some retirement investors to react by shifting their 401(k) investments from large-cap stocks and target-date funds to safer options like stable-value, bond, and money-market funds.
The trading volume was nearly 700% the usual level, marking the highest activity since March 2020, during the onset of the COVID-19 pandemic. Despite the market's volatility, most 401(k) participants did not alter their accounts, but those who did generally moved towards more conservative investments to mitigate risk.
The S&P 500 and Dow Jones Industrial Average both showed slight gains by the market's close but remained below their mid-July highs. However stable value funds received a bulk of the inflows at just over 60%.
Finsum: While the recent sell off was prompted by international currency fluctuations, expect more volatility this fall and potentially more inflows into stable value.
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Treasuries gained momentum following a weaker-than-expected U.S. producer prices report, reinforcing the potential for the Federal Reserve to lower interest rates more aggressively. The two-year yield, which closely mirrors Fed policy expectations, fell by 8 basis points, while the 10-year yield decreased by 6 basis points.
Market participants are now eagerly anticipating the upcoming consumer price index (CPI) data, which could further influence rate-cut expectations. However, some Federal Reserve officials remain cautious, emphasizing the need for more economic data before supporting any rate reductions.
Despite recent market volatility, with shifts from expectations of a soft landing to a hard landing, uncertainty persists.
Finsum: Markets thought there was going to be an emergency Fed meeting last week, but look to Jackson Hole for better clarification.
The July Consumer Price Index (CPI) data indicated that inflation is slowing, prompting speculation about a potential interest rate cut by the Federal Reserve in September.
Ken Mahoney, CEO of Mahoney Asset Management, suggests that investors should focus on large-cap stocks, which have been performing well, particularly in comparison to small-cap stocks in the Russell 2000, where the majority of companies are unprofitable.
He also expresses caution about sectors such as autos, airlines, and retail, noting a lack of enthusiasm in those industries. Keep in mind this combination of size and industry for the fall.
Finsum: It’s important to keep an eye on leverage as interest rates fall this factor will greatly help the more levered companies.
As custodians in the independent advisor market undergo mergers and consolidations, advisors are increasingly finding it challenging to secure a stable home for their clients' assets. Many advisors are opting to use multiple custodians to mitigate risk and increase efficiency, akin to diversification in investment portfolios.
However, frequent changes in custodial arrangements add layers of complexity and concern. This instability can lead to tedious processes like transferring accounts. The landscape is further complicated by the rise of niche custodians and specialized services targeting specific needs, such as real estate or gold investments.
The trend of using multiple custodians is driven by the need for diverse capabilities and the ever-evolving market dynamics, including mergers, competition, and new technologies.
Finsum: Getting a fuller picture of the technology and services offered by different custodians is a huge benefit.