Money Life with Chuck Jaffe Chuck Jaffe

Ron Sanchez, chief investment officer at Fiduciary Trust Company International, says that as the market settles into long-term grown and moderating inflation, it's a good environment for financial markets to broaden out, where he expects more normal relationships between domestic and international stocks and large-company and small-cap stocks. "The market is never about seven stocks or 10 stocks," Sanchez says, which is "a healthy reminder as we look ahead to make sure your portfolio is diversified ... and not to get too narrow." Speaking of diversification, in the Market Call, Kevin Rendino, chief executive officer at 180 Degree Capital talks about investing in micro-cap and small-cap stocks through the lens of an activist investor. And speaking of activist investors, The NAVigator segment features Rob Shaker, portfolio manager at Shaker Financial Services — who follows what he calls a "discount-capture" investment style in closed-end funds — discussing the moves that fund companies have made to enhance yields, narrow discounts and discourage activist investors, and describes them all as neutral or positive for investors, so long as they understand the impacts on income streams and total return. 

Tom McIntyre, president of McIntyre, Freedman & Flynn, says that "this obsession with Fed policy is misplaced," noting that government spending has helped prop up the economy and hidden weakness in the economy. He's concerned about "overall slippage" in the economy; as an investor who factors the news into his investment choices, McIntyre is staying away from retailers and most financial names, but is gravitating toward utilities and energy producers, as well as companies that are part of the artificial intelligence space without necessarily being the big players. Speaking of the Fed, JoAnne Bianco, investment strategist at BondBloxx, says that she sees real resilience in the U.S. economy, which is why it has rolled along while market expectations moved from multiple rate cuts this year to where it now expects just a single rate reduction. In this environment -- where Bianco is not expecting a significant uptick in defaults caused by high rates -- she likes credit the most among fixed-income opportunities.  Plus, Todd Rosenbluth, head of research at VettaFi picks a hedged-equity fund investing in Japan as his ETF of the Week.

Natalie Trevithick, head of investment grade corporate bonds at Payden & Rygel, says that companies prepared for the high-interest rate environment in advance, in ways that have allowed the bond market to avoid the rise in defaults that typically hits during rate hikes, but that also contributed to stronger economic growth, which has allowed inflation to be sticky without a lot of pain to the economy. It's part of why the inverted yield curve hasn't indicated a recession yet, and Trevithick thinks the Fed should be able to pull off a soft landing for the economy if it starts cutting late this year or potentially in 2025. Cassandra Happe discusses WalletHub's just-released 2024 Social Media Shopping Survey, which found that most consumers say social media is contributing to their bad spending habits and mistakes. JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, brings her top-down approach to the Market Call.

Scott Helfstein, head of investment strategy at Global X ETFs, says that he has no problem with higher-than-planned inflation levels so long as nominal economic growth is there. "Investors don't really profit off of Federal Reserve changes," he says, "they profit off of growth in the economy, and that's what we should be focused on." Gene Peroni, founder of Peroni Portfolio Advisors, says that "The market is sensing something quite significantly positive on the horizon, based on its trends." He expects economic strength and rising earnings to keep growing for roughly nine months or more, and says that downturns and setbacks will remain buying opportunities for now. Plus, Sam Burns, chief strategist at Mill Street Research, brings his earnings-expectation driven style of investing to the Market Call.

Karl Mills, partner at Cerity Partners, says that the U.S. economy remains strong, there are some headwinds facing the stock market and that investors should go back to basics — diversifying across borders and industries and looking for investments they will hold long-term. Mills made it clear that he's optimistic for the long term, noting that investors are more likely to be thrown off by the problems that are not yet obvious — "It's not the monster in the closet that gets you," he says, "it's the one under the bed that you're not paying attention to that is going to get you" — so they need to have a time horizon that looks beyond those issues. Ed Slott, the founder of IRAhelp.com, returns to the show to discuss his new book, out this week, “The Retirement Savings Time Bomb Ticks Louder,” suggesting that converting traditional retirement accounts to tax-free Roth accounts is going to be worth it for most investors, noting that paying the taxes now is a form of insurance against Congress changing laws and raising taxes in the future. Plus, Kyle Guske, investment analyst at New Constructs, talks about "overstated street earnings," and shows why the stock price of NRG Energy is dangerous relative to the real value of the company.

Brad Lamensdorf, strategist at the Lamensdorf Market-Timing Report and manager of the Ranger Equity Bear ETF, says there's "a lot of stock in a lot of weak hands," which tends to lead to a serious correction, and he says the market is due for a 15 to 25 percent pullback. Further, he notes that bear market corrections tend to "be more significant" in a high-rate market like the one being faced today; Lamensdorf notes that while the market is near record highs and has gone up sharply this year, so too has his bear-market fund, highlighting just how thin the bullish sentiment and market breadth are. Lamensdorf says that investing in the Magnificent Seven stocks has been great stock picking in a market that has not favored stock pickers, highlighting that this "is a great long-short stock-picking environment right now." Dave Lamb, head of closed-end funds at Nuveen, says there is a "much more aggressive form of activism today than what we saw years ago," driven mostly by discount-arbitrage opportunities rather than any evaluation of a fund's management. He discusses what fund sponsors, including Nuveen, are doing to make closed-end funds more attractive to the public, but less appealing to activist shareholders. Plus Daniel Dusina, chief investment officer at Blue Chip Partners in Michigan, discusses "underappreciated quality stocks" in the Market Call.