Morningstar's Benz on how inflation, rate cuts hit retirement planning

Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute discusses the firm's research looking at whether campaign promises have translated into long-term outperformance for sectors that were likely to benefit from proposed policies, and while there were positive gains in the immediate aftermath of elections, many sectors underperformed the Standard & Poor's 500 Index over the following four years. As a result, Christopher suggests caution for anyone expecting president-elect Trump's "Drill baby drill" plan to turn into oversized oil-industry gains once he takes office. Todd Rosenbluth, head of research at VettaFi, turns to regional banks for his ETF of the Week, noting that while they have been up sharply since election day, there is reason to expect that this rally has legs. Plus, we have tow interviews conducted at the Active Investment Company Alliance's Fall Roundtable in New York on Nov. 13, where Chuck talked with individual investor Jim Cohen and then discussed gold and how it performs in an economy with falling interest rates but higher inflation with Axel Merk of Merk Investments and the ASA Gold and Precious Metals fund.

Laurence Kotlikoff, professor of economics at Boston University — the founder of Maxifi, which factors economics into personal financial planning — says that while the economy is humming along now, investors should be wary of the potential for trouble, especially stemming from the high levels of tariffs that were a part of President Donald Trump's campaign promises. Kotlikoff — who hosts the Economics Matters podcast — worries that if tariffs are placed at levels not seen since the Great Depression, they could result in dramatic inflation and other problems as other nations respond and retaliate. Kotlikoff also discusses how investors should be thinking about the timing for making Roth IRA conversions now, and how to determine the right amount of life insurance to hold. Jeffrey Hirsch, editor of the Stock Trader's Almanac, returns to the show to discuss the latest print edition of the almanac for 2025, and how a classic effort like a printed almanac fits into a market world that leans hard into technology. Plus Melissa Stephenson discusses a PlayUSA.com study which showed that Americans are struggling with "tip fatigue," with 1 in 3 Americans admitting that they tip less money or less often now than they used to.

Jerremy Newsome, founder at Real Life Trading, says he thinks the stock market has entered another period like the Roaring 20s of a century ago, and while that period ended withthe start of the Great Depression, Newsome says he thinks "we're in the middle right now. ... I see that we have truly three to six good years left of overall, bull sustainable markets before we have that big, big, big meltdown." Jeffrey Hirsh, chief executive at Hirsch Holdings — the editor of the Stock Trader's Almanac, which is known for researching how the presidential election cycles impact the stock market — says he sees the current bull market running at least until the mid-term elections in 2026, and he notes that a Republican president at a time with a Republican-led House and Senate typically tends to result in strong market times. While not the best combination — which occurs when a Democrat is in the White House but Republicans control Congress — conservative policies generally favor the markets. Plus, Ted Rossman, senior industry analyst at Bankrate.com, on a study showing that more than half of Americans made at least one impulse buy last holiday season, driven more often by pursuit of "a good deal" rather than a treat for themselves, and Chuck answers a listener's question about "the biggest risk we are facing today."

Bill Adams, chief economist for Comerica Bank, says his forecast for 2025 now includes fewer rate cuts, slightly higher inflation, and increased fiscal support for the economy, but those conditions are signs of an an economy "that's humming along, continuing to grow, it's not a recession," and he says the risk of a recession in the next year or two is now "back to its historical normal." Charles Rotblut, editor at AAII Journal — the keeper of the American Association of Individual Investors' sentiment survey — discusses how bullish sentiment was on the rise and bearish sentiment on the decline in the immediate aftermath of the election, and that the impact could last for more than the few big-volume trading days the market posted last week. David Trainer, founder and president at New Constructs, revisits Peloton, one of the first "zombie stocks" the company started labeling back in 2022, discussing why the company's recent run — up about 150 percent in the last three months — is not going to save it from the ultimate financial death its numbers say it must suffer. Plus, Alison Hadley discusses a survey on the impact of social media on fashion purchases, which found that social media — and specifically "outfit of the day" posts — inspired the average American to make roughly $250 in purchases over the last six months.

Doug Roberts, Chief Investment Strategist at Channel Capital Research Institute — the author of "Follow the Fed to Investment Success" — says that under the new Trump Administration it is possible to return to a status where goods inflation is declining while wage growth pushes core inflation up, which could lead Federal Reserve chairman Jerome Powell to be reluctant to make further rate cuts. While he expects more after Thursday's quarter-point reduction, he thinks the pace of cuts may be slower than many Fed watchers currently anticipate. Jared Hagen, vice president at XA Investments, discusses the unprecedented growth in interval and tender-offer funds that has happened this year and how the number of funds in registration guarantees that the trend will continue through 2025. And Gwen Merz of the Fiery Millennials blog and her husband Tim Joiner — co-hosts of the FIRE Talks podcast — help Chuck answer a question from a listener whose financial life is off to a great start but who is so busy trying to reduce debt that she's struggling to find a comfortable work-life balance.  

Todd Rosenbluth, head of research at VettaFi, makes the Calamos Standard & Poor's 500 Structured Alt Protection ETF for November his "ETF of the Week," noting that the fund has 100 percent downside protection, making it ideal for investors who were shocked by the election results and who think the market is headed for a downturn. Rosenbluth runs through the complex details on the fund, which caps investor gains at 7.43 percent for investors who are willing to give up some upside potential for protection against downturns. Wall Street Journal columnist Jason Zweig, returns to discuss his recent piece on “trustwashing,” where financial advisers use the media – articles, self-published books, media  appearances and more – to gain credibility that their actions as a planner have not really earned, noting that investors must look past superficial credentials when picking a planner. Plus, Derek Izuel, chief investment officer at Shelton Capital Management, discusses international and emerging markets investing in the Money Life Market Call.

Wall Street Journal columnist Jason Zweig — who recently released the third edition of "The Intelligent Investor," Benjamin Graham's classic that many believe is the greatest investment book of all time — says that 'It used to be that your stockbroker tried to pick your pocket, and now your stockbroker is in your pocket." Those changes in technology make it hard for investors to stay focused on the long-term, which is where most will make their substantive financial gains. Zweig discusses how and why Graham's classic required updating — he last updated the book, adding commentary throughout — over 20 years ago — even though value investing still works well as Graham defined it in the original version in 1949. Steve Sanders, executive vice president of marketing and development for Interactive Brokers talked about the firm's Forecast Trader Market, which effectively allows investors to buy options on political events, economic data releases and climate indicators, ostensibly to hedge portfolios against current events, although in a way that Chuck notes feels more like sports betting than investing. Plus, in The Big Interview,  Andy Wells, chief investment officer at Sanjac Alpha, talks fixed-income investing as the economy expects a rate-cutting cycle to continue with news out of the Federal Reserve coming on Thursday.

Joe Kalish, chief global macro strategist at Ned Davis Research, says he won't be surprised if there is a "normal correction" for the stock market once the presidential election is decided, followed by a pick-up into year's end, regardless of the election outcome. Kalish says he is skeptical that the economy can get to a 2 percent inflation level sustainably without going through a recession, but he does not have a recession prediction in his outlook, which argues for no landing over the next year or two. He expects the market to keep growing, albeit not at the pace seen over the last two years. Larry Tentarelli, editor of the Blue Chip Daily Trend Report, says that he is holding to a year-end target for the Standard and Poor's 500 of 6,000 to 6,100 — a gain of about 5 percent from current levels — provided the presidential election is decided in a timely fashion, so that uncertainty doesn't start to setin and cause unexpected problems. Mona Mahajan, senior investment strategist at Edward Jones discusses the firm's research into caregivers and the sandwich generation, which showed that caregiving responsibilities have sapped the confidence of American women about their ability to save for the future. And while the election results likely won't be known for several days, Mark Hamrick, senior economic analyst and Washington bureau chief at BankRate.com talks about the pocketbook issues that Americans are facing and how the election could impact what happens next.

Greg McBride, chief financial analyst at BankRate.com, says the Federal Reserve has little choice when it meets this week but to follow through on its signals and cut interest rates by one-quarter of a percent, noting that anything larger or smaller than that come Thursday would wind up being destabilizing for the market. The anticipated rate cut, however, may not move all interest rates as expected; McBride noted that mortgage rates actually have surged since the Fed's oversized first cut in September and they may not follow in lock-step with the next move either. Eric Balchunas, senior ETF analyst at Bloomberg Intelligence — co-host of the Trillions podcast — talks about the spate of new, unusual investing ideas that have been turned into ETFs recently — from BattleShares to the oxymoronic single-stock ETFs — and how most of them will go away when the stock market takes its next protracted downturn. David Trainer of New Constructs revisits WarbyParker — which he first put in the Danger Zone as it was launching its initial public offering, but which he says is even more radically overvalued now, and Eden Cooper, founder and managing partner at Drift Capital discusses crowdfunding classic automobiles and the return potential of classic cars.

Mark Newton, Global Head of Technical Strategy at Fundstrat Global Advisors, expects the market to go through a brief correction after the election, but to have turned that into a buying opportunity by the time December rolls around, bringing with it a Santa Claus rally to end the year. Newton says that for all of the worries investors have about the market, the numbers remain solid and while it may not support continued gains like we have seen in the last two years, it should keep the market from a major, protracted downturn. John Cole Scott, President of Closed-End Fund Advisors digs into his firm's data to break down a stellar third quarter for closed-end funds, which saw a significant narrowing of discounts but where he still sees buying opportunities now. James Abate, Chief Investment Officer at Centre Funds — manager of the Centre Global Infrastructure Fund, the top-performing fund in its peer group year-to-date — talks infrastructure investing in The Market Call, and Chuck talks about how the trick-or-treaters at his house on Halloween took to deciding between cash or candy in his annual trade-or-treat challenge.