Great Debate
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 15 January 2021
⏱️ 15 minutes
🔗️ Recording | Apple Podcasts | RSS
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Summary
The Crux of the Matter
If you believed that interest rates were going to be 0-2% would you invest capital differently than if you believed they would be 5-7%?
If you believed that inflation would run 1-3%, would you invest differently than if you believed it would run 4-6%?
Does one’s view on interest rates and forward-inflation impact their expectations for P/E ratios (market valuations)?
If credit is going to tighten (ease of access to capital and cost of capital), would that alter one’s allocation to corporate credit, private equity, public equity, and a host of other risk asset classes?
Would one’s view on the U.S. dollar potentially influence their allocation to domestic vs. foreign assets?
And regardless of how one’s views on interest rates, inflation, credit, and currency impacts the decisions, they make on investment decisions, will all of these things impact the expected return on all asset classes (whether or not it alters your weightings in such asset classes)?
And if these things impact expected returns in various asset classes, does that have practical significance to one’s financial planning, accumulation goals, withdrawal goals, and other such tangible dimensions of wealth management?
The answer to every question above is YES, and pretty much all emphatically so, which means that every person reading this has a real dog in the hunt when it comes to the great economic debate of our time:
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.3 | Hello, welcome to this week's Dividend Cafe. |
| 0:15.9 | I am excited to have you here listening to the podcast watching this week's video. |
| 0:20.7 | For those who don't know, my name is David Bonson, the chief investment officer here at the firm, |
| 0:25.0 | and we like to give you our weekly best thoughts and macro commentary, which is meant to be a bit |
| 0:31.6 | different than our daily DC Today, which we do every Monday through Thursday for your reading pleasure, the DC Today.com, |
| 0:40.9 | where we just give a simple snapshot of markets and a number of other categories each and every day. |
| 0:48.6 | But the Dividing Cafe today is going to be a bit different. |
| 0:52.6 | I think I spent all the time last week in the immediate aftermath of what had happened |
| 0:56.5 | out of Washington, D.C. talking about why a lot of the political issues and particularly that unrest |
| 1:02.7 | had not translated into difficulties in markets. |
| 1:06.0 | Markets have really come out strong this year, particularly for those things that were invested in that were out |
| 1:12.6 | of favor last year, very, very strong start to 2021 in dividend growth and energy and financials |
| 1:19.3 | in particular. Well, I don't, so hopefully I answered those questions last week about the |
| 1:26.3 | disconnection between markets and some of the |
| 1:28.4 | tremendous and unfortunate actions of what are taking place around the country and a variety of |
| 1:34.2 | venues and overall just political and tribal and divisive climate in which really our country's |
| 1:40.7 | been in for some time. So I'm not going to talk about any of that. I think the last 40 seconds I talked about it more than I said I was going to. |
| 1:47.8 | Dividycafe.com, the written commentary this week, doesn't talk about any of it at all. |
| 1:52.3 | And that's because if there's anything that I know will give people a reprieve from the political and the toxic and the tribal, it's macroeconomics. And I know this stuff is |
| 2:03.1 | really a great respite and escape for all of you. So if you detect my sarcasm, it's only because |
| 2:12.1 | I'm assuming some of you don't think that's true. But I actually do. And I make the comment. |
... |
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