Topley’s Top Ten – October 16, 2019

Author

Matt Topley
October 16, 2019

1.Riskier Corporate Debt At All-Time Highs as a % of GDP.

2.ESG Flows Estimated to Be Up to 40% of Equity Flows…This will have impact on sector leadership momentum.

ESG Funds seta record for flows in Q1–Jon Hale

3.Never Saw This Stat But Interesting.

Evans also used this chart of the number of hours of work neededto buy the S&P. “The average person, making the average salary is not a bigholder of stocks,” he pointed out, “but the metric does give a heads up whenthe stock market becomes divorced from the underlying economic trend.”

Can the market keep chugging along in the face of historicvaluations? Evans says it’s possible but investors “will need a theme to fuelthe delusion.”

Fullscreen

One look at this and you’ll get why WarrenBuffett sits on a record cash pile

4.Another Index I Am Not Familiar With…..World Uncertainty Index.

Slowing global growth, Britain’s unclear path toward Brexit,and, especially, swirling U.S.-China trade tensions have contributed to whatamounts to greater uncertainty today. In an attempt to quantify just howuncertain the global political and economic climate is relative to history, ateam of researchers developed the World Uncertainty Index, as shown in thechart below. Clearly, uncertainty ebbs and flows over time, but if you look alittle more closely, you can see an upward trend in the data. It’s thisincrease in uncertainty, particularly the recent spike, that has started tomake its way into policy-making discussions at the Federal Reserve.

Economic uncertainty on the rise

Notes:The World Uncertainty Index is computed by counting the frequency of“uncertainty” (and its variants) in quarterly Economist Intelligence Unitcountry reports for 143 countries from 1996 onward, adjusting for scale. Ahigher number means higher uncertainty and vice versa.

Sources:Vanguard chart, based on data from policyuncertainty.com.

Investment education, resources, & guidance | Vanguard

https://vanguardblog.com/2019/09/11/fed-wrestles-with-uncertainty-in-rate-decision/

5.Rent Adding to “household obligations” Hitting Record Highs.

Whilehousehold leverage (debt-to-income) is low compared to pre-recession levels, weshould pay more attention to financial obligations, which include rent. Thegreen line below shows that households’ total financial liabilities are nowmuch larger relative to debt obligations.

6.Inflation Without Outliers.

Without the Outliers, Inflation Is Running Hot. Fed Has StartedMentioning these Measures in the Minutes

by Wolf Richter • Oct 14,2019 • 64 Comments • Email to a friend

Fed’s Underlying Inflation Measure Hits 3.0%, Hottest in the Data.

“Soft inflation?” The inflation measure by the Cleveland Fed — the“Median CPI,” which isbased on Consumer Price Index data but removes the outliers in the data toreveal underlying inflation trends — jumped 3.0% for September, the highest inthe data series going back to the Financial Crisis, when this measure waslaunched.

By comparison, “core CPI,” which removes food and energy prices,hit 2.4% in August and September, the highest since September 2008:

The Fed is mentioning these kinds of alternative inflationmeasures in the minutes of the FOMC meetings –voiced by “some participants” – to show that underlying trends in inflation arepointing upward, except for a few outliers, such as the re-collapse of oilprices and a few other items that skew the overall results, and to show thatthe “soft inflation readings during the earlier period were transitory.”

7. Can The Economy Predict The Next President?

Posted by lplresearch

“Incredibly, the last 11 timesthere wasn’t a recession within two years of a re-election, the sittingpresident won,” according to LPL Senior Market Strategist Ryan Detrick.“Compare that to the seven times there was a recession, and the incumbentpresident didn’t get re-elected five of those times.”

Asshown in the LPL Chart of the Day, the U.S. economy predicted the winner of 16of the previous 18 elections in which a sitting president was up forre-election. In fact, you have to go all the way back to Calvin Coolidge in1924 to find the last time the economy was wrong regarding the re-election of apresident

8.9 Words You Should Never Say in Sales

By Stephen Boswell andKevin Nichols | @stephenboswell | @kevinanichols

There are some words andphrases that, in selling to the affluent, should never be used. These verbiagemistakes can kill your positioning, make you seem pushy, or showcase asales-first mentality. 

Not only should these words beavoided in sales scenarios, they should be avoided in talks with clients, teammembers, and centers of influence as well. All of these perceptionsmatter. 

Here they are…the words toavoid, an explanation of why they’ve made our list, and somethings to say instead:

“Prospect”

Why: It dehumanizes your mostimportant contacts. Plus, it makes it seem like they are your “targets,” notthe next additions to your client family. 

Instead: Try potential client,future client, or prospective client.

“Objection”

Why: To them, it’s not anobjection. It’s their reason for not moving forward right now. When there arelarge sums of money in play, expect a longer sales cycle and bumps along theway. 

Instead: Try using concern orquestion.

“Discount” 

Why: It cheapens not only yourpricing, but your positioning. Saying things like “we can sharpen our pencils” portraysneediness when you could be portraying strength and confidence.

Instead: When it comes todiscussing fees, use words like fair, competitive, and transparent.

“Customer” 

Why: It connotes short-termand transactional. There are no “customers” of elite financial firms. When youoffer a Ritz-Carlton level of service, you are “Ladies and Gentlemen ServingLadies and Gentleman.” 

Instead: Use clients or familiesto describe your clientele. 

“Obviously” 

Why: If the statement you’remaking is that obvious, you don’t need to state it. Even though you don’t meanit this way, it can show that you don’t think much of their intelligence. 

Instead: Use transitions likenaturally, of course, or as you know. 

“BestClients”

Why: It implies you have worstclients as well. It also prompts people to think about what makes a bestclient. Their assets? Their personality? Is that me? 

Instead: Use phrases like largest,most-complex, or longest-standing.

“Honestly” 

Why: Were you not being honestbefore? We all know this one should be avoided, but for those who say itsubconsciously, it’s a hard habit to break. 

Instead: Just cut it. Replacing itwith frankly, candidly, or sincerely all have the same effect. 

“Affluent” 

Why: Most affluent peopledon’t feel as if they are affluent. They see affluent as those with more moneythan they have. After all, some people have airplanes and yachts. That’s notme! 

Instead: Use terms like well-off,mention significant assets, or describe them by occupation. 

“Busy”

Why: If you describe your dayas busy or hectic or crazy, you’re giving off the wrong impression. People wantto work with those who are productive, yet in control. Scrambling is not adesirable trait. 

Instead: Use words like productiveand share something meaningful you’ve accomplished.

This list could go on for days,but these are some of the most common and avoidable terms. What parts of yourvocabulary could use a tune-up? What about your team? With better languagecomes better selling.