August 2023
Although many investment firms place an emphasis on stocks and bonds, other assets tend to be more resilient in volatile times. Jeff says we are willing to look different than the rest of the industry because we believe our focus on the alternatives space is in our clients’ best interest.
Clients will be able to meet fund managers, learn more about our investment strategies, and hear live conversations about various financial planning topics at our Investor Symposium on October 12th at Westlake Village Inn. Topics will include cryptocurrency, AI, navigating financial decisions with one’s spouse, complexities of the sandwich generation (people who are responsible for taking care of their children as well as their aging parents), real estate investments, private lending, and more.
Details coming soon!
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Watch previous episodes of THE FINANCIAL COMMUTE here:
Ep. 47 Your Guide to Biden's Student Loan Debt Forgiveness: Who's Eligible?
Ep. 46 What the US Credit Downgrade Means for You
Hello, everybody, and thank you for joining us for another episode of The Financial Commute. I'm your host, Chris Galeski, joined by CEO Jeff Sarti. Hey, Chris. Jeff, thanks for joining us.
Happy to be here.
I'm really excited to have this conversation with you, not only about our investment philosophy and kind of why we do things in the way that we do, because at times it can feel a lot different than the rest of our peers or the industry. But I'm more excited to talk about the investor symposium that we have coming up on October 12.
Yeah, and it got me thinking about one of the main problems in this industry is the fact that most advisors are using traditional stocks and bonds to help meet a client's, you know, portfolio management needs. But clients are wanting so much more than that. They're wanting, you know, good advice around, you know, how do I generate income and do I need long term care and how do I set up my estate plan and take care of my kids?
And is it okay to buy this house? And beyond just the planning conversation, is there also wanting to have different conversations around investment? Yeah. And when I think about this line up for the investor symposium that we have coming up, it blows me away how much we do outside the traditional stocks and bonds and mutual funds for clients.
We do a ton. We do a ton, and it's because it's been many years in the making. And I mean, this is something we've been doing back now well before you and me, I mean, going back several decades. So yeah, we have a lot of history and it's something we're passionate about in many ways. We think we are really one of the only ones that are doing this.
And the reason we're doing it is because we believe in this challenging stock and bond environment. We have to, we have to look for other opportunities to generate income and build resilient portfolios.
But even even if it wasn't a challenging environment for stocks and bonds, as a fiduciary, are we doing the best job we can for our clients by ignoring everything that's not a stock or a bond and saying, “No, we can't or shouldn't invest in that because that's not what our industry tells us to do.”
I'm glad you hit on that because a lot of the messaging that Meghan Pinchuk, our CIO, and I, we talk a lot about our concerns with the world and why we're investing in alternatives to protect against those risks. But you hit on a key point as well. There's just so many other opportunities from an optimistic point of view.
I mean, just always interesting opportunities. The world is always changing. We're always changing as a result. So, yeah, I mean, it would just be frankly, be boring if we were in stocks and bonds.
And I think that that's what's interesting to me about being here. And I've spent time other places that, you know, traditionally used, you know, stocks, bonds, mutual funds, some form or structure of private equity or real estate. But it's not in quite the same degree that that we're doing here at Morton. And it didn't feel wrong. It didn't feel bad.
But being here, I get to learn so much about things that we do, things that we don't do and why we say no, but why it might be interesting. It's a lot of fun to talk about some of those unique areas.
It is within the four walls here. It's an exciting atmosphere because there's so much creativity. We're always looking at new things and obviously, most of them don't pass the test. And we don't move forward with a lot of these investments. But just the nature of always seeking new opportunities, it's, as you said, just a very intellectually stimulating environment to be a part of.
You know.
We're going to get into the investor symposium here in one question. Okay. But a question that we get a lot from clients and prospects and people is why do you guys invest outside of stocks and bonds? But the rest of the industry kind of just sticks with their normal investments. Why is it in our DNA?
Why is it in our DNA? The simple answer is, and it's one of our key tenants, as you know, true diversification. Everything we were taught, our whole industry was taught the tenets of diversification. Right. You should be invested in a handful of stocks, not just one. You should be invested in stocks and bonds, not just stocks or bonds.
The problem, though, with the industry is they stop there. And the challenge with that limited approach of, let's say, having a diversified pool of stocks and some bonds is, yes, it will that will feel diversified in most environments. But when you really, truly need diversification-years like 2022, last year, when the markets, everything falls apart. 2008, that those simple diversification rules don't quite cut it and that's why we're just so passionate of finding other opportunities that will just march to the beat of a different drum.
Yeah, so that's really one of the main reasons.
That that is by far one of the main reasons. I think another barrier to entry for a lot of other firms is it takes a lot of people power, you know, to operate a business that manages investments that are both in the traditional sense and then the private structure as well.
I mean, as you know, and we have a whole team here, a team in various departments from research through administration compliance, you name it. That's just a lot more manpower than a typical firm of our size would have. Because like you said, it's a lot of work. One other aspect related to that is a lot of firms intentionally don't really want to move very aggressively into the alternative landscape is because in many ways you're really not paid to look differently.
There's safety in just sticking to stocks and bonds because that's what our industry does. And listen, our industry is doing great across the board, right? People tend to stick with their advisors, even if they're only in stocks and bonds. So many firms are not really incentivized to stick their neck out there and they don't have the willingness to look different.
You know, obviously we take a very different approach. We're more than willing to look different if we believe the types of solutions we're searching for are in the client's best interest.
Yeah, definitely. And that rings true. I mean, we've got the investor symposium coming up on October 12th. It's going to be a long day from 10:30 in the morning until a little bit after 3:00 in the afternoon, cocktails and appetizers after that, you know, and when I look at we're going to have a couple of different stages, one that's focused on investments and one that's focused around areas of financial planning are different topics there.
Just the investment stage alone from, you know, attractive returns through creative private lending to real estate lending to the real estate market, to dividend paying stocks. We're even going to have Nik Bhatia come back on and talk about, you know, Bitcoin and crypto.
We’re gonna have a session on AI.
It's pretty exciting to be able to have experts come talk to us and our clients about why this is valuable and how we are protecting them.
One aspect that you hit on will be why I'm so excited for the symposium is it's a forum for our clients to meet these advisors that we're so passionate about. These are these investment advisors face to face. It's one thing to hear the stories from us and Meghan and Sasan and the rest of the investment team. But it's another thing.
I mean, these investment advisors are real estate partners or private lending partners, etc. They're really impressive individuals. So I'm just really excited again for our clients to be able to hear directly from these advisors themselves.
Awesome. Anything else you'd like to share about the investor symposium itself?
Yeah. So on the flip side, you mentioned the investment side. The other side, I think we're going to call it the Couchside Conversations. I think will be really lively. It'll be in essence two people having a discussion across a variety of financial planning topics, anything from tax to insurance. But there's some really other off the beaten path topics.
It's things like teaching financial literacy to your kids. So I think Kevin Rex, one of our advisors, is going to be teaching that. There's another session I think we're titling the Battle of the Spouses.
Yeah, Battle of the Spouses, financial edition.
So that's going to be one of our advisors, Beau with his wife, and they're going to be having standard discussions that we all have with our spouses. Hopefully there's a lot of agreement, but obviously probably some tensions between spouses on what you agree with regards to your finances versus what you disagree with. So I think that should be a lively interactive debate as well.
So we're going to have a lot of really interesting Couchside Conversations.
I don't disagree. I mean, even in my household, I feel like we're on the same page an awful lot on money. But then there's a couple of scenarios where we're not, you know, I mean, my wife is right. We should probably take a few more vacations and enjoy a little bit more today. You don't know what the future is going to hold.
So you mentioned taxes. We've got boost your business and save on taxes and the modern investor dilemma, complexities of the sandwich generation.
The sandwich generation- so that's an interesting one. I'm actually going to be participating in that one. It's navigating, being sandwiched between taking care of your kids, navigating their schooling, carpooling them to schools, etc., but then potentially also working and dealing with your aging parents and being sandwiched in between those two responsibilities.
Yeah, these are some these are some great topics and really excited about the format. And so it's going to be at the Westlake Village Inn on October 12th.
Yeah, perfect. And just going back to kind of ourselves and the industry, dealing with alternatives, normally people kind of hear that word and they have a reaction to, Oh, I've experienced that. Someone in my family or myself or I have invested outside of stocks and bonds, maybe real estate and the alternatives. And that's one reaction. And some hear the word alternative and go, oh, wow, that sounds risky because I don't hear it in the news as often as I hear stocks and bonds.
And so your definition of an alternative...
Is....that's a broad term, but it really is anything other than stocks and bonds and the wonderful part about that simplistic definition is there's a whole world of opportunities beyond stocks and bonds, and they come in all shapes and sizes. And just because it's different doesn't mean it's necessarily risky. And so much of what we do is much more on the conservative than in line around principle protection and cash flow.
And so, I mean, again, as you hit on it earlier in the discussion, there's just a breadth of opportunities beyond stocks and bonds and know it's a broad term. It means a lot of things. But that's what we got to search through the needle in the haystack to find those special opportunities.
And look, many of those things outside of traditional stocks and bonds are things that we do and touch and feel every day, whether it's physical, real estate or, you know, going over to to the lake and, you know, getting a boat from the boat Marina. Right. It's vending machines. It's car washes. It's even businesses that we work and deal with or own on a day to day basis.
And it's investing in all of those different types.
I'm glad you gave even some of those simple examples because in so many ways, the opportunities that we're attracted to are really actually fairly easy to understand. I know we're all drawn to stocks, particularly because they're familiar to us, but again, we've hit on the same in prior conversations the ability to understand a piece of real estate in our apartment building.
We actually find that a lot more manageable than to understand a company as complex as Amazon or Apple, which has facilities all over the globe.
Supply chain issues.
I mean, the complexities are enormous.
Without a doubt. It's crazy how difficult you can make investing and how simple you can as well. I mean, even just in real estate, it's in the headlines lately saying, oh, you know, real estate in for, you know, a lot of trouble with rising interest rates. And, you know, that's the case in certain sectors in real estate, but not others.
You know, storage or multifamily might do pretty well and commercial or office could struggle. But, you know, you can't paint everything with a broad brush.
Real estate is a great example, right? Just like stocks come in all shapes and sizes, you can have different sectors from health care to technology to financials with stocks. Same with real estate. You hit on it. Office is going to behave very differently. The retail is going to behave very differently than apartment buildings. And that's our expertise to really navigate through those various asset classes.
This is going to be fun. So save your calendar, save the date for October 12th. Formal invites should go out next week.
It’s meant to be a day where people can pop in and pop out of certain sessions that we're going to have with our other advisors and fund managers and we look forward to seeing everybody there.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.
