Wedbush Securities Welcomes Financial Services Veteran Erick Renderos to its Expanding Products Group, as Vice President, Product Manager
Los Angeles, CA – September 1, 2021 – Wedbush Securities, one of the nation’s leading independent financial services providers, is pleased to announce Erick Renderos has joined Wedbush Securities as Vice President, Product Manager. His addition represents the firm’s ongoing commitment to its Financial Advisors and client service. Erick will be based out of the firm’s Los Angeles office and report to Senior Vice President, Head of Products Group Jim Ely. With over 20 years of experience in the financial services space, Erick has mastered multiple facets of the industry and brings with him a wealth of knowledge from both the sell side and issue side of the business. Prior to joining Wedbush, Erick started his career in finance at Wachovia, moving on to Hilltop Securities as a Fixed Income Trader and eventually becoming the Municipal Debt Coordinator for the City of San Diego where he managed the city’s outstanding debt, CFD bonds and assets for the city’s projects. “The fast-paced nature of this business has always been one of my favorite aspects. Having your finger on the pulse and a huge sense of ownership over your work is what brought me back to the sell side,” stated Erick Renderos. “I look forward to working closely with our financial advisors and being their go-to resource for information and expertise for our product offerings. Jim Ely adds, “As Wedbush continues to expand its products and services to better serve our clients, Erick is the perfect fit for his new role where he will be working closely with our financial advisors. Erick received his Bachelor’s degree in Business and Marketing from the University of Southern California. He is based in the Los Angeles area and enjoys giving back to his community, traveling, riding e-bicycles and playing with his beloved golden retriever, Barkly. Erick Renderos Vice President, Product Management About Wedbush Securities Since our founding in 1955, Wedbush has been a leader in the financial services industry, providing our clients, both private and institutional, with a wide range of securities brokerage, wealth management, and investment banking services. Headquartered in Los Angeles, California with 100 registered offices and nearly 900 colleagues, the firm focuses on client service and financial safety, innovation, and the utilization of advanced technology. Follow us on LinkedIn, Twitter, Facebook, and Instagram.
Should Retirees Look Beyond Traditional Income Strategies?
As investors approach retirement, they need to look at their investing strategy in light of their retirement income needs. This is often a time when many investors transition their investment portfolios to lower risk investments that will generate the level of passive income they need in the coming years. Relook at traditional income strategies Traditionally those in or approaching retirement would have looked at passive income investments like bonds, CDs, dividend paying stocks and other similar types of investments. In today’s environment these types of traditional income generating options may not throw off enough income for retirees. Interest rates have dropped, and bond yields have fallen as well. A number of traditional dividend paying stocks have cut or postponed payments due to the pandemic The current inflationary environment is less than ideal for yield-focused investors, especially retirees. With the acceleration of business activity and the rise in prices for food and a number of other consumer staples, the prospects for increased inflation are present. Inflation is the enemy of fixed income investors and of retirees who may be on a fixed or semi-fixed income. Deborah Stokes, Financial Advisor with Wedbush Securities in La Jolla, CA says, “With bond yields stubbornly low, looking beyond traditional income strategies can be advantageous for investors, especially retirees living on fixed incomes. For investors holding individual bonds which may have appreciated in value as rates have fallen, opportunities exist. One strategy would be for appreciated bonds to be sold and proceeds reinvested into income focused closed-end funds.” She adds, “This strategy can provide investors an opportunity to lock in gains and increase income by investing in a diversified portfolio of income producing securities that may have the added benefit of inflation protection.” Alternative income strategies to consider in today’s environment There are a number of alternative income strategies that investors seeking yield can explore. Income-focused closed-end funds as suggested by Ms. Stokes are one such strategy that falls under the pass-through securities umbrella. Stokes says, “Pass-through securities, such as closed-end funds, can offer retirees a good source of increased income and portfolio diversification in this low interest rate environment. Asset managers have risen to the occasion, creating new funds that hold a variety of income producing investments from dividend paying stocks, bonds and floating rate loans to fixed-income portfolios, or a combination of each. Investors can choose from funds constructed of diversified portfolios with a focus on maximizing current income, many that pay monthly, providing investors the added benefit of a more level income stream.” Four types of pass-through securities investors might consider: Real Estate Investment Trusts or REITS offer a tax-efficient way to invest in real estate without having to actually purchase properties. REITS invest in various types of income producing properties or mortgages. By rule, REITS are required to pass-through a portion of the income produced by their investments to the shareholders. Closed-end funds are pools of investments such as stocks or bonds and are often brought to market via an IPO process. CEFs are traded on the stock exchange like an ETF, but they have many of the characteristics of mutual funds. CEFs generally offer higher yields than open-end mutual funds. Business development companies (BDCs) are publicly traded entities that help small to medium-sized businesses grow through investments in them or via lending to these companies. In order to attain BDC status, the entity must invest at least 70% of its assets in companies with less than $250 million in market capitalization. Master limited partnerships or MLPs are funds with a hybrid structure that combine aspects of a partnership and a corporation. Many MLPs focus on the oil and gas industry and invest in companies engaged in pipelines, distribution and refining activities. The distributions from MLPs offer a degree of tax shelter for investors. Many pass-through securities offer consistent and tax-efficient income that can be beneficial to retirees in today’s challenging income investing climate. A note of caution from Edward Zubow, Investment Advisor with Wedbush Securities in Scottsdale, Arizona, “With regard to closed end funds, I think it is important to warn people that CEF’s may offer higher and more attractive yields, but they may also come with significant hidden risks. CEF’s don’t adhere to the same rules as traditional mutual funds. As such, they can, and oftentimes do, utilize as much as 30% leverage in the portfolio to generate the attractive yields that some higher yielding CEF’s offer. Investors who utilize CEF’s need to understand that, because of the use of leverage, they should expect, and be able to tolerate, much greater and disproportionate volatility if and when markets move against them.” This is a good point and income seeking investors should understand the pros and cons of any type of income generating investment they are considering. Your Wedbush Financial Advisor can help you choose the right investments for your portfolio based on your goals and risk tolerance. Looking to build a financial plan based on your goals while considering market trends and risk factors? Click here to check out our approach to Wealth Management. Disclosure These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.
The Financial Impact of the Pandemic for Each Generation
A survey conducted by Greenwald Research in early 2021 showed that 41% of millennials and 39% of Gen Xers indicated that the pandemic has at least some negative impact on their finances. This compares with 33% of late baby boomers (those born between 1955 and 1964); 29% of early boomers (born between 1946 and 1954); and 25% of those who are older than this. Edward A. Zubow, Investment Advisor for Wedbush Securities in Scottsdale, Arizona points out, “Many businesses were forced to lay off, at least temporarily, a significant amount of staff and, often times, that came at the expense of less tenured, not highly compensated and younger employees. Because many of them lost their jobs, many of them had to use the penalty free 401(k) withdrawals offered by the CARES act just to survive. Many of those who were fortunate enough to have savings to live off of couldn’t really afford to run out and open an IRA just to compensate for the lost ability to contribute to their long-term retirement savings. For those younger employees that were fortunate enough to hold on to jobs, many of them saw the employer match feature of the company 401(k) plans suspended – in some cases indefinitely.” The financial issues faced by millennials and Gen Z during the pandemic for many were just another set of issues they have faced, most notably the recession and financial crisis of 2007-2008. How the Younger Generation compares to Older Generations One notable finding in the Greenwald survey was that 64% of the millennials surveyed indicated that they have shifted their financial focus to goals with a duration of a year or less, versus focusing on longer-term goals like retirement. In contrast, about two-thirds of early boomers felt that they were still on track towards a comfortable retirement in line with their goals. The survey results indicated that 57% of millennials and 49% of Gen Xers were worried about the impact that the pandemic and the resulting financial issues including job loss or reduced compensation may have on their ability to save for retirement. They expressed concerns about being able to maintain their standard of living and to be able to accumulate enough retirement savings to cover things like healthcare in retirement. During the pandemic some 40% of millennials and 33% of Gen X indicated that they had experienced either a job loss or reduced compensation of some sort during the pandemic. The younger generations have concerns about job security and are very concerned about their debt levels getting in the way of their ability to save for retirement. Student loan debt is a major component of these concerns. Delaying or changing retirement The pandemic seems to have had an impact on the retirement plans of workers across all generations. The survey results indicated that about 35% of all workers have indicated that they have at least considered changing their target date to retire, with most of those indicating they are considering a delay in their retirement date. In addition to any impact on when they might retire, Greenwald indicated in their survey 38% of the study respondents indicated that the pandemic has changed their view of what their lifestyle in retirement might look like. Additionally, 55% of the pre-retirees surveyed indicated they didn’t see the point of retiring during the pandemic as they likely would not be able to do the types of activities they had planned for their retirement. The pandemic is one of those life changing events on many fronts. The impact on many people’s finances, including their plans around retirement has been profound. If you are feeling unsure about your retirement planning, please feel free to contact one of our Wedbush Financial Advisors for help in reviewing your situation and managing your investments to help achieve your goals. Looking to build a financial plan based on your goals while considering market trends and risk factors? Click here to check out our approach to Wealth Management. Disclosure These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.
Will Food Costs Continually Rise?
One of the areas that has been hit by inflation over the past year is the cost of food and other grocery items. From the COVID lows in March and April of 2020, we’ve seen food prices increase by 5% or more over the past year. There are a number of factors including consumer demand with more of us staying at home during the pandemic that have contributed to higher food prices. Some of this was due to consumer hoarding of a wide range of food items, in addition to the well-publicized hoarding of toilet paper. Especially in the early stages of the pandemic, we saw supply chain disruptions due to the implementation of protocols to keep workers safe during the production process. Consumer behaviors Consumer behavior at the grocery store has changed due to the pandemic. Many consumers have begun to shop more frequently and to spend more on food when they do shop. This is due to concerns that have lingered from the initial phase of the pandemic and that now persist with the surge in the Delta variant. Foods that have been the hardest hit Beef and pork prices have not increased much from levels seen last year, but this may be due to the fact that we saw significant price increases in beef and pork last year. Overall beef prices are up about 13% and pork prices about 11% from the beginning of the pandemic. Other food items that have seen significant price increases from June of 2020 to June of 2021 according to the Bureau of Labor Statistics include: Bacon +15.6%. Whole milk +11.2% Ground coffee +1.9% Bananas +1.2% Why are food prices rising? Corn prices provide an example of why food prices are rising. Demand for corn both domestically and in countries like China has increased. In the face of this increased demand, we’ve seen decreased corn yields for some major producers in Brazil and Argentina due to poor weather and labor shortages due to COVID-19. U.S. farmers could see significant profit from the shortage, but unseasonably cold weather and droughts in the Midwest threatens to further diminish corn production, according to Axios. This all adds up to the prospect of shortages in corn related products like corn tortillas which are likely to be in short supply on store shelves this summer. Al Kluis, Managing Director of Kluis Commodity Advisors says, “Food costs are going up because of higher grain prices and labor costs. Also, transportation costs have increased. Most of the increase is behind us and odds are good prices will moderate or move lower by the first quarter of 2022.” What does this mean for investors? The rise in food prices has helped to create a favorable environment for a number of companies in the food space. According to Kluis, “Agriculture related stocks like John Deere and Corveta have moved higher, but still look attractive over the long term.” The Kroger Company, with 2,800 stores in 25 states, is the largest supermarket company in the United States, has seen its stock move higher as the markets have built in the prospect of food price inflation leading to higher margins and profits for the company. In their guidance following the company’s Q1 earnings release for 2021, they provided upward EPS guidance in a range that was higher than analyst estimates for the company. Tyson Foods is another food related stock that has benefited from the rise in food prices. The stock gained 12% in a single week recently and has gained 26% over the past year. Increasing prices for beef, chicken and pork have helped fuel these gains, but the company’s CFO cautions that inflation in the company’s cost may outstrip their ability to raise prices. Kluis says, “Farm prices and profits have improved dramatically since their COVID lows in April of 2020. We have had good profit opportunities for the 2021 crops and have locked in some 2022 prices at some high historical values. The one downside to the rally has been a large increase in input costs, but the bottom line is that farmers are likely to record or near record income for 2021 and possibly 2022.” Food price inflation is likely to continue for the remainder of 2021 and perhaps into 2022. For guidance on how to play this situation as an investor, give your Wedbush advisor a call. Looking to build a financial plan based on your goals while considering market trends and risk factors? Click here to check out our approach to Wealth Management. Disclosure These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.