Market talk with Richard Excell

Richard Excell, clinical professor of finance at the University of Illinois Gies College of Business returns to The Yield returns to the podcast for a follow-up conversation about all that has, and hasn’t changed in recent months, as well as drivers that have the potential to move the market back in the right direction. 

Key Takeaways:

[11:53] The correlation between a variety of market drivers. 

[14:03] The impact of midterm elections on the market. 

[20:55] Understanding the meme stock craze and recent corporate actions.

Watch Here:

Listen Here:

Simply put, there hasn’t been much good news on the global economy lately.  Richard calls it a technical market in which we still have to maintain a very bearish position. In such markets, catalysts for positive momentum are key. The most dangerous words in the market are ‘this time it’s different’, because this time we might be at the point where there’s an inflection, and there might not be as much consistency across central bankers in terms of supporting their riskier markets. Not unlike a parent who threatens a child on a roadtrip to improve their behavior or there will be a consequence, the Fed seems to be insistent that the market is hawkish. And if they double down on that hawkishness, that is something that the market is going to have to pay attention to. 

But what’s priced in and what’s not? And what does any of that mean? Richard explains the current market situation, where it could be headed next and what that means for investors. What if instead of a bear market rally this is the genesis of a bull market rally?  The first six months of the year was driven by multiple contractions while the last six weeks have been driven by multiple expansion, and if we start to price out more hike rates, the multiples have room to expand even further.  

Additionally, we can’t forget that implied volatility is a huge component to the asset allocation decisions for a lot of different people.  Risk parity is a significant risk of the market, as well as implied volatility.  It’s possible each of these factors is corollary, and the time of year and global market concerns could both play a factor as well.  As Richard puts it, when everyone’s leaning one way it doesn’t take a lot of big news to move things hard and the other way.

Sign Up On Yieldstreet

Above all, inflation certainly seems to be the biggest driver of current expectations. But have we seen any real material change in inflation? Has the Fed been burned by a model they trusted that didn’t work the way they thought it would? Even with a handful of anomalies in the mortgage and equity markets, Richard’s advice is to be pragmatic rather than dogmatic, and to add complexity to your portfolio so that you’re not being forced into positions at the same time as everyone else. 

With insights into the recent meme stock craze and the associated corporate governance actions, Richard shares his wisdom about when to bet and when to fold.  As he warns, if you don’t know who the sucker at the card table is, it’s probably you.  And because the market is somewhat broken from a structural standpoint, it doesn’t take a lot for people to drive prices higher.  Don’t miss the three key catalysts that he recommends looking out for as we enter the final months of 2022, and don’t miss out on your opportunity to expand your portfolio with alternative investments.  To learn more about your options, visit today. 

Take all of our content on the go with you and listen on demand no matter where you are.  Subscribe on Apple PodcastsSpotifyYouTube, or wherever podcasts are available so you don’t miss an episode.

How helpful is this content?

Share this article:

Join a community of 400,000+ members

  • Gain access to unique offerings previously reserved for the ultra-wealthy

  • Customize your portfolio for income, growth, or a balance of both

What investors are saying about Yieldstreet

Apr 2022

The due diligence, risk management, and product education materials are thorough, excellent, and easy to use and understand.

Manoj J
Member since 2019
Apr 2022

Excellent and unique selections that I can't find elsewhere.

Jonathan S
Member since 2019
Apr 2022

The platform delivers in a very concise manner. Easy to get a clear understanding at a glance from the web or mobile app.

Tim S
Member since 2021
The testimonials presented on this page have been provided by actual investors in Yieldstreet funds without compensation. Yieldstreet has selected the testimonials, and certain testimonials have been edited to remove personally identifiable information and for brevity. Testimonials were not selected based on objective or random criteria, but rather were selected based on Yieldstreet's understanding of its relationship with the providers of the testimonials. The uncompensated testimonials presented here may not be representative of other investors' experiences, and there can be no guarantee that investors will experience future performance or success consistent with the testimonials presented.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.8B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.