Jason Maas is a Managing Director at The Burish Group, a wealth management team at UBS with six offices across southern Wisconsin and northern Illinois. We spoke with Maas about the state of the market, his tips for investors and more.
Are you anticipating any economic trends for the rest of 2023?
There’s a ton of uncertainty right now. It took 11 years to get out of the economic pothole of the 2008 financial crisis, and then lo and behold, the pandemic occurred. Locking down the economy has created this enormous pothole again. Because of the pandemic, governments and central banks across the world fed the economy financial Red Bull, just massive stimulus, to shock the economy back, and we’re in the aftermath of that right now. Things are overheating, and the Fed is jamming on the brakes, raising interest rates the fastest they’ve been raised since 1980. That’s causing all sorts of disruptions. I would expect that uncertainty to continue for the rest of this year, with the Fed trying to slow the economy down. But I’m not pessimistic about our ability to get through this. Hopefully we’re nearing an end, and I think most of the heavy braking by the Fed on the economy has been accomplished. We’re seeing evidence that inflation is calming down, and we’re encouraged that it appears to be decelerating from last summer. This too shall pass.
What advice do you have for investors in this uncertain market?
Patience and discipline are key. It’s so important to align your investment strategy with your needs and your time frame. It can be tempting to stray from your plan and get distracted by the news of the hour, but our best results come from a disciplined plan – no shortcuts. We think of investment in terms of time frames: so your one-to-three-year needs, your lifetime needs, and then money for after your lifetime, to give to the next generation. At The Burish Group, we call that liquidity, longevity and legacy. We develop strategies to meet those needs.
I also recommend alternative investments where appropriate, for greater diversification. Broadly speaking, that could be investing in hedge funds, private equity, real estate or private credit. So for example, last year stocks and bonds both registered negative returns in the broad averages. Alternative investments would give an investor a third dimension besides stocks and bonds that could help offset that dip.
Do you see greater opportunity in any sectors right now?
Boring old bonds are looking much more attractive now. Bonds started 2022 at very low yields – they were paying very little as investments – but now we have this huge set of rate hikes on bonds. We were seeing near zero last year, and we’re now in the neighborhood of four or higher percentages for bonds today. That might not sound exciting, but it’s important for a diversified portfolio. It’s a significant driver for returns.
In the stock area, there are a number of opportunities. I would say our preferences are for defensive sectors like consumer staples, given the slowing economy. But we also like energy stocks. The energy sector did very well last year, but still remains reasonably priced for the fundamentals.
What are some of the biggest mistakes you’ve seen investors make? And how can they be avoided?
I think investors make mistakes when they haven’t thought through their plan very carefully or with the help of a professional. That can lead to mismatches between your investment strategy and your money. So maybe someone has a real aggressive long-term strategy after a good market lures them in – then when the market inevitably goes down they’re forced to sell at a low point because they need the money. Another common mistake is the more emotional aspect. When there’s a down market, people might believe it’ll stay that way and they get nervous, so they sell instead of waiting for it to go back up. Planning and preparing with a professional helps to create discipline around that. Instead of becoming the victim to market ebbs and flows, you can actually take advantage of those ebbs and flows.
What is a topic in the finance and investing world that you think isn’t getting enough attention right now?
I think there’s an obsession on the short term. If you look at CNBC or some other media, pessimism and fear get broadcast the most. I’m confident that the economy in the long run will settle out just fine, as the pandemic moves further into the rearview mirror. The old rules, the time-tested rules of free markets and competition, are still there and still driving our economy and the markets.
What is one takeaway you’d like to leave readers with?
I hope they pursue a personal financial plan, whether that means creating one for the first time or refreshing one that they haven’t thought about for a while. It’s a bit of a chore, but once you spend some time with a qualified professional, you’ll see that there are a lot of great choices and exiting things to invest in. It’s all about connecting the dots from your own personal situation out to investments through a solid plan. Once you have that in place, all your other decisions become a lot easier.
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