“I’m always amazed how many people forget that ordinary stocks are an inflation hedge over the long-term. Spikes in inflation and interest rates can certainly harm stock returns in the short run, and many investors in the 70s remember this well. But stock shares represent a real and productive asset. If prices rise, so too should revenue.”
Telehealth stocks are companies that help patients access healthcare remotely. And this category has emerged as an exciting new frontier when it comes to healthcare stocks, says Asher Rogovy, chief investment officer at Magnifina.
Beware of double fees. “Because ETFs and mutual funds charge their own management fees, these clients are essentially paying two different advisors,” said Rogovy. “Funds charge fees on the backend, so investors might not realize they’re paying these fees.”
“Ideally, an investment portfolio generates predictable income for retirement, but it’s not strictly necessary. Instead, active investors could sell profitable assets to fund retirement expenses. But this requires discipline and most retirees would rather just relax.”
Large-cap stocks are typically from companies worth more than $10 billion. “Large-cap stocks are generally safer but slower growing than other classes,” says Asher Rogovy, chief investment officer at investment advisory firm Magnifina in New York City.
Asher Rogovy is the Chief Investment Officer at Magnifina, LLC, a New York-based investment advisor that takes a long-term view with their client’s portfolios. He explains rising inflation and equity price risk this way, “Inflation is when prices rise, and this includes asset prices. Over the long-term stock prices rise along with inflation, as do other investment assets. The key here is long-term, because inflation may cause short-term volatility in stock prices. Stock prices are sensitive to interest rates, which are affected by inflation expectations.” Rogovy further explains that this isn’t the 1970s economy, ”Anyone investing during the 1970s remembers the damage caused by the oil crisis. In this case, persistent inflation held stock prices down for a long time. However, today’s economy is structurally different. In the 1970s, many manufacturing stocks were hurt as the cost of energy rose which cut profit margins. Today’s service-based stocks are less sensitive to input prices.”
Says Rogovy, “In the US, the central bank does not pay debt with the money it creates. Rather, it lends money at its targeted interest rate and the private sector employs that capital more productively. The money created is paid back, which is a crucial reason this monetary policy doesn’t produce hyperinflation.”
“CDs are a single step up from savings accounts in terms of both risk and reward,” he says. “The increased risk is because a CD must be held to its maturity, whereas savings accounts allow withdrawals at any time.”
Determining the tax rates that apply to those investments is a function of how long you have owned them. “For federal tax, the difference between short-term and long-term gains is whether the asset has been held for over one year continuously. The federal long-term capital gains tax is significantly lower than the short-term rate for most investors,” says Asher Rogovy, chief investment officer at Magnifina LLC, a New York-based investment advisory.
For example, long-term capital gains are taxed at no more than 15%, while short-term capital gains are taxed at the rate you pay on your tax return—which can be significantly higher than 15%, depending on how much you earn. “Because the long-term rate is lower, investors who have held a profit for 11 months may consider waiting another month before realizing the profit,” Rogovy says.
More generally, Asher Rogovy, chief investment officer at Magnifina, suggests that it’s best to avoid nominal assets in favor of real assets when inflation’s on the upswing. Real assets, like stocks and real estate, have prices that fluctuate or vary freely. Nominal assets, like CDs and traditional bonds, are priced based on the fixed interest they pay and will lose value in inflationary times.
“Moderna’s role in fighting the pandemic provided some significant benefits,” said Asher Rogovy, who is the Chief Investment Officer at Magnifina, LLC. “Operation Warp Speed provided Moderna with $1.53 billion to help its R&D and production capacity. The new supply chain will be reusable after the pandemic and Moderna should be able to produce new therapies at scale much quicker.”
A list of the best bond index funds would be incomplete without a nod to the tax-exempt offerings. Recommended by Asher Rogovy, chief investment officer at Magnifina, VTEAX is a stalwart in this sector. (N.B. this suggestion does not constitute investment advice)
“Everyone is working to measure a company’s true market value,” Asher Rogovy, Chief Investment Officer at Magnifina, says. “Whoever understands the true value can profit by trading mispriced stocks. Market capitalization represents how investors, on average, estimate true market value. It’s one indicator of market value and a great starting point for analysis.”
If you’re still not investing your money, Asher Rogovy of Magnifina says that it’s never too soon or too late to get your start. “Young investors may feel apprehensive because they are waiting for a good deal when markets fall,” says Rogovy. “The truth is, it’s impossible to time the market perfectly.” Instead, an excellent strategy to avoid missing out is to invest a set amount every month whether markets are up or down. He also suggests you stay disciplined. “Young investors have the benefit of time, and the stock market usually makes new highs within years of a previous top.”
To avoid scams, Asher Rogovy, chief investment officer at Magnifina LLC, emphasizes the importance of thoroughly researching the companies you’re interested in.
Rogovy, too, stresses caution. “It’s certainly appealing to think your stock may increase to 10 times its value, but this is exceedingly rare. If an investment seems too good to be true, it probably is.”