Dick Pfister in Family Wealth Report: How to Invest Amid Stagflation

Recent data from the first quarter of 2022 has demonstrated that our economy is shrinking while inflation continues to drastically rise. Commonly known as stagflation, this phenomenon has not been seen in the US since the 1970s and creates yet another challenge for portfolios. To help investors allocate effectively against stagflation, Family Wealth Report recently turned to AlphaCore Wealth Advisory CEO and Founder Dick Pfister, CAIA, for insight.

“We are constantly peer-reviewing prospect portfolios – and simply stated, we do not believe the average high net worth portfolio is appropriately allocated for today’s changing macro environment,” Pfister tells the publication.

“Consider where most of the returns were generated for the average high net worth client over the last decade plus – this was largely sourced from long-only equities, and in particular, growth and tech-focused exposures,” Pfister further explains. “Laying on tax considerations (reluctance to realize gains), and what we often observe is a heavy overweight to US large and mega cap growth allocations.”

Pfister went on to share an example of how Big Tech can quickly turn with so much positive news having been discounted months ago.

“Netflix is an example of a market darling that was priced for perfection – it only took the smallest of subscriber growth declines to impact the stock price negatively in a meaningful way,” Pfister said. “This isn’t to say that we are outright bearish on equities – we look at the universe of global stocks as objectively as we can and do see opportunities. Today, the data shows that the equity risk premium currently stands at one of the lowest levels of the last decade given the strong upward move in 10-year Treasury yields over the past few months,” he said.

Click here to read the entire Family Wealth Report article.