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LATEST - 11/21/2019


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Helping clients understand why they aren't beating the S&P 500
Author: Jeff Benjamin
Date: Nov 16, 2020
Publication: Investment News
Link to Article

In the best of times, advisers have to remind clients about the worst of times

Big stock market gains can often mean big headaches for financial advisers when it comes to explaining to clients why their portfolio didn't keep pace with the S&P 500 Index, which gained 30% last year.

Aside from the obvious answer that most clients are not 100% allocated to a single broad market equity index, savvy financial advisers are using this time of year to reintroduce clients to the benefits and realities of diversification and individual risk-tolerance levels.

"When markets have big years people always want to know why they're not 100% in the S&P, and the answer is if your risk tolerance doesn't correlate to the S&P using that as a benchmark is a fool's errand," said Paul Schatz, president of Heritage Capital.

Mr. Schatz said no matter how well you try and educate and prepare clients, big market gains will usually draw questions and comparisons.

In most instances, his standard response is to compare the S&P's 38.5% drop in 2008 to the 16% drop of his main portfolio strategy.

"If you want to assume the risk and reward of the S&P, let's not forget that twice in the past nine years it experienced peak-to-trough declines of more than 50%," he said, citing the 50% drop between 2000 and 2002, and the 58% drop between 2007 and 2009.

"Most of the time we don't meet or beat the S&P 500 Index simply because we don't take on the volatility risk to make that happen," said Tim Holsworth, president of AHP Financial Services.

"It's almost always about the level of volatility the client said they could handle," he added. "it's all about clearly defining volatility limits and setting realistic expectations."

The risk-reward conversation is not a new one for most financial advisers, but that doesn't mean they aren't regularly revisiting it with clients, particularly after a year like 2019 when diversification beyond anything but U.S. stocks dragged down portfolio performance.

In the most basic example of a portfolio including 60% in iShares Core S&P 500 ETF (IVV) and 40% in iShares Core US Aggregate Bond ETF (AGG), the return would have been 22% last year.

If you go beyond the plain vanilla to include areas like international equities the trailing performance gets even worse.

"Investors would have been better off focusing solely on U.S stocks last year, but historically that's not the case," said Todd Rosenbluth, director of mutual fund and ETF research at CFRA.

"It's easy in hindsight to wish you had only been in equities, but the bull market will come to an end at some point and investors will be pleased they are more diversified when that time comes," he added.

Factor-based strategies

Of course, if you really want to feel bad about the way a diversified portfolio performed last year take a gander at some of the factor-based strategies that concentrate on specific slices on the high-performing S&P 500.

Indexed factor strategies focused on minimum volatility, share buybacks, quality, and high beta all returned between 32.4% and 34.4% last year.

But looking in the rearview mirror is virtually useless when it comes to investing, according to Aye Soe, global head of product management at S&P Dow Jones Indices.

"I'm not a believer in factor timing because we never know what factor is going to outperform," she said. "My message is, even though you think you know what you will get, be diversified and have exposure to all these factors because you don't know which will do better."

Dennis Nolte, vice president at Seacoast Investment Services, is a firm believer that most investors think their individual tolerance for market volatility is higher than it is, which is why he embraces a simple adage.

"If your clients are properly diversified, you're always going to be apologizing for something," he said. "But at this point, no one seems to be concerned they didn't make 30% last year. They're glad to have taken less risk and received less of a return, since most folks still seem to believe something bad is going to happen."


Paul Schatz Money Tips for 2020
Author/Anchor: Matt Scott
Date: Jan 10, 2019
Publication: FOX 61
Link to Article





Financial Forecast for 2020
With: Samantha Miller
Date: Jan 09, 2020
Publication: WTNH - NEWS 8
Link to Article



(WTNH) - From the economy to your investments, financial expert Paul Schatz, president of Heritage Capital, breaks down the financial outlook for 2020.


Gold could hit $3,000 by 2025: expert
With: Adam Shapiro & Julie Hyman
Date: Jan 08, 2020
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Gold prices pulled back on Wednesday after climbing above $1,600 for the first time in seven years as tensions between Iran and the United States simmered. Still, the commodity has been one of the best performing assets in the world and one strategist says it's only getting started.

"I think by 2025 gold will be at least $2,500 to $3,000 an ounce," Heritage Capital's Paul Schatz told Yahoo Finance's On the Move. "I don't think the rally is over in gold by any means."

Gold prices are up nearly 4% in just the first few weeks of 2020. Earlier this week, the commodity jumped as much as 2.4% after Iran attacked U.S.-led forces in Iraq in retaliation for a U.S. drone strike that killed an Iranian military commander last week.

"Gold sentiment's really hot right now—everybody loves gold," Schatz said. "I think gold's a trading vehicle. If you like gold, what do you do? You find a leverage way to play it."

Schatz has one particular pick that he calls "the big granddaddy of the industry."

"I chose Newmont (NEM)," he said. "It typically has a leverage effect, so gold goes up $2, that stock goes up 2%. That stock may go up 3%."

Newmont is a leading gold mining company with jurisdictions in North and South America, Australia and Africa. Newmont shares have gained over 24% in the past year alone.

Gold is often looked at as a flight to safety, but investors have been putting their money into the commodity despite stocks doing well.

"Be very careful with the whole flight to safety thing," Schatz said. "I always remind people, in 2008 gold initially went from $1,000 to $680 before reflating. Gold is not this great hedge against inflation that people think it is."


The reasons why the 2010's bull market may be drawing to a close
With: Adam Shapiro & Julie Hyman
Date: Jan 7, 2020
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Heritage Capital President Paul Schatz joins On the Move to explain why he thinks a market fall is on the horizon.


Hyundai and Uber are partnering to build air taxis
With: Adam Shapiro & Julie Hyman
Date: Jan 7, 2020
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

At the Consumer Electronics Show Hyundai and Uber announced their partnership to create new flying taxis. Heritage Capital President Paul Schatz joins Yahoo Finance's On The Move panel to discuss.


The IRS adds a question about crypto usage on the new tax form
With: Adam Shapiro & Julie Hyman
Date:\ Jan 7, 2020
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Heritage Capital President Paul Schatz joins Yahoo Finance's On The Move panel to break down various financial changes going into 2020.


Paul Schatz On Assessing Investment Sentiment
With: Nicole Petallides
Date: Jan 6, 2020
Publication: TD Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Paul Schatz On Assessing Investment Sentiment

The Watch List with Nicole Petallides offers investors a midday look at the most relevant stocks, sectors and commodities.


END OF THE YEAR TAX AND INVESTMENT ADVICE WITH PAUL SCHATZ
Author/Anchor: Matt Scott
Date: Dec 19, 2019
Publication: FOX 61
Link to Article





Boeing suppliers under pressure amid Max suspension
With: Brian Sozzi, Alexis Christoforous and Jared Blikre
Date: Dec 17, 2019
Publication: Yahoo! Finance
Link to Article



Yahoo Finance's Brian Sozzi, Alexis Christoforous and Jared Blikre discuss the latest market action with Heritage Capital President & CIO Paul Schatz and BNY Mellon Chief Strategist Alicia Levine on "The First Trade."


Gold is going to $2,500, $3,000 an ounce: investment expert
With: Yvette Killian - Producer
Date: Dec 11, 2019
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Wealthy people are stocking up on physical gold, as in bullion, coins and bars, according to a recent note from Goldman Sachs. As a result investors who are bullish on gold say it's the precious metal's moment to shine.

"I think gold's going to $2,500, $3,000 an ounce in the 2020s because the climate=the landscape for gold is so hugely supportive." Paul Schatz, Heritage Capital president, told Yahoo Finance's On The Move.

In a recent note Goldman Sachs presented reasons for owning gold citing recession concerns and political uncertainty as catalysts for an investor shift to gold. Over the past year, gold prices have risen nearly 20% and gold is on pace for its best year in a decade. By 2020, Goldman thinks the price of gold will reach $1,600 an ounce.

Schatz thinks Goldman's forecast is too low. "I think Goldman is way off here," he said. "$1,600 is going to be a footnote."

What's interesting this cycle is that it's not just gold ETFs and other abstract investments driving demand for gold but rather people buying actual gold bullion. "Physical gold seems to really be in... and basically it sounds like rich people are hoarding physical gold, the bullion itself," said Yahoo Finance's Myles Udland, co-anchor of The Final Round and co-author of Morning Brief. In Goldman's "view that squares with demand for vaults and everything. But I just think end of the world trades are fun, and it seems like the global rich want the actual thing," he added.

According to Schatz, "an individual investor should have 5% to 10% in some capacity in precious metals. People who don't trust the markets, don't trust paper will want to buy gold coins. Anything that they're comfortable," he said. "You want to buy gold stocks? Fine. You want to buy GLD? Fine. You want to buy gold coins? Fine."

For people who don't want to store physical gold, in the manner of bars and coins, in their basement, gold ETFs are an alternative, said Schatz. "If you want to leverage play, you play the stock ETF, " he added, highlighting it as a practical way to own gold.


AOC says 'I told you so' after Amazon moves to NYC
With: Julie Hyman and Adam Shapiro
Date: Dec 10, 2019
Publication: Yahoo! Finance
Link to Article



Amazon is opening a new office in New York, less than a year after dropping its plans for HQ2. Yahoo Finance's Adam Shapiro, Julie Hyman, Rick Newman and Heritage Capital's President Paul Schatz discuss the impact of the move.


U.S., China trade negotiators plan to delay December tariffs: RPT
With: Julie Hyman and Adam Shapiro
Date: Dec 10, 2019
Publication: Yahoo! Finance
Link to Article



U.S. and China trade negotiators are reportedly planning to delay tariffs that are set to go into effect on December 15th, but it turns out the market may have already priced it in. Paul Schatz, Heritage Capital President, joins Yahoo Finance's Adam Shapiro, Julie Hyman and Rick Newman to discuss.


Social Media's 2020 Outlook
With: Nicole Petallides
Date: Dec 9, 2019
Publication: TD Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Paul Schatz And Michael Nunez On Social Media's 2020 Outlook

The Watch List with Nicole Petallides offers investors a midday look at the most relevant stocks, sectors and commodities.


Charles Schwab to buy TD Ameritrade for $26B: RPT
With: Julie Hyman and Adam Shapiro
Date: Nov 21, 2019
Publication: Yahoo! Finance
Link to Article



Charles Schwab is reportedly looking to buy TD Ameritrade for $26 billion dollars. Yahoo Finance's Adam Shapiro, Julie Hyman and Dan Roberts discuss with Caleb Silver, Investopedia Editor-in-Chief and Paul Schatz, Heritage Capital President on On The Move.


Charles Schwab, TD Ameritrade merger could be worth $5 trillion
With: Charles Payne
Date: Nov 21, 2019
Publication: FOX Business
Link to Article



Sources tell FOX Business Charles Schwab is trying to buy TD Ameritrade for $26 billion. FOX Business' Jackie DeAngelis, Point View Wealth Management David Dietze and Heritage Capital president Paul Schatz discuss the trend of 'merger mania.'


Waiting For Starbucks To Go Below 80
With: Nicole Petallides
Date: Nov 18, 2019
Publication: TG Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Paul Schatz: Waiting For Starbucks To Go Below 80

The Watch List with Nicole Petallides offers investors a midday look at the most relevant stocks, sectors and commodities.


Major indexes in the red despite strong earnings reports
With: Alexis Christoforous and Brian Sozzi
Date: Nov 14, 2019
Publication: Yahoo! Finance
Link to Article



Yahoo Finance's Brian Sozzi, Alexis Christoforous and Jared Blikre discuss the latest market action with Heritage Capital's President & CIO Paul Schatz and Fross and Fross Wealth Management's Thomas Fross on The First Trade.


Shifting to value stocks just in the nick of time
Author: Jeff Benjamin
Date: Nov 11, 2019
Publication: Investment News
Link to Article

Signals are flashing that growth stocks are giving way to value strategies

Without officially admitting or denying that growth stocks' decade-long run has come to a close, some financial advisers and market watchers are giving a committed nod toward value stocks as the next train to ride.

Last week at Charles Schwab Corp.'s annual conference in San Diego, Jeffrey Kleintop, Schwab's chief global investment strategist, pegged the shift in momentum from growth to value to the inverted yield curve, which he said has historically triggered such transitions.

Mr. Kleintop, who was making the point that an inverted yield curve can signal more than just a looming recession, showed that growth and value swapped leads following each of the past three periods when the yields on longer-term bonds fell below those on shorter-term bonds.

"This is part of a longer-term trend that most investors are going to miss," he said.

Mr. Kleintop's is not the only data showing that the shift toward value is underway.

Research from CFRA chief investment strategist Sam Stovall shows that from Aug. 23 through last Friday, the S&P 500 Value Index gained 12.3%, beating its growth-stock counterpart by a margin of two-to-one.

Investors and financial advisers can be forgiven if they aren't yet fully on board because growth stocks have been overshadowing value for more than a decade.

Since the start of the year, large-cap growth mutual funds, as tracked by Morningstar, averaged a 25% gain, which compares to 21% for large-cap value funds.

Over the trailing 10 years, the growth fund category had an annualized gain of 13.3%, which compares to 10.8% for the value fund category.

"It makes perfect sense that the market will start changing toward the value side, but we've seen a growth bias for a while and so far, we haven't seen enough to change that," argued Tim Holsworth, president of AHP Financial Services.

Mr. Holsworth added that his rationale for sticking with his growth-stock overweight in part reflects "our deep love for tech and health care, which are sectors that automatically put us in the growth camp."

While advisers like Mr. Holsworth might have momentum on their side, much of the data favors value.

According to CFRA, the S&P value index is trading at a 4% discount to its average price-to-earnings ratio since 2003, while its growth index counterpart is trading at a head-turning 24% premium.

In comparing the valuations with the broader market, Mr. Stovall finds that the value index's relative price-earnings ratio is 10% below its 15-year average, while the growth index's P/E ratio is 13% above normal.

"I'm seeing it and I have already allocated into it," Vance Barse, wealth strategist and founder of Your Dedicated Fiduciary, said regarding the recent shift in momentum toward value.

Mr. Barse believes the shift is a combination of "smart money" strategies and macroeconomic factors, including three interest-rate cuts this year that make dividend-paying stocks more attractive relative to bonds.

"Historically, value has outperformed growth during recessions and bear markets," he said. "The smart money may be aiming to capture the higher dividends offered by value equities while positioning portfolios a little more defensively."

Paul Schatz, president of Heritage Capital, said there is a strong case for allocating to value in the later stages of a bull market, but he also noted that investors have been fooled in the past by similar-looking data.

"The growth-value relationship recently was as rich as at any time since the dot-com bubble peaked" in early 2000, Mr. Schatz said. "Since bottoming in 2007, growth has steadily marched higher versus value. In 2009, 2011 and 2015, pundits called the end of the growth rally, only to be proven wrong, and here we are again."

Mr. Stovall of CFRA said investors and advisers who might not appreciate the growth-value momentum shift should take some solace in knowing that the market is transitioning, "rather than cashing out altogether."


Federal Reserve cuts rates 1/4 point
With: Charles Payne
Date: Oct 30, 2019
Publication: FOX Business
Link to Article



FOX Business' Edward Lawrence reports on the Fed also signaling a pause for future rate cuts. Former Dallas Fed adviser Danielle DiMartino Booth, Bulltick Capital Markets' Kathryn Rooney Vera, former JPMorgan Chase chief economist Anthony Chan, Heritage Capital founder Paul Schatz and FOX Business' Charles Payne discuss the American economy as a whole.


Paul Shatz's Stock Picks
With: Nicole Petallides
Date: Oct 30, 2019
Publication: TD Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Paul Schatz's Stock Picks: ALEX, AMD, RTN, PFE

The Watch List with Nicole Petallides offers investors a midday look at the most relevant stocks, sectors and commodities.


Lower bond yields leave advisers pursuing controversial income strategy
Author: Jeff Benjamin
Date: Oct 30, 2019
Publication: Investment News
Link to Article

Dividend-paying stocks are becoming the go-to replacement for fixed-income allocations

As the Federal Reserve announces its third interest-rate cut of the year, after more than a decade spent trying to push rates higher, financial advisers are being forced to get creative when searching for income-producing investments for their clients.

In many cases, that means shifting out of traditional fixed-income allocations and into dividend-paying stocks, a practice that has become increasingly popular and somewhat controversial.

"There are dozens, if not hundreds, of quality, blue-chip stocks with dividend yields of at least 3%, with many above 4%," said Paul Schatz, president of Heritage Capital.

Even though Mr. Schatz recognizes the risks of supplanting bonds with stocks, he is doing exactly that for some of his clients who want more income than they're able to get from bonds.

"Those stocks will decline significantly during the next bear market," he said. "Investors need to buy with their eyes wide open. And, as we learned with GE and many others, when the company struggles, the dividend may get cut or eliminated."

The trend toward loading up on dividend-paying stocks has been unfolding all year, said Todd Rosenbluth, director of mutual fund and ETF research at CFRA.

"Bond yields have fallen, and investors have been searching for income alternatives," he said, citing the popularity of ETFs such as iShares Core High Dividend (HDV) and Vanguard High Dividend Yield (VYM), two equity funds with dividend yields above 3%.

According to Mr. Rosenbluth, this year through Oct. 29, dividend-focused ETFs have experienced $12 billion worth of net inflows.

That compares to $5 billion for all of last year, when the market was worried about the Fed raising rates.

Even though dividend-focused funds are typically more heavily allocated to defensive sectors like consumer staples, health care and utilities, the funds still hold stocks, which introduces some risks that bond investors don't have to worry about.

"I think it's not a great idea" to substitute dividend-paying stocks for bonds, said Christine Benz, director of personal finance at Morningstar.

"Even though there's a lot to like about dividend-paying stocks, bonds and dividend-paying stocks aren't fungible," she said. "High-quality bonds have a much lower volatility profile than stocks, and most investors own bonds for their shock-absorbing characteristics and their ability to diversify equities, not just for income."

To put the volatility differential into perspective, Ms. Benz cited the 10-year standard deviation of the average intermediate-term core bond fund tracked by Morningstar of about 3, versus the standard deviation of 10 for a basic dividend growth fund and 11 for a basic equity-income fund.

The appeal of dividend-paying stocks in a low-rate environment is understandable and even multifaceted.

For example, while bonds can be held to maturity and produce a predictable income stream, stocks present the potential for capital appreciation, and dividends are taxed at a lower rate than is bond income.

Tim Holsworth, president of AHP Financial Services, has watched the trend toward dividend-paying stocks versus bonds, and warns that it's not just about seeking out a source of income.

"Dividends are great, but stocks don't provide the stability of bonds," he said. "Now we're back to matching risk tolerance to investment choices."


Caleb Silver And Paul Shatz Discuss How McDonald's Record Run Cools Off
With: Nicole Petallides
Date: Oct 3, 2019
Publication: TD Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Petallides hosts a panel of experts, including Heritage Capital founder Paul Schatz to discuss McDonalds stock run.

The Watch List with Nicole Petallides offers investors a midday look at the most relevant stocks, sectors and commodities.


Major indexes lower with U.S. imposing tariffs on Europe
With: Alexis Christoforous and Brian Sozzi
Date: Oct 3, 2019
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Major indexes are lower today with the United States imposing tariffs on Europe, and September job reports are due out tomorrow, with 148,000 expected. Heritage Capital founder and President Paul Schatz and AllianceBernstein Portfolio Manager-High Yield Will Smith join Yahoo Finance's Brian Sozzi and Alexis Christoforous to discuss.


The case against gold
Author: Jeff Benjamin
Date: Sept 23, 2019
Publication: Investment News
Link to Article

Some advisers shun the precious metal, arguing that it's simply a trading vehicle

With the price of gold up nearly 18% since the start of the year, some market watchers are calling it a "crowded trade." That's just one of the reasons some financial advisers give for steering clear of the precious metal at this point in the market cycle.

"Gold is a little overbought and everybody is asking about it, and if there's a consensus out there, it's best to bet the other way," said Dennis Nolte, vice president of Seacoast Investment Services.

"You just don't want to buy something when everybody's eyes are on it," he said.

In juxtaposition to the so-called gold bugs, who tend to be persistently enthusiastic about the prospects for gold, some financial advisers view gold as at best a trading vehicle.

"We use bonds to temper down volatility, not gold," said Tim Holsworth, president of AHP Financial Services.

"I don't speculate, so I don't buy gold," Mr. Holsworth said. "I would only be interested in gold if I thought the markets were going to crash, and that's not the case."

For Tim Doehrmann, founder of Eagle Ridge Wealth Advisors, the biggest problem with gold is in valuing it as an investment.

"There's really no good way to value gold," Mr. Doehrmann said.

"It doesn't produce anything, the way a company can produce cash flow, earnings, and dividends," he said. "It's been a store of value for thousands of years, but that value has just bounced around."

This year, the price of an ounce of gold has been as low as $1,270 and as high as $1,542, which is just above where it is currently trading.

Last year was a relatively mundane year for the price of gold, which ended 2018 down 1.2%.

There have been some big swings in recent years, and each one typically triggers a debate about the value of investing in gold.

Gold gained 12.6% in 2017, lost 27.8% in 2013, gained nearly 28% in both 2009 and 2010, and spiked 31.6% in the run-up to the recession in 2007.

"Some people think gold is a secure thing, and they usually want to turn to it in inflationary and recessionary periods," Mr. Doehrmann said. "But people have been calling for a recession since that last recession. And if you have no idea what the market is going to do and you can't value commodities like gold, how will you know when to invest in them?"

While gold has a reputation as a hedge against inflation, so do Treasury Inflation-Protected Securities, which would be Mr. Doehrmann's preference for his clients.

As a commodity, gold is unique in that, unlike most commodities that are used up, gold is virtually perpetual. Once it's mined, whether it's stored as bullion or used to make jewelry, it doesn't ever go away or expire.

But while gold might last forever, the tailwind behind its price does not, said Paul Schatz, president of Heritage Capital.

"Gold typically has long super cycles and a terrible long-term track record to buy and hold, and it doesn't produce earnings or pay dividends," Mr. Schatz said. "Contrary to popular opinion, gold is not a great hedge against inflation because it typically rallies long before inflation appears and declines long before inflation ends."

Mr. Schatz said that while he isn't anti-gold, he doesn't believe in leaving a gold allocation in a portfolio as a long-term position.

"Gold is best used as a trading vehicle or strategic or tactical holding," he said. "I would never permanently allocate to just owning a gold fund or the physical metal."


Stock markets are reacting less to US 'trade-tariff tantrum': strategist
With: Joanna Campione - Producer
Date: Sep 12, 2019
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

Investors are getting mixed signals on progress in the U.S-China trade war.

A day after President Donald Trump said he would delay additional tariffs on China to October 15 from October 1 as a "gesture of goodwill," White House officials denied a report that they are considering an interim trade deal with China.

But the U.S. stock market continued to climb throughout Thursday's trading session.

"As we go on in this trade tariff tantrum, the market's reaction is increasingly less and less," Paul Schatz, Heritage Capital president, tells Yahoo Finance's On the Move. "A couple months ago, news like this would've broken, and stocks would have gone down 1% to 2%."

Instead, stocks hovered closer to record highs as investors mulled on other news: a sweeping stimulus package from the European Central Bank and U.S. core consumer prices hitting its highest level in a year. The Dow, S&P 500 and Nasdaq all closed the day up.

Schatz says investors don't seem to be reacting to every twist and turn in the trade saga as they did a month to three months ago.

"Investors should worry less about the tweets and more about other things in the markets. You know, earnings and the economy, and certainly sentiment," he says. "But I don't think it's the clear-and-present danger it was several months ago."

A new round of talks is scheduled to take place in Washington in early October. Ahead of those talks comes reports that the Chinese may cut out some of the non-trade issues that have complicated progress, including U.S. involvement in the Hong Kong protests. That comes along with reports that China made its biggest purchase of U.S. soybeans since June, which could point to a willingness to come to a deal.

"I'm not sure the Chinese are actually in a position of strength, per se," says Schatz. "But they're not in the position of weakness that the administration is selling."

That's because, he says, there is no incentive for them to make a deal in the next 14 months leading up to the 2020 presidential election. "They know what they have in Trump. If they try to wait him out and he loses, perhaps they will get a better deal with somebody else," Schatz say. "But frankly, 14 months to the Chinese is nothing."


ECB cuts a key rate for first time since 2016
With: Julie Hyman and Adam Shapiro
Date: Sep 12, 2019
Publication: Yahoo! Finance
Link to Article

Paul Schatz on Yahoo Finance

The European Central Bank cut one of its key interest rates for the first time since 2016, pushing it into record negative territory. Yahoo Finance's Oscar Williams-Grut reports. He talks to Julie Hyman, Adam Shapiro, Andy Serwer and Heritage Capital's Paul Schatz


Paul Schatz On Why Tesla's His Short Pick
With: Nicole Petallides
Date: Sep 12, 2019
Publication: TD Ameritrade
Link to Article

Schatz on TD Ameritrade's The Watch List

Heritage Capital founder Paul Schatz is on The Watch List with Nicole Petallides to discuss the market moving forward.


Stocks near all-time highs
With: Charles Payne
Date: Sep 12, 2019
Publication: FOX Business
Link to Article



Heritage Capital founder Paul Schatz and Point View Wealth Management's David Dietze discuss a possible trade deal and how it's affecting the stock market.


When strong performance sends ETF investors to the exits
Author: Jeff Benjamin
Date: Sept 6, 2019
Publication: Investment News
Link to Article

Investors are bailing out of concentrated ETF strategies in favor of safety and diversification

In the latest sign of growing investor caution, strong performance is not enough to keep assets from moving out of some focused exchange-traded funds.

For example, the $105 million Amplify Traditional Data Sharing ETF (BLOK) is up 21.5% from the start of the year but has experienced $15 million in net outflows.

Similarly, the $66 million Reality Shares NexGen Economy ETF (BCLN) is up 18.5%, matching the S&P 500 Index, but has seen $20 million in net outflows.

Dennis Nolte, vice president of Seacoast Investment Services, said part of the problem with smaller ETFs is that investors could be concerned about liquidity, which is why they are taking profits while times are still good.

"A lot of times there might be enough interest in the sector to create a certain type of fund, but if they don't get enough sponsorship there will be lower trading volume and potential for liquidity issues," he said. "That's the caveat on any of these newer thematic funds."

That point makes sense to a certain degree but doesn't fully explain the $122 million in net outflows this year from the $1.5 billion Prime Cyber Security ETF (HACK), which is up 12.6% this year.

Paul Schatz, president of Heritage Capital, attributed the outflows to thematic funds being swept up in a general trend of equity-fund outflows.

"I think these kinds of thematic strategies are fine at the margin or on the fringe of a portfolio for a very distinct and concentrated view, but many of them are trendy or hot sectors, which often lead to fleeting returns and outsized volatility," he said, touching on a subject that investor and financial advisers have been increasing trying to avoid.

"Given how negative people are and have been for more than a year, I'm not surprised by the outflows," Mr. Schatz added.

Even Brian Giere, director at Amplify ETFs, which manages the blockchain fund BLOK, understands the growing appeal of "plain vanilla and low-volatility strategies."

"The blockchain theme is still viable, but the drop during the fourth quarter of last year scared a lot of people and diverted their attention from the asset class," he said.

Todd Rosenbluth, director of mutual fund and ETF research at CFRA, agrees that the themes are not going away, but said the timing might be a little off at this point in the cycle.

"If you look at the positive flows into some of the broader-category ETFs, it shows that investors have become more comfortable staying in the more diversified ETFs right now," he said. "However, we think, going forward advisers are going to increasingly find thematic ETFs as good replacements for single-stock bets."



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Heritage Capital, LLC (HC) is a state of Connecticut registered investment adviser located in Woodbridge CT. HC and its representatives are in compliance with the current filing requirements imposed upon state registered investment advisors by those states in which HC maintains clients.

HC may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. HC's web site is limited to the dissemination of general information pertaining to its investment advisory services. Accordingly, the publication of the HC's web site on the Internet should not be construed by any consumer and/or prospective client as HC's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.

Any subsequent, direct communication by HC with a prospective client, shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of HC, please contact the SEC and/or the state securities law administrators for those states in which HC maintains a notice filing.

A copy of HC's current written disclosure statement discussing HC's business operations, services, and fees is available from HC upon written request. HC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to HC's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.