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The Alternatives Mason: Building Alts Knowledge Brick by Brick | Episode 11 | Matters of Diversity Featuring Jeff Thomas
4 Plays8 months ago
Welcome to The Alternatives Mason: Building Alts Knowledge Brick by Brick. Banrion Capital Management uses technology to help independent advisors scale and educate themselves on alternative investments. Since education is such a big piece of the Banrion mission and business, we are excited to kick off this series to dive into the nits and grits of the alternatives space. Episode 11 "Matters of Diversity" features Jeff Thomas, National Director of Advisor Advocacy at Swan Global Investments.
Jeff transitioned from a fourth generation Lobster Fisherman to a Financial Advisor, drawing from his early entrepreneurial experiences and market insights. In addition to his leadership role at Swan Global Investments, he is the Creator & Host of the renowned Investment Masterminds Podcastinar Series, facilitating discussions on various financial topics, notably Alternative Investments.
Jeff is an active advocate for diversity and equality in the financial sector, contributing as a mentor to the FinServ Foundation and holding a leadership position in Females & Finance. He resides near Boston, Massachusetts, with his family.
Connect With Jeff- Investment Masterminds
- Jeff Thomas on LinkedIn
- Jeff Thomas on 𝕏
- Learn more about Swan Global
- Learn more Females and Finance
Learn More About Banrion: Banrion Capital Management
Follow Brittany on 𝕏: @Brittany_Mason
Follow Banrion on 𝕏: @Banrion_Capital
Subscribe to our YouTube Channel: @BanrionCapital
Important Disclosures:
The opinions expressed on the “The Alternative Mason Podcast” are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security.
It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results.
The guests featured on this program may be participants on Banrion Capital Management’s platform. As such Banrion may receive payment for their participation as a platform partner.
Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Statements attributed to an individual represent the opinions of that individual as of th
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Transcript
Introduction to Alternatives Mason Podcast
00:00:01
Speaker
Welcome to the Alternatives Mason Podcast with host Brittany Mason, Chief of Staff at Bonner & Capital Management. You'll learn how to build alternative knowledge brick by brick. Bonner & Capital Management uses technology to help independent advisors scale and educate themselves on alternative investments. And since education is such a big piece of what we do, we are excited to kick off the series to dive into the myths and grits of the alternative space.
00:00:33
Speaker
Hello, everyone. It is Brittany Mason, your host here at Alternative Mason, coming at you once again with another episode.
Meet Jeff Thomas: From Lobster Fisherman to Financial Advisor
00:00:41
Speaker
We are so excited to introduce you to Jeff Thomas, a very special guest of ours. He is the national director at Swann Global Investments, and he's transitioned from a fourth generation lobster fisherman to a financial advisor. Drawing from his early entrepreneurial
00:00:59
Speaker
experiences and market insights. In addition to his leadership role at Swan Global Investments, he is also the creator and host of the Renowned Investment Masterminds podcast series, facilitating discussions on various financial topics, notably alternative investments, of course. Jeff is an active advocate for diversity and equality in the financial sector, contributing as a mentor to the Finserv Foundation and holding a leadership position at Females in Finance.
00:01:29
Speaker
He also resides in Boston, Massachusetts with his family. Thank you so much, Jeff, for coming on today. Very excited to have you. Yeah, excited to be here. Thanks for having me on the show today. I really appreciate it. So you have a very interesting background, you know, from any guests that I have had on
Jeff's Career Insights and Diverse Experiences
00:01:48
Speaker
here. And I really want to dig deep into your background and your journey on becoming a financial advisor, because it sounds like, you know, you had a very different path at first.
00:01:58
Speaker
Yeah. You know, and when I interview guests on my show, I often ask that question too, because it turns out like a lot of people have these different stories, right? I mean, it's not like, there's not too many people out there. I think they are like four or five years old and you know, they're in, they're going into preschool saying, Hey, I really want to be a financial advisor when I grow up, right? It's not something that you typically hear from children, right? And that, that wasn't the case for me either.
00:02:22
Speaker
So we all have these kind of stories. And that's what I love about these type of podcasts or web series is that we hear those stories, right? We share those stories. And that collective story is really part of what makes not only this country great, but this this industry great, right? It allows people that may come from various backgrounds become very successful and spread that success to other people as well. So yeah, my origin story is kind of the American story. My dad is a third generation lobster fishman in the small town of
00:02:51
Speaker
Hull, Massachusetts, like HULL, like the hull of a lobster boat. Um, actually named after Hull, England, I guess, I don't know. But, um, but yeah, I started working on the boats when I was about 12 years old. And, uh, we do that. My dad would pay me, uh, $10 to go out for the day on, on the weekends. So you did get paid for that. All right.
00:03:12
Speaker
I did, I did. And you get extra money too here and there. Like if we, if the boat got caught up in some ropes, uh, if I, if I was willing to dive off the boat with a knife in my rope, uh, knife in my mouth and cut off the rope and give me an extra $10. So you lot, you really learned how to make a living pretty, pretty quickly there.
00:03:32
Speaker
But I also learned about different things like, you know, we talk about alternatives, right? You don't think of lobster prices as an alternative, but think about spot lobster prices, the price of bait, price of a box of bait, price of diesel fuel, of gasoline for shipping lobster from one location to another, prices of distributors, trying to find arbitrage by going to one restaurant versus another to get an extra 25 cents for the price of lobster, those type of things.
00:03:59
Speaker
All that business acumen that comes with the territory of owning your own business certainly applies to lobster fishermen. And when I decided to, you know, take off my lobster boots, I decided on financial services for a couple of reasons. I mean, it was back in 1999 and, you know,
00:04:18
Speaker
It seemed like everybody was making money in the market late 1999 and became a financial advisor. Very close, the closest place I would hire me to my house because I didn't have a car at the time. And that's how I got into financial services. Wow. So how old were you at the time then? And I mean, what struck your first, you struck your first interest?
00:04:39
Speaker
though with financial services, I mean. Yeah, so that's a good question. So I was actually, you know, I played ice hockey growing up and I still play ice hockey, men's league ice hockey. And, you know, I didn't think that I was going to do anything but probably work on the lobster boat, right? It wasn't something that I thought that I didn't have the confidence. You know, my father's story is a little different. His dad actually perished at sea before I was born. He was working the boats and got caught up in the lines.
00:05:08
Speaker
It's really dangerous. Yeah. Yeah. I mean, so that was, you know, that was tough for him to make the decision to allow us to even be on the boats in the first place. And, um, not that, I mean, when you're in your twenties, you don't care. You're not scared about that. But, um,
Lessons from Family and Education
00:05:21
Speaker
But, you know, he really encouraged me to get a college education and I played ice hockey, which helped to keep me very focused because I wasn't the best student in the world. It's not that I wasn't intelligent, but I had a little bit of an ADD issue and, you know, as does my son. And, you know, it's funny seeing the next generation and how he's working through some of those issues.
00:05:39
Speaker
Yeah. So, you know, he had to come from this life of scarcity. His mom left when he was 17, took the youngest kids and moved across the country to try to make her own life. The other five kids had to kind of fend for themselves. And so he learned the tough lessons very early that I was able to kind of take
00:06:01
Speaker
And in 1999, I got an offer from the, well, in 1994, I went to college and I got an offer for an athletic scholarship, or it's actually an academic scholarship to Nichols College through the hockey coach, basically. And so, going to this college, Nichols College, that is very known for business.
00:06:24
Speaker
And I really didn't think I was going to be in financial services, but I had many mentors along the way. So one of my teachers, he was actually a marketing professor who actually had worked for Pfizer for a couple of decades. He was the only professor that didn't have like a doctorate, right? He was just this real life hands on professor that everybody hated. They're like, don't get down. He's the toughest
00:06:50
Speaker
professor, you don't want him, oh, you got him, you're done. And I had to keep a 3.0 every semester to make sure I kept my scholarships on. I was like, oh no, I got down. So he's going to fail me for sure. And, you know, best teacher I ever had, you know, he just kind of reconnected. He saw something in me that I didn't see myself. It got me into all these different things like the Mu Kappa Tau National Marketing Honor Society and just saw a lot of potential in me.
00:07:16
Speaker
that I never saw myself. And when I graduated college, I was working on the boats for about six months and I was still deciding what I want to do. And a friend of mine who had been working at Fidelity and working her way through college was telling me like how hard she's working. She's trying to get her degree and she's just trying to work her way up through the system without having that degree and all these things. I'm like, oh, a degree? I got one of those. I should do something with that, right?
00:07:43
Speaker
And so, so that's how it came together with financial services. I, I was working on my dad's boat. I didn't have a car. Um, I wanted to use my education for something. I went on to monster.com in 1999. I remember, I remember monster.com. Yeah. You're probably too young to know what monster.com is. No, I remember some of those commercials.
00:08:06
Speaker
Yeah, they were, they're good. I mean, I, I, 1999 was such a good job market. I was very fortunate, right? If it was 2000, maybe I would be doing something else right now, but I got like 22 offers to come in for interviews. I'm like, who wants to talk to me? I have zero experience. I just worked in a boat. I play hockey. I deliver pizza at night. Like, you know, what do you, what am I going to do in financial services? So I, I got a job with MetLife Financial. Yeah. Wow.
00:08:31
Speaker
I was using my dad's old beat up F, F 150 to get back and forth. It smelled like a old bucket of fish and, um, started to learn, learn the business from scratch.
00:08:42
Speaker
Yeah, that's amazing. I mean, you know, so you didn't grow up learning about financial skills per se, just more of an entrepreneurial
Career Transitions: Entertainment to Finance
00:08:51
Speaker
type of environment. That was more of what it was. I always find it interesting, you know, the journey that we all have. For me, going into finance was very different. I talk about that a lot on here.
00:09:03
Speaker
totally different backgrounds. And so I just moved over to this industry just a few years ago, you know, during the pandemic and kind of reinvented myself away from, you know, the entertainment and fashion industry that I was involved with for 20 years before. But, you know, I think it's
00:09:21
Speaker
it's really important to be open-minded and just keep evolving and I think it's really awesome that you just went into something totally different. So what kind of skills are you passing on to your children? Now I know you're a father and what type of skills are you teaching yours?
00:09:38
Speaker
That's a great question. You know, I'm trying to, it's very difficult to teach children, I think, especially at a young age, they're eight and six years old, but the value of a dollar, you know, and I feel like my father, my parents' generation spent so much time trying to prove that they weren't poor, right? I tried to show that they weren't poor, whatever, you know, they want to make sure that they, that people knew that they were doing well. And I'm trying to,
00:10:05
Speaker
teach my children that we're not affluent, that we're, we don't have unlimited resources. So it's almost like the opposite of that, right? Like they think that everything can come quickly and tomorrow if they need it because of Amazon, the Amazon society, right? Yeah. Right. So, um, and you know, so I worry about that. So I really am trying to teach them to number one, lead with kindness, always, always lead with kindness, no matter what. I, I mean,
00:10:34
Speaker
Hey, we all have backgrounds. I had some rough times when I was younger, um, gone a lot of scraps, you know, had anger issues, just a lot of stuff that goes back. Not just with me, but probably 20 generations in my family. Yeah. I mean, we have a lot of things down. Yeah. Yeah. Right. Right. So it's like, how do you break that chain? Right. How do you break that generational trauma?
00:10:58
Speaker
Yep. Yep. And try to, um, like I said, you know, my dad had barely any mentorship being on his own from the time he was 16 years old and having that happen to him and trying to figure it, figure it all out. And, um, and he did an awesome job, you know, trying to do the best he could working two jobs and as a, as a fisherman and firefighter. And I mean, he would go.
00:11:20
Speaker
out at night to the fire department, traded off his boots, his firefighter boots for fishing boots the other day, and then go back at night again, you know, we would go the other way. And he's still on time to like coach hockey and teach me how to play baseball and ride a bike and all those things, right? And so I'm just trying to teach my children to number one, continue to break that chain of, you know, of not being kind, right? Always be kind.
Promoting Diversity and Kindness in Finance
00:11:47
Speaker
Um, lead together collaboration. And especially in this industry, when I started Brittany in the 1990s, it was that whole wolf of wall street mentality, which I subscribed to. I'm not going to lie to you. I did, you know, I, I just, you know, I, like I said, I played sports, you know, you're in locker room with a bunch of guys, you know, you're, you're excluding women. You're women are excluded from a lot of those conversations.
00:12:11
Speaker
Anyway, and then you get into an industry which is very much male dominated and we're on a sales desk and it's 90% men, right? Or boys, really. We're in our twenties. And you know, it's that boys club thing. And it didn't, it did annoy me though. It really did. The whole alpha male thing, everybody fighting over and everything else. And it just really annoyed me at times, but I did subscribe to it too.
00:12:33
Speaker
Yeah. Yeah. So I want to teach them that they don't have to do that. Especially, especially my son, my daughter, I'm not as worried about yet. Right. Cause she's, she's six. And I think we'll have the worry sometimes with her when she's, you know, 13, 14, you know, it says my wife will tell me, um, but she's, she's just a sweetheart. So she leads with kindness. She is great at supporting her brother and, and really just trying to, you know, be good to each other, which is great and, and, uh, make sure they're open and going out and doing different things, which we, we,
00:13:02
Speaker
We encourage all the time. Yes. And I know you're just, that's awesome. It's so important. And especially as a girl dad, you know, to, you know, teach our daughters how to navigate in this world. So, and on that subject, you are a big supporter of diversity and females in finance. I want to learn more about your role there. Yeah. Yeah. So it was funny, you know,
00:13:31
Speaker
It's sometimes what's good for society is also good for business, right? And so I don't want to try to pretend that I've like, I've always been this rah, rah, you know, hey, look at me. I'm a male feminist or whatever else, right? I'm just someone that's trying to evolve. I'm trying to evolve. I'm trying to be a better person for not only me, but for my wife, for my son, and for my daughter. And I want to see this industry do better, right? I want us to all do better.
00:13:59
Speaker
I learned in that boys club mentality, it's how can I look better than the next guy? How can I look better than that? And I said, guy, because they were all guys. If you had a big win, everybody was jealous or angry. And I'm sure you saw this in the fashion industry, right?
00:14:21
Speaker
That kind of petty attitude of, Hey, I need that person to fail for me to do well. Right. And so don't get me started on model apartments. They stuff you all in there. There's like seven, seven of you, two bedrooms, one bathroom, and you're all going out on the same castings for the same job. So.
00:14:42
Speaker
Oh, I mean, that's a bunch better. Totally cutthroat. All right. So when you come on, you'll have, you'll come on my show and you can talk about that. All right. Well, we'll do, we'll do a reverse survival of the fittest, definitely a wolf, a wall street, but in a different way.
00:14:57
Speaker
Apps a hundred percent. So yes. So, you know, that, that environment is, is, is very, very difficult to, to, you know, to, for people to have different diverse backgrounds to excel in all those separate things. So I realized that it's good for business to in financial services and financial advisory firms to have a better diverse lineup of different professionals, not just because it's the right thing to do, but it's also the right thing for clients because your clients are going to be from diverse backgrounds. Right.
00:15:27
Speaker
I've had advisors say that they don't really speak to the women in a conversation. They've openly said that, that they would rather have them by the window and look out the window and those separate things. And I think that's a mistake in, you know, not to tell anybody how to do their business, but I think that can be a big mistake, not only from a personal level, but also the fact that now when that person is
00:15:47
Speaker
probably going to be a widow at some point by the average in statistics and could be, you know, having another 20 years without a husband. Now they're going to another advisor. 70% of widows actually go to another advisor after their husband dies. And that's because, you know, a lot of these firms are so male-centric that they haven't realized that they have totally ignored the other side of the equation.
00:16:09
Speaker
So that's a long story to tell you. I met Cheryl Hickerson. Um, Cheryl is the founder of females in finance. I met her at a Carson Excel conference in Las Vegas, by the way, at the, um, at, uh, what was it? The Cosmopolitan we had at the Cosmo. Yeah. So, uh, one of my favorite hotels in Vegas. Yeah, it's a great spot. Yeah. So, so we had a booth, we were boothmates. She had a booth next to mine. And I noticed that.
00:16:39
Speaker
All the other asset managers would come around and mostly male and they would come and they would ignore Cheryl. You know, she's just a woman in her fifties. She's just like, just kind of doing her thing over there and she's got a great, you know, photo of her program and stuff, just as females finance, nobody would stop, ask her a question. They just all walked by. What I did notice is every one of the clients and advisors that stopped by her booth were giving her hugs, right? They were saying, how are you doing? Great to see you and all these different things.
00:17:07
Speaker
So I started talking to her and I just say, you know, I said, what do you do with females in finance? What is this? She told me about the program. It's just a network of individuals trying to help women exceed in financial services and have a better share of the
00:17:23
Speaker
It's more that not just more women in financial services. There are plenty of, believe it or not, there are more than 50% of the industry is actually women. Over 50% of financial services is made up of women. It's the positions of power where they're absent, right? So, I mean, think of it the typical, you know, 1990s, you know, early 2000s firm, it's going to be, you know, a male financial advisor and he's got a staff of several women that are helping him move the admin, right? And paid, you know, not a lot of money, right?
00:17:50
Speaker
So how do we bring and sponsor those type of firms to bring up that next generation so that they are also part of that equation to be in the decision-making roles in financial services? I've seen very recently there's a great firm I call Bain Wealth Management. I don't know if that's the real name, but it's Mark Bain out in the Portland area.
00:18:16
Speaker
of Oregon and he's one of his client consultants. She's been with the firm for like 20 years and he encouraged her to go and take the next step and become a financial advisor. She never thought she would do that and she's killing it, right? And she's loving it. So those types of stories where, you know, you're being a sponsor within your own business or you're going outside your business to bring on a more diverse network of people to help succeed together. And by the way, you're doing the right thing by doing that as well.
00:18:47
Speaker
So what do you feel is the best way that we can uplift women than in the financial world? What kind of advice would you say to men specifically on how they can help uplift women? Yeah, you know, Bernie, I wish I had a secret sauce where I could say, hey, this is how we should speak, talk, do those things, right? First of all, just do the right thing in the first place and we'll all kind of end up OK.
00:19:11
Speaker
I think sponsorship as opposed to just mentorship is important. So mentorship is something, and I've done a lot of work with FinServe Foundation, Dr. Julie Reagatz, she talks about sponsorship versus mentorship quite a bit. The mentoring is when you're kind of talking to someone and telling them how to do things, right? Like, Hey, this is how I did it. This is how you could do it. Hey, try this, you know, some of those types of things.
00:19:32
Speaker
Sponsorship is when you actually take that person and put them in front of someone else and say and put yourself out there, right and say, Hey, I'm willing to step up and say, Hey, I can I can really vouch for this individual. I think that she would be a great piece of your overall team and can work her way up up up the ladder.
00:19:48
Speaker
So sponsorship is definitely a big way that men can be allies to women in this business. And don't get me wrong, women don't necessarily need men in the business to be successful. There are plenty of women that had no interjection or help.
00:20:09
Speaker
But if you listen to Cheryl Hickerson of Females in Finance, and I was on a web podcast with her yesterday, and she said she did a survey of over 4,000 successful financial advisors, women financial advisors in the industry. Not only financial advisors, but FinTech and different
00:20:27
Speaker
types of areas and as part of the survey she asked if you had any type of male mentorship in your progress through becoming successful and 100% of those came back and said yes.
00:20:46
Speaker
So, so being a sponsor and advocate, also helping with the younger generation, like Finsler Foundation does run by Jamie Hopkins, who's the CEO of Bryn Maw Cap. We love Jamie. Yeah. Yeah.
00:21:01
Speaker
Yeah, so he's done a great job of that program, but there's only so much that program can do on its own. Another great advocate for women, David Wood out of Gateway Partners is part of LPL. He's got 170 advisors under him, but he's put 450 young people through his internship program over the last 20 years. And he has a very strong focus on
00:21:27
Speaker
on gender equality in diversity. So, I mean, it's tough, you know, because when like, it's one global investments who I work through, who sponsors my investment masterminds program, we're a small shop. And we're based, I'm based in Boston, but we're based in Durango, Colorado.
00:21:44
Speaker
So when we're doing some of these searches, and I don't, I'm not a hiring manager, but when we're doing some of these searches to try to bring in more women into financial services in those roles in these little pockets, it's, it's not as easy. Uh, we had, uh, I think a hundred applicants and only two were women, you know? And so I said, after that, that last hiring we did.
00:22:04
Speaker
And I was slightly involved in it. I said, well, we have to do a better job of doing specific outreach and really finding more diverse voices within our own company, right? Here I am trying to do all this work with like females in finance and Fin CERN Foundation and within Swann. We haven't done a great job. And I don't blame
00:22:24
Speaker
the company for that. It's because we're in a spot where we usually will reach out to either through recruiters or through just the traditional channels. And what we're getting is this just overwhelming response of men interviewing. And it's just a small segment of women that they don't have a shot. So if we reverse engineer that,
00:22:44
Speaker
And we actually like, I mean, LinkedIn's a great way you can do that. You can go through and I started to do this to prep for the next time we're hiring is to really keep an eye on those young professionals that are coming up and putting out great content and great ideas and having great attitudes. And those are the people I want to bring on.
00:23:02
Speaker
going forward. So I know that's a longer answer to a short question, but I think there is, it is multifaceted. It isn't just an attitude change. It's not about, you know, Hey, I'm telling other, other guys that they have to behave better at conferences and those types of things. That's all part of the overall equation. You really have to put yourself out there and be a sponsor. Are you willing to put that sponsorship out there for people to really succeed? More about the outreach. We need more outreach, more action.
00:23:31
Speaker
Yeah, younger, younger so Finserve is great at that so I'd love to, I'd love to help Finserve just like expand, you know, into every college in the country, because they go to colleges, it was just when it was Dr. Julie doing it by herself like going to the all these colleges and, and advocating for more diversity and bring and do in Carson.
00:23:50
Speaker
does wealth management does an awesome job of this. They, they pay for, you know, 50, 60 along with fence or pay for all these kids to come in to all these conferences and be exposed to these great things from these backgrounds. That's what we need. You know, because we, you know, someone that's not taught in schools, although I did actually see it. Um, I did read, I think it was about a month or two ago. I did read that they're going to start rolling out mandatory
00:24:19
Speaker
financial, a mandatory financial course in public schools in the US, like in several, and I think in several places. Yeah, it's so important. It needs to be 100% in every school.
00:24:34
Speaker
Yeah, I've had recent guests on like Johan Harrison, who's the podcast host of the Money Script podcast and also an RIA. A lot of these stories and similar to Jamie Hopkins stories, a lot of these stories come from true scarcity, like, you know, single dad,
00:24:52
Speaker
bankrupt, all those types of things. But there's only a small percentage of people that actually take that experience and are able to turn that around into something that they say, hey, I want to make sure that I can change this for the next generation. Not everybody is able to do that. I mean, it takes a very specific equation of entrepreneurship, drive, and luck. There's such a big part of luck that goes on in life. And if we can take the luck out of the equation,
00:25:17
Speaker
and help those people that want to be helped to be brought along in any way possible. That's where we start to see real change. And we have been seeing change. It's slow, but we have been seeing change in this industry in a positive way.
00:25:28
Speaker
Yes, yes, I believe so. So tell us more about Swan Global. I want to hear more about what you're doing with Swan Global. Oh, thanks so much. Thanks for asking. You know, great company. I started working with them on the West Coast in 2017. And, you know, so I know this is the alternatives Mason.
Traditional vs Modern Portfolio Strategies
00:25:48
Speaker
So we'll, we'll, we'll talk a little bit about the alternative side, because when I started in the industry, remember was 1999 is a financial advice.
00:25:57
Speaker
And traditional portfolios, you know, we just did cookie cutter 6040 7030 type of portfolios, nobody even wanted those everybody won the 8020. I mean I remember someone coming in, asking me if they could buy the NASDAQ with a loan on a credit card.
00:26:13
Speaker
You know, and that the loan, the credit card loan was 22%, but they thought they were going to make 60% on that. Right. So they were like, Oh, that's fine. And I was actually stupid manager. If I, if they could do that and he w he didn't even know that's how, that's how ignorant we were of how the market was going.
00:26:29
Speaker
So I thought, you know, luckily I wasn't a great financial advisor in 99. So it's not like I brought in that much money, but I did feel pretty bad about the money I did bring in because, you know, there were so many portfolios that should have been probably much more conservative than they were. And so that gave me this kind of, this tendency towards risk mitigation, right? This risk management piece.
00:26:53
Speaker
And so it kind of goes in hand when you think about alternatives of different ways you can diversify portfolios and protect and mitigate risk, right? That's a big part of it. And I've asked Shana Sissel on my program, you know, what is an alternative investment, right? So then that's kind of like, you know, the question about how do we make the world better and more diverse, you know, it's not just one answer.
00:27:17
Speaker
alternatives can mean so many different things. It's almost like saying, yeah, I manage equities, right? What does that mean? Is it small cap? Is it mid cap? Is it international? Is it emerging markets? What are you doing, right? And same with alternatives. So unfortunately, they may all get put in the same bucket, right? And sometimes people will think of alternatives as automatically adding risk to the equation.
00:27:40
Speaker
which isn't what I see as alternatives or at least the use case that we do within SWAN and with my network of alternative experts that I work with. So we're trying to bring diversification to portfolios. And I think the biggest problem we've had over the last 70 years since modern portfolio theory was created in 1952 is that, well, now modern portfolio theory is brilliant as Harry Markowitz is and was,
00:28:07
Speaker
It's no longer modern, you know, and we see that when you have these large moves in the market, what happens? Everything kind of moves together now, right? So how do you get different pieces of a portfolio that actually give you diversification to get a smoother ride? And that's where alternatives comes into the picture.
00:28:26
Speaker
So at SWAN, we do it through options, right? So our primary vehicle for risk mitigation is buying a put option, which is basically a mitigating vehicle to help offset losses in the portfolio and get a more consistent return over time is the goal of those type of portfolios. Oh, I was just going to say, what are some of your favorite alternatives and how do you see that space evolving?
00:28:54
Speaker
Yeah, so like in the early 2000s, I worked a lot with more commodities types, which at that time were considered more alternatives, like gold strategies and those types of things. I've worked with Jeremy Grantham's team at GMO, which was more kind of long, short type of strategies, which been considered in that space.
00:29:11
Speaker
I do love the use of options because it's really about outcomes and trying to create outcomes for clients. So I think sometimes we get too much in our own heads when we think about either traditional non-conventional alternative investments to say, all right, what does it do? What does it do? What does it do? Well, what is it supposed to provide? What is the client need, right? And so I like the use of options, obviously, and I work for Swann investments who are options experts. So it's easy for me to say that.
00:29:39
Speaker
because we're outcomes driven. We look at what the client needs and try to get them there through a portfolio and try to get more, at least attempt to get more predictable results over time. So I do like options as a vehicle to be able to do that. But even in the options universe,
00:29:55
Speaker
You know, that's very diverse, you know, so you want to make sure you have options that are very liquid. You don't want to be using kind of esoteric options on very small cap positions that could have a lot of volatility or liquidity risk and those type of things. So you really want to work with someone that knows what they're talking about within the option space to be able to do that.
00:30:13
Speaker
I've had conversations with other people on my show that I know that have worked with Bonrin Capital, which I know that you're affiliated with Bonrin. Cormac Kinney with Diamond Standard, really cool conversation there. I love those ideas of different ways to bring diversification, whether through traditional commodities or other ways.
00:30:39
Speaker
I'm a bigger fan of liquid options than I am or liquid alternatives than non-liquid alternatives because I believe that the everyday person, I just think that they don't have the ability to handle as much risk as maybe like a high net worth individual that can take a 10% chunk. And if it doesn't work out, it's okay. A lot of our clients need that money and that's why we are more conservative on that side.
00:31:06
Speaker
Let's talk hedged equity. So what is the significance of hedged equity in today's market? Well, that's yet to be told, right? So hedged equity is great in two ways, right? It will give you directional performance. So if you are taking, let's say a market like the S&P 500, very simply, and you're just hedging out some of the risk using a put option,
00:31:29
Speaker
It just depends on how much of that put option you want to have on and how close to the money you want to have it on. But you can hedge out some of the larger loss risk, right? One way you could do it is just through a simple strategy that buys a put option to protect the asset. And that helps to add something that's similar to insurance, but you can't call it insurance. It's very similar in how it works, but it's not actually an insurance piece. So I just want to make that very clear.
00:31:53
Speaker
So that's kind of a traditional hedge. Buffered outcomes, so if you have a buffered ETF, that's another way that we've seen a lot of advisors and investors use those type of options-based hedge-type strategies where they'll see an actual number. They'll say, all right, this portfolio over the next 12 months would expect to be down X if the market goes down a certain amount, and it could be up as much as this. So it kind of captures upside and downside, and some people like that
00:32:22
Speaker
that defined outcome in that piece of the portfolio. So, I mean, hedged equity is just like anything else. I mean, you live in Vegas, right? I mean, think about, you know, somebody goes to a casino and they put some money on black, they put some money on the double zeros, they put some money all over the board. They're kind of hedging their bets all over the place.
00:32:40
Speaker
The difference between the casino and the investor is that the client in the casino is almost guaranteed to lose, whereas the market almost always wins over time. So you're kind of the house in that bet where you're the one that's actually have that tilted in your favor, right? So hedging is just, just like anything else in life, you've heard the term hedging your bets. You're just doing that within your portfolio to manage the risk and the volatility profile for your clients.
00:33:07
Speaker
So that's one of the strategies that you'd say that you use the most, especially in a volatile market.
00:33:13
Speaker
Yeah, so when your question about like, you know, what do you like about hedge equity and those types of things, it depends on where the market goes. Like in a 2008 scenario, 2008 financial crisis, when there's systematic risk, when we see correlations come to one and everything is drawing down in this visceral feeling and people are calling you as a financial advisor and saying, what should I do about my portfolio? We really haven't had that since 2008. I mean, 2020, we had COVID.
00:33:39
Speaker
But most people were more concerned about where they were getting toilet paper than they were their statements. And unfortunately I heard some terrible stories about people that actually had to use their statements as toilet paper.
00:33:49
Speaker
We don't want to go there, but yeah, so advisors weren't getting those calls. People were so concerned about their life and their health that they weren't getting calls from their clients to get me out of the market, right? In 2008, that was a different story. When we started to see capitulation at the end of 2008, early 2009, that's when you see the bottom really drop out. And that's when option strategies really pick up. It's almost like owning flood insurance after a flood. And now everybody wants that insurance and you can sell it off to the highest bidder.
00:34:18
Speaker
to actually make a profit and monetize that process.
00:34:22
Speaker
So these large market moves is where options strategies can really help to add a lot of value. But the rest of the time, you're not just waiting for a bear market. Remember, if you're hedged equity, you're equity. Equity is the first piece. That's the bias of the portfolio. You want markets to go up over time. You're not a short portfolio. You're not an inverse portfolio. You're buying an equity and you're just hedging out some of the risk of that to manage that portfolio over time.
00:34:51
Speaker
So what about the technological advancements we've had as far as like digital assets go? How do you think that this is gonna influence the industry overall?
00:35:03
Speaker
Yeah, I mean, I think digital assets are good. I mean, they're not neither good nor evil, right? There's this whole thought that's kind of like the force versus the dark side in Star Wars, right? Like, oh, these are good. These are bad. I mean, yes, there should be regulations around them. And now that we've seen those investments become somewhat blessed in being able to be added to ETFs for liquidity purposes.
00:35:29
Speaker
I think it's a piece of a portfolio that can help diversify. That's also a hedge against the risk of the US dollar and of all the liquidity that we've seen go into the marketplace over the last five, six, seven years.
00:35:44
Speaker
So I don't think it's a terrible thing that there's some competition, right, with the fiat currency, and that hopefully will keep our stewardship of the world currency in check and make sure that we're not just printing money without thinking about the consequences long term. Now COVID was a very interesting scenario and I don't want to
Exploring Digital Currencies and New Strategies
00:36:09
Speaker
say that the Fed did a bad or a good job. I think they've done a fantastic job of making sure that we've had avoided a recession, which is amazing. I never thought they would have been able to thread that needle farther down the line of how does that play out. And I think having digital currencies as a competitor to the US dollar can help to keep the Fed keep up the powers that be in check a little bit.
00:36:36
Speaker
Very good. Very good. Very good. Well, do you, is there anything you want to add or any insight you, you want to add towards the book? I have some, I have some exciting news. Yeah. Tell me, tell me, give it. Yes, we have exciting news. All right. So, um,
00:36:55
Speaker
So we've done primarily hedge equity in the past, but as part of that, we do option writing, right? So which is basically we sell, you know, covered calls as part of what we do overall. So we actually have created a covered call strategy, and we've joined with a partner, an index provider, Oshares Investments, which is CEO is Connor O'Brien, and
00:37:20
Speaker
The chairman of the company is Kevin O'Leary. So most people know Kevin O'Leary from Shark Tank. And so we'll be doing some work with them. So they're just the index provider. They get great high quality US large cap screens that they work through and they'll be providing the underlying equity exposure because we're not equity experts.
00:37:40
Speaker
right, swan global investments, we are options experts. So they'll run the equity side, we're going to write options and collect premium on top of that to get some, what we're trying to attempt to say sustainable income over time and capital appreciation. So it's a great partnership of kind of like the Reese's peanut butter cup of taking, you know, a couple of great things, putting them together and tastes even better, right? That's, that's what we're, we're creating stronger together.
00:38:04
Speaker
Yeah, exactly. Yeah, so yeah, so and we'll be doing an event together on the 27th of February through a firm called Vettify, which used to be ETF trends. So we'll be making that announcement. And that that will be going out shortly. So we're very excited about that partnership.
00:38:20
Speaker
in having an income strategy because these hedged equity strategies are great in these directional markets. And then the income strategies are really good in the non-directional markets, right? Especially, you know, those flat markets where the market's not doing much, five, six, 7%, those type of things. If you can get some additional income on top of that and get total return in excess of inflation, right? And that's when you're seeing some additional benefits. So it's another way you can diversify that overall pie using different alternatives through options. Fantastic.
00:38:50
Speaker
Where do you find your best information to stay up to date on alternatives in the market, how it's evolving in that space? Yeah, I would say the alternative Mason's podcast is probably the best way to go about that, Brittany. I would say that's certainly is one of them. We like to dig deep here. Yeah, absolutely. I do follow Bonray and Capital and Shayna or Successul and the work that she's doing. The Queenables.
00:39:19
Speaker
That's right. The Queen of alternatives. Um, and then, you know, I pull, I draw from everywhere, you know, I will look for, I have my subscriptions all on, on Forbes and barons and everything else. I do my screens on alternatives, but I, you know, I don't necessarily look.
00:39:34
Speaker
When I think about swan global investments, what we do over here, I just think we're just looking for outcomes that are helping clients succeed. So it's not like I'm going out there and looking for the best alternative, right? Or I'm even trying to compete with other alternative asset classes, per se. It's just that options happen to be an alternative asset class in general, right?
00:39:52
Speaker
So it's kind of chicken on the egg. So I'm always just looking for great content and what direction the market's going. What type of strategies will do well or should do well in certain markets and are more efficient as opposed to just trying to say, all right, I need to look at the alternatives universe because that's not really what helps investors in my mind. Investors need help to get to their goals with the smoothest ride possible so that when things get really rough, that they don't make mistakes emotionally. And that's what I believe alternatives can bring to the table.
00:40:24
Speaker
just an extra layer of protection and to diversify and that's, yeah, thank you. You've been so insightful, Jeff. Thank you so much for coming on today and taking the time to chat with us.
00:40:37
Speaker
Yeah, no problem. Anytime you want. I certainly want to have you on investment masterminds as well. I think that would be a great, I think the financial side of fashion is very fascinating. That's a whole other industry that has ties to financial services.
00:40:58
Speaker
And, um, I'm sure you have some, some, I love, I just love hearing stories. Right. And that's, you know, I know that's what you're passionate about hearing more of the background. When I do these types of things and people, what they remember about me is more of the lobster stuff. They'll be like, yeah, I get the fishing boat. Right.
00:41:14
Speaker
It's very memorable because I always ask my guests how they got started. I want to know because my journey was so different. And I really want to encourage other people out there that maybe haven't considered the financial service industry. Be open to it. Learn. Educate yourself. And I think that we all need to have
00:41:39
Speaker
knowledge in this field, you know, no matter who you are. So and I really want to encourage especially, you know, young kids, like we were talking about, you know, becoming more educated and, and uplifting women specifically, too. That's something I'm passionate about. So thank you so much for coming on and sharing all of that. And with us, and I am definitely going to, you know, check out more of what you guys are doing.
00:42:03
Speaker
over at Females in Finance and all this cool stuff you have going on. So thank you. I have some memberships to gift out as part of my partnership. And so I'm going to gift you a membership to the Females in Finance program. That would make me so happy. I would love that. Thank you. Of course, no problem.
00:42:23
Speaker
All right, thank you so much, everyone, for listening in. We are so excited. Thank you for another episode. And Jeff, we're just so grateful for you coming on today. Thank you, everyone. We will see you again next time right here live from the Green Couch.
00:42:40
Speaker
The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you consult your financial advisor prior to investing.
00:43:00
Speaker
Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparisons are unmanaged and cannot be invested into the record. As always, please remember, investment involves risk and possible loss of tackle. Please seek advice from a licensed professional.