Pinnacle Capital Group

The December 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said, “The Index fell slightly in December failing to sustain November’s increase. Low consumer confidence about future business conditions, still relatively weak manufacturing orders, an increase in initial claims for unemployment, and a decline in building permits contributed to the decline. Still, half of the 10 components of the index contributed positively in December. Moreover, the LEI’s six-month and twelve-month growth rates were less negative, signaling fewer headwinds to US economic activity ahead. Nonetheless, we expect growth momentum to remain strong to start the year and US real GDP to expand by 2.3% in 2025.”   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.   https://lnkd.in/d6_VxqcS

Reflections from the Pinnacle Alts Forum 2024: 5 Key Lessons Learned Last October, the Pinnacle Alts Forum brought together leading sponsors, RIAs, and industry experts for three days of collaboration and insights. A sponsor survey highlighted the key “choice drivers” that RIAs prioritize, offering invaluable lessons for sponsors engaging in the RIA channel. Here are the five key takeaways: Valuation Transparency Builds Trust Sponsors who prioritized transparency in valuation reporting scored higher on trust and credibility. Meeting Custodial Needs is Critical Offerings that were accessible on custodial platforms captured significantly more interest and engagement from RIAs. Differentiation Matters Some sponsors went beyond presenting a standard investment thesis by articulating a clear and compelling value proposition. Those who effectively showcased their unique strengths and differentiation from competitors captured the most attention from RIAs. Active Listening Fosters True Partnerships RIAs noted that some sponsors demonstrated a genuine commitment to listening and responding to their concerns. These sponsors distinguished themselves as trusted and collaborative partners. Education Drives Better Engagement Sponsors who provided accessible, in-depth explanations about their asset classes were better understood, which resulted in more meaningful engagement. We extend our heartfelt gratitude to all the sponsors, RIAs, and attendees who made this event a success. Your participation and insights are the driving force behind the growth and innovation in our industry. Interested in attending the next Pinnacle Alts Forum? Visit www.altsforum.com for more details. What do you think of these lessons? Let’s keep the conversation going!

The November 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said, “The US LEI rose in November for the first time since February 2022. A rebound in building permits, continued support from equities, improvement in average hours worked in manufacturing, and fewer initial unemployment claims boosted the LEI in November. It’s worth noting that gains in building permits were not widespread geographically or by building type; they were concentrated mainly to the Northeast and Midwest, and on buildings with 5+ units rather than single-family dwellings. Overall, the rise in LEI is a positive sign for future economic activity in the US. The Conference Board currently forecasts US GDP to expand by 2.7% in 2024, but growth to slow to 2.0% in 2025.“ Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession. https://lnkd.in/d6_VxqcS

The October 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said, "The largest negative contributor to the LEI’s decline came from manufacturer new orders, which remained weak in 11 out of 14 industries. In October, manufacturing hours worked fell by the most since December 2023, while unemployment insurance claims rose and building permits declined, partly reflecting the impact of hurricanes in the Southeast US. Additionally, the negative yield spread continued to weigh on the LEI. Apart from possible temporary impacts of hurricanes, the US LEI continued to suggest challenges to economic activity ahead." Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession. https://lnkd.in/d6_VxqcS

A couple of weeks ago, we held the first Pinnacle Alts Forum in Tempe, Arizona (www.altsforum.com). Thank you to all the participants who made this event a success. We're looking forward to the next Alts Forum, which will likely be on the East Coast this spring. ExchangeRight Real Estate, Fairbridge Asset Management, Griffin Partners Inc., Invito Energy Partners LLC, SAFHarbor, Tideline Partners, WhiteHaven, Quartus Capital Partners, Oppenheimer Development Properties

Pinnacle Capital Group is attending The Finlocity Q4 BD Exec Forum in San Antonio from October 2 to 4, 2024. If you’re there, say hello to Bill Davis.

Allocation to private markets increases returns and reduces volatility!   Here is an article from Carlin Calcaterra and Brendan McCurdy that we found informative. Modern portfolio theory (MPT) is based on the concept that assets can be combined to reduce risk and solely uses public assets. A risk factor approach focuses on outcomes, resulting in a different asset allocation mix that holds 50% in private market assets. Under this new risk factor approach, the authors propose a moderate portfolio holding: ·        Public equity (20%) ·        Public fixed income (30%) ·        Private equity (15%) ·        Private real assets (20%) ·        Private credit (15%)   Compared with a traditional moderate portfolio (i.e., a 60/40 portfolio of stocks and bonds), the new moderate portfolio holding 50% in private market assets has: ·        Higher returns ·        Higher yields ·        Reduced max drawdowns ·        Lower volatility ·        Higher (better) Sharpe ratios ·        Significantly increased portfolio efficiency

🚨 Calling All RIAs! 🚨 Are you ready to elevate your exposure to alternative investments? Join us at the Pinnacle Alts Forum: Oct 22-24, an exclusive, invite-only event designed specifically for fee-only RIAs. 🌟 📅 When: October 22-24, Phoenix, AZ 💡 Cost: FREE! Your travel is covered, but space is limited to just 20 RIAs. Don't miss this opportunity to grow your practice with valuable insights and connections! Click the link below to learn more and secure your spot today. ⬇️ www.altsforum.com #RIA #AlternativeInvestments #AltsForum #Networking #ComplianceEducation

The July 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said, "The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead. In July, weakness was widespread among non-financial components. A sharp deterioration in new orders, persistently weak consumer expectations of business conditions, and softer building permits and hours worked in manufacturing drove the decline, together with the still-negative yield spread. These data continue to suggest headwinds in economic growth going forward. The Conference Board expects US real GDP growth to slow over the next few quarters as consumers and businesses continue cutting spending and investments. US real GDP is expected to expand at a pace of 0.6 percent annualized in Q3 2024 and 1 percent annualized in Q4."   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.   https://lnkd.in/d6_VxqcS

Darren W., our EVP, will lead the RIA Roundtable discussion at the Institute for Portfolio Alternatives (IPA) Vision and Due Diligence Symposium in Orlando, Florida, on Wednesday, September 25, 2024. Hope to see you there.