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The Zoe Blog

Andres Garcia

CEO @ Zoe Financial
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Recent Posts

Wealth vs. Income

Posted by Andres Garcia on Oct 4, 2017 11:05:22 AM

As discussed in my last blog, We're the wealthiest we've ever been... but who is 'we'?, Americans are the wealthiest they have ever been as a result of a surging stock market. But this new wealth does not drive consumer spending much, since the wealth is unevenly distributed. It turns out that 94% of stocks are owned by America’s wealthiest 10% of citizens. This matters because spending across income groups is uneven, as the middle class spends a much bigger percentage of their overall income than the wealthy.

The main driver of the U.S. economy is consumption. Therefore, an important question to ask is, going forward, what would cause the average American to spend more? Well, there are two options - one is for people to borrow more (which is not ideal) and the other is for them to see their incomes rise. And there lies the rub, U.S. wages haven’t risen much since the 1990s once you adjust for inflation.

An easier way to look at this is to split the economy into three main building blocks:

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Topics: Investment Insights

We're the wealthiest we've ever been... but who is 'we'?

Posted by Andres Garcia on Sep 27, 2017 11:10:00 AM
  • American households are the wealthiest they have ever been.
  • This current wealth is driven by a surging stock market.
  • A surging stock market does not have the same wealth effect on consumer spending as a booming housing market.

The new Federal Reserve household data showed U.S. households reached a record net worth of $96 trillion in the second quarter of this year. It is the seventh consecutive quarter in which we have reached new levels of wealth as Americans.

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Topics: Investment Insights

Nuclear North Korea - how will the US play it?

Posted by Andres Garcia on Sep 20, 2017 8:05:00 AM

In my previous blog post on North Korea, I explained how North Korea came into being, as well as the main players and their incentives in this current nuclear situation. It is now time to go through the likely scenarios going forward.

I am not going to rehash the escalation of tensions during the last eight months - the point is that tensions are escalating. The focus of this blog is around strategic options that the U.S. could apply going forward… so here we go.

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Topics: Investment Insights

Nuclear North Korea: the full scoop

Posted by Andres Garcia on Sep 7, 2017 11:45:54 AM

When asked by the press and clients what investors should do as a result of North Korea’s escalating threat, I have answered “Do Nothing”. Now, this is not a result of disinterest in the topic. My father was an ambassador to the United Nations in the 1990s, with his area of expertise being nuclear non-proliferation, so while for most people Sunday evening dinner conversations touched on the Giants or the Yankees, for us the time would be spent getting into the weeds on the situations in Iran, Iraq or North Korea. (This also partly explains my lack of friends in middle school.)  Additionally, in my last role at JP Morgan, I got to learn about geopolitics within an investment framework from my mentor George Iwanicki, who is a prolific global historian (second only to my dad). In other words, I know enough to know that this topic is complicated and thus it is very difficult to predict a particular outcome… and even more difficult to predict how the markets will react.

Nevertheless, despite the North Korean developments being difficult to predict, it is important as a global citizen to understand what is going on. So here goes my shot at providing some context.

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Topics: Personal Finance, Investment Insights

Financial advisors, the tell-all series. Part 4: Do I need a financial advisor?

Posted by Andres Garcia on Aug 23, 2017 10:47:00 AM

In Part I of this blog series we outlined the different ways in which financial advisors make money, in Part 2 we looked into the differences between a broker and a registered independent advisor (RIA), and in Part 3 we discussed what value a GREAT advisor offers to their clients.

That’s great and all, but do YOU fit the description of someone that needs an advisor?

In this blog, Part 4, we provide a couple of profiles, all with different personal financial situations and needs. These examples are not meant to be recommendations or to cover every scenario under the sun, but rather to serve as a starting point on the journey of financial-awareness.

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Topics: Personal Finance, Financial Advisors, The Tell All Series

Financial advisors, the tell all series. Part 3: What Makes For A Great Advisor?

Posted by Andres Garcia on Aug 15, 2017 11:02:00 AM

In Part 1 of Financial Advisors, The Tell All Series, we outlined the different ways in which financial advisors make money and in Part 2 we looked into the differences between a broker and an independent advisor (RIA).

In this post, Part 3, we dive into what value a GREAT advisor offers to their clients.

 

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Topics: Personal Finance, Financial Advisors, The Tell All Series

North Korea escalation: What are the investment implications?

Posted by Andres Garcia on Aug 9, 2017 1:43:21 PM

Against the backdrop of an escalation of words between North Korea and President Trump, investors are scrambling to figure out what this means for their portfolios.

Should I hedge my portfolio by buying gold? Should I sell stocks? 

My response: Do nothing.

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Topics: Investment Insights

Financial advisors, the tell all series. Part 2: Brokers vs. Advisors

Posted by Andres Garcia on Aug 8, 2017 11:00:00 AM

Some people use the terms "financial advisor" and "broker" interchangeably, although they mean starkly different things. As someone wanting to take charge of your personal finances, these differences are important to understand.

This is the follow-up to Financial advisors, the tell all series. Part 1: How do advisors get paid?.

In this post, the second in our 4 part blog series, I will outline the differences between a broker and an independent advisor.


What is a broker?

A broker, or registered representative, is someone that has passed a state test allowing them to sell financial products such as bonds, stock, annuities and mutual funds. Brokers are overseen by FINRA, which is a broker self-governing body. Brokers are usually employed by a large broker-dealer such as Merrill Lynch or Morgan Stanley, or an independent broker-dealer like LPL, Ameriprise, or Edward Jones.

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Topics: Personal Finance, Financial Advisors, The Tell All Series

Financial advisors, the tell all series. Part 1: How do advisors get paid?

Posted by Andres Garcia on Aug 1, 2017 12:03:33 PM

A few years back, as a global strategist at JPMorgan, my job was to provide market and economic insights to financial advisors around the world. At one point, I was doing 240 presentations a year and speaking to thousands of financial advisors. The experience gave me a good grasp of their business.

The journey of using a financial advisor can be daunting for many, and the ins and outs of the business can be overwhelming. With this in mind, we created this blog series, Financial Advisors, The Tell All. In this initial post I will outline the different ways in which financial advisors make money. In the upcoming posts I’ll dive into the different players, Brokers vs. Advisors, followed by What Makes For A Great Advisor? and finally, Do I Need a Financial Advisor? My aim is to tell all, so that you, our readers, can make informed decisions. 

 

Five Ways Advisors Get Paid

There are 5 payment methods, each of which has its pros and cons for the client. The pros and cons metioned here relate to the way in which each method helps to align the interests of the advisor with those of the client. The more closely aligned, of course, the better.

 

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Topics: Personal Finance, Financial Advisors, The Tell All Series

Are the golden years of Wall Street over?

Posted by Andres Garcia on Jun 27, 2017 9:47:00 AM

As is so often the case, the answer is both yes and no.

I worked at Morgan Stanley and J.P. Morgan during the 2004–2016 period as an institutional trader and then as a global strategist. I recently left to start my own fin-tech startup Zoefin.com, so I have a good picture of how things went down and also how technology is changing Wall Street drastically.

Why No?

Although the players change and the market gyrates between boom and bust, Wall Street finds a way to re-invent itself. Back in the 80s, junk bond traders ruled the world. By the late 90s, the rage was to be a tech banker or trader... then that went bust. In the 2004–2008 period the bond traders were kings. I am talking about friends that were 27 years old making well over $1mln dollars working 8am–4pm. Bottle service 4 nights a week,Ferrari, $2mln apartments, no money down in NYC… you name it.

During the 2009–2014 period the talent moved to the “buy side” to Hedge Funds and Mutual Funds. And trust me those where golden years in these places. Forget just the investors, there are sales people at plain vanilla Mutual Fund companies that were making well over $1mln. And the conferences to rally the troops... way over the top. We'll leave it at that. As Hedge Fund returns diminished with so much competition, talent has moved into Private Equity. There are mid level guys at large PE firms that pull $1-$5mln a year right now. Meaning that their lifestyles at times are pretty extravagant.

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Topics: Investment Insights

*All investing is subject to risk, including the possible loss of the money you invest.

**The projections or other information generated by Zoe Financial, Inc. regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

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