Trends Watch: October 5, 2017

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to Steven Kaczmarek, President, East End Wealth Management.

What is your outlook for the future of alternatives?

Our enhanced income strategy is considered an alternative investment even though it looks like a bond portfolio.  We are in the alternatives space because we believe it allows us to give clients direct market participation with greater efficiency.  We expect the space to grow as more like-minded managers create or combine traditional products and strategies.  This will compress fees for some traditional managers but investors should be the winners. 

The biggest challenge for alternative managers is growing to scale.  Pressure on fees is never ending and additional monies come from new products or increased scale.

What is your economic outlook?

The economy is in its ninth year of a Fed-induced expansion.  We know that these types of easy money policies have created much greater investment and returns in financial investments than in economic or business investment, so Main Street has not really recovered. Some might see that and argue for more stimulus.  That would be a mistake.  A byproduct of easy money has been the widening gap between social classes in the economy.  While there are some winners, the majority have been left out.

What keeps you up at night?

The increasing pace of conflict in our society is the biggest concern.  Wherever you go, in America today someone claims to have it all figured out.  Not only do they have an opinion but they are quick to share that you are stupid if you do not agree.  These people make us think.

We try to learn something new every day and we are usually successful.  Society and community are growing and evolving things that thrive on conversation, debate and argument.  The virtuous cycle of question and debate before action seems to be dying in America.

What do you think will replace it?