The Johnson Team

While the rapid ascent of Artificial Intelligence (AI) technology has inspired much excitement in the media and stock markets, many companies are still exploring the medium to long term impacts of AI technology on their business. Third-party vendors such as Morningstar are using AI and coding languages to improve data and analysis services for their clients. Some managers are using generative AI models to find insights from large language models to help conduct sentiment analysis of comments, reports, and calls from company management teams. While we feel that there could very well be efficiencies created by AI in this space, our general thought is that the human element of investment research and portfolio management will remain a critical component of the industry. 

A “higher for longer” interest rate is reflective of Federal Reserve monetary policy meant to constrain economic activity to combat stubborn inflation trends.  An environment of elevated rates and persistent inflation necessitates a proactive and flexible approach to financial planning, utilizing portfolio diversification, strategic asset allocation, risk management, and awareness of economic trends to achieve goals and objectives. Inflation can erode the purchasing power of money, making it crucial to have a diversified portfolio that includes assets with return potential to outpace inflation. This might include investments in tangible real assets, such as global infrastructure or real estate; both have historically demonstrated resilience during equity market downturns and can serve as an inflationary hedge.  Higher interest rates can be of benefit to investors with fixed income allocations given the increased yields which provide more cashflow to deploy. To be sure, higher rates do put more strain on corporate capital structures and spending and thus, we rely on professional investment managers to identify companies managing their balance sheets prudently and finding ways to successfully produce durable cashflows, profits and growth. 

Knowledge-based authentication (KBA) questions are a type of security measure that verifies the identity of a user by asking them to answer questions based on their personal or factual information. The DocuSign eSignature KBA uses an identity verification service from LexisNexis Risk Solutions that validates user identities in real-time. Recipients are asked a series of dynamic KBA questions generated from information from commercially available sources such as credit reports and public records.