John Bryson:
Hello, and welcome to the Portfolio Intelligence podcast. I'm your host, John Bryson, head of investment consulting and education savings at John Hancock Investment Management. As always, the goal of this podcast is to help investment professionals deliver better outcomes for their clients in their practice. Topics we typically address include advisor business-building ideas, capital market updates, the latest trend in portfolio construction, and investment insight from our veteran portfolio managers across our global network. Today, I'm joined by a Brendan Barca who is a coach, speaker, and consultant that specializes in helping financial advisors leverage technology to build their business. Brendan built his own business remotely by using tools such as Zoom, WebEx, Google, and LinkedIn effectively. He now teaches advisors how to seamlessly enter the digital age through live workshops, webinars, and online courses. He has worked with numerous advisors at financial institutions, such as an Ameriprise, LPL, UBS, and Edward Jones. Brendan, welcome to the podcast.

Brendan Barca:
Thank you so much, John, for having me. It's great to be here.

John Bryson:
Great. Okay. So today I want to talk about LinkedIn and how investment professionals can use it to grow their business. I know it's an area that you're well versed in. So let's jump in. The first question I'd like to kind of hit is many advisors are used to traditional prospecting models, such as cold calling or in-person networking. Can you talk about how LinkedIn can either complement or supplement these approaches?

Brendan Barca:
Yeah, absolutely. And I appreciate the question, John. So, as someone who grew up in a sales culture, I'm very familiar with the more traditional methods of building relationships with prospects. We did cold calling, cold emailing, and then meeting people in person whenever they were in town or whenever we visited their city. And those are still relevant today as ever for financial advisors who are trying to grow their business, but really the biggest way that people can start using techniques outside of those is going to be through LinkedIn, and LinkedIn can really be the third arm in this approach. So if you think of your first arm as being your cold outreach tools such as emailing and cold calling, and then also your in-person networking, the third one, that many advisors still aren't taking great advantage of, is using LinkedIn. And the reason why it's so impactful is that we all know email is oversaturated.

Brendan Barca:
So clients and prospects are getting way too many emails. I'm sure you, John, are also getting too many emails today, but LinkedIn and LinkedIn messaging or InMail are going to be effective ways to get higher response rates. In fact, one recent research study from LinkedIn Business Solutions showed that you're likely to get a five times response rate from sending a LinkedIn InMail versus sending a standard cold email. So for example, if you're used to sending out a hundred cold emails in a day, you get maybe three replies. Well, if you do this over LinkedIn, instead, you could potentially get up to 15 responses.

Brendan Barca:
So if you're not already using LinkedIn as an alternative or something to use in tandem with either cold calling or with cold emailing, then you're missing out and it really can be something that can complement those more traditional approaches and you can use all those things together. And the key to that is going to be getting into a routine of using LinkedIn on a daily or weekly basis, which I think is going to take time. But for those that are dedicated, want to see results is something that's totally attainable for you as a financial advisor.

John Bryson:
So when I talk to our salesforce, we're hearing that some advisors are having a ton of success with LinkedIn while others are struggling and have little success. You mentioned kind of making it a habit, making it part of the process. What else separates successful advisors that are using LinkedIn from the rest?

Brendan Barca:
Yeah. Great question. And so first I think the biggest thing I see from unsuccessful advisors on LinkedIn, the ones that have told me in workshops that they're having zero success, they haven't gotten a meeting from LinkedIn. It's two main things. Number one is that they're selling too fast. I think the biggest mistake we can make on social media or when we're trying to build up relationships is coming right out of the gates and trying to ask someone for a meeting. Just using the standard cold email approach, but putting it into a LinkedIn connection message. So this is a big turnoff, I'm sure you, John, or anyone who's listening has gotten cold outreach approaches from LinkedIn, from people you've never met before. And what do you do? You probably decline the message, never talk to that individual. So instead, what we have to do on LinkedIn is we have to gradually build relationships.

Brendan Barca:
And how do we do that? We have to connect with the person first on more of a networking basis. And then once they're in our network, that's when we can slowly start to build rapport by creating great content that's geared toward them, but also by sending them things that are valuable through private messaging, such as articles or seminar invitations. So it has to be a slower approach versus that approach of being too fast. So that's one of the biggest mistakes advisors make in terms of what unsuccessful advisors are doing. The second thing is that they don't have a consistent approach. So if you're not using LinkedIn on a weekly basis, you're not going to be able to get the results that many other advisors seeing. I mean, think of it in terms of your other business-building activities. If you're doing a hundred cold calls a day, or you're going to five different in-person networking events, each of those activities can net certain results.

Brendan Barca:
It's the same thing with LinkedIn, but you only get the benefit if you put the work in. So you have to connect with a certain number of prospects each week; you have to send a certain number of messages each week; you have to create content. So it's all about putting it into the routine. So for the successful advisors, they're essentially doing the opposite of what those unsuccessful advisors are doing. They are, number one, focusing on building long-term strategic relationships, not rushing to a sale, but rather naturally progressing to a conversation. And number two, they have a weekly process in place of having certain activity metrics they're trying to hit within LinkedIn, much like you would with any other prospecting method, whether it's emails, cold calls, or even door knocking. So I would focus on those two things to be successful, focus on strategic long-term relationships and also having a weekly process.

John Bryson:
Now you started to mention some of the mistakes that you see out there. Let's dig into that, specifically around prospecting. What's the biggest mistake you've seen advisors make in that regard?

Brendan Barca:
Yeah. So outside of the fact that many advisors are selling too quickly, which is definitely one of the top things I see, the other item that I've seen for a lot of advisors that are making mistakes on LinkedIn is when you think about their content. So LinkedIn has the opportunity to create your own essential marketing by putting content up on a newsfeed and essentially doing that all for free. Now many advisors, whether they are at a wirehouse or at an independent shop, are simply repurposing their marketing content that's coming back from the home office and putting it onto LinkedIn. The problem with this as many advisors probably experience is they're probably only getting one like or very little engagement, whereas the advisors who are really capitalizing on LinkedIn are creating more original content that's coming from the individual. So we want to make sure we're not just putting up different articles coming from your home office.

Brendan Barca:
I mean, those are good sometimes, but they're not going to show who you are as an advisor. And the biggest reason why people hire you is because they want to get to know who you are, John, or who the advisor is. So the biggest mistake I've seen from advisors is creating no original content. And they're wondering why they're not getting any likes or engagement. It's because you're putting up content that all the other advisors in your broker-dealer are sharing as well on the same exact day. So think about one thing a month or one thing a week you can do to share that's different. Maybe it's a picture of you in your office, or maybe it's a story about how you got into the industry. Think about those things, make sure they're coming from your mouth and not just the mouth of your company. And that's going to help you to stand out on LinkedIn, get more engagement. And those engagements can lead to offline opportunities with prospects and clients alike.

John Bryson:
Now I've had the benefit of seeing you in action before and one of the things you talk about is the importance of owning a niche or niching down on LinkedIn or niching down, depending on pronounce it. Can you talk more about that and explain why niching on LinkedIn is critical and maybe how advisors should go about doing it, being effective at it?

Brendan Barca:
Yeah. Great question. And so for LinkedIn, and really just for building a business in general, creating a niche is going to be imperative to your success. And on LinkedIn, if you don't have a niche, you're going to go on there and wonder, who am I supposed to connect with? What am I supposed to say in my messages? You're not going to have any direction. But if you clearly define a niche as to who your ideal prospect looks like, it's going to make your LinkedIn activity easier in four main ways. One, when it comes to finding prospects, two, connecting with them, three, branding on your profile, and then four, when it comes to the content you create.

Brendan Barca:
In terms of number one, when it comes to finding prospects, if you have a clearly defined niche in mind, let's say you're an advisor in Omaha, Nebraska who wants to go after a C-suite member in the pharmaceutical space. If that is your defined niche, you'll very easily be able to develop the filters on LinkedIn to find those pharmaceutical executives in Omaha. But if you don't have a defined niche, you might just pull up a whole list of a million people that are CFOs across the entire country. And you'll wonder who to start with. So defining a niche is going to make searching on LinkedIn that much easier.

Brendan Barca:
Then number two, in terms of connecting, keep in mind the number one reason why people accept invitations on LinkedIn is if you have a mutual connection in common. So by connecting with more people in your defined niche, it's going to become easier and easier to knock down new doors as your connections are going to grow in that industry or in that company. So connecting is going to become easier and easier, the more you define your niche.

Brendan Barca:
Then third, when it comes to branding on your LinkedIn profile, you want to take advantage of your background photo, also of your about section to clearly identify and articulate who your niche is. By having a profile that speaks directly to your ideal prospect, whether it's a physician or whether it's a CFO at a different company, that's going to help the person understand that you could be a good advisor for them, but if you don't have a defined niche, your profiles may look just like every other advisor out there. And guess what? Every advisor has similar expertise, similar years of experience, but you have to make sure that you stand out in terms of who you serve specifically.

Brendan Barca:
And then finally, number four, when it comes to content, which we just talked about a moment ago in the last question, if you define a niche such as those pharmaceutical industry executives, or maybe those physicians, you can start creating content made specifically for those folks in that way. Because if a physician is reading an article about how physicians can prepare for retirement, all of a sudden, you've grabbed that person's attention. And they'll think of you as their potential financial advisor. So really, before you even go onto LinkedIn and start doing any prospecting, you want to define your niche and it's really going to help you when it comes to finding, connecting, branding, and creating content.

John Bryson:
Now, you mentioned content a couple of times. I want to expand on that. With your work with advisors, coaching them, how do you advise they navigate the compliance restrictions that they might run into as they're creating content for clients and prospects?

Brendan Barca:
Yeah. Compliance has definitely been something that as I've worked with in the industry for over a decade now. It's been a challenge for advisors who are trying to be great on their LinkedIn and are trying to actually make some different prospect opportunities through the platform. So one of the biggest things, of course, it's going to be varied depending on your broker-dealer. So whether you're at a wirehouse or you're independent, you're going to have different rules. So you have to know what the rules are at your firm. What can your branding of your profile be? What does the content you can create? Can you send private messaging? And then really once you understand what the rules are, you can then start to play within them. So when it comes to content specifically, the overarching rule that I've heard from under FINRA is essentially you can't talk about products or services.

Brendan Barca:
Now, outside of that, there's a lot of ways to be original with content and to talk about things that aren't necessarily business related. And I've seen those types of posts actually do really well on LinkedIn and sort of become a new generator of getting business opportunities. Even though they're not specifically talking about a service such as estate planning or five to nines. For example, there's a Wells Fargo advisor I monitor on LinkedIn, I've done some work with, he's out in Ohio, and I've seen him put up original posts that are pretty creative. I saw one recently where he had a picture of himself in front of a bunch of pillows on his couch. And he talked about the story about how many pillows he has in his house and how he has to diversify his pillows, depending on what room he's in of the house. And essentially, he tied it into how this is also should be diversifying our retirement plan needs. So a diversified portfolio.

Brendan Barca:
So using creative stories from your personal life and then tying them into what your clients or prospects needs are. It can be creative ways to create content and be able to attract people's attention, get a good message across while having fun too. So I would challenge everyone, first of all, to know what the rules are in your broker-dealer. Once you know the rules work on creating more personalized stories that can allude to how you help people, but not necessarily talk about specific products and services. And that's one great approach I saw from a wealth advisor and that must be compliant. He's been posting things like that for a number of months now. So one great example of how to be effective with content.

John Bryson:
That's great. I mean, tying in your personality, with a little bit of humor with the pillow. That's an excellent idea. Let's say ... This isn't going away, social media and how people promote and get their name out there—certainly not going away. Let's say one of our listeners gets really excited and wants to jump on LinkedIn today. What advice you want to give them to immediately impact their business?

Brendan Barca:
Three things that advisors should do when it comes to jumping on LinkedIn, especially if you're an advisor who's newer to LinkedIn trying to really get repped up so you can start seeing success. Number one is you have to make sure that your profile is set up correctly and that you are speaking to your ideal prospects. And the easiest way you can do that on your profile is updating your headline. So as long as your firm allows you to change your own headline, again, check with compliance, you can use your headline to be able to speak directly to those prospects. For example, rather than saying something like financial advisor at Edward Jones, you could say something like specialist in helping guiding pharmacists to retirement. So what we're doing there is we're calling out who we're helping and what our specialty is in helping those individuals. So if you haven't already considered changing our headline to something more, value driven I would consider going in and making that change.

Brendan Barca:
Now, if it's not compliant, you're going to have to do that in the About section. But the headline is the optimal place to change your branding, as that's going to be what prospects see when they come to your page, it's a really easy place for you to articulate your value. So on your profile, consider using your headline to be able to articulate your value and who it is that you're serving to help a with serve a problem. Second thing you want to do is simply start connecting with all your current clients. The easiest way to grow your network on LinkedIn is through your current network. But the only way you can know who to connect with outside of your clients is if you're already adding them to your network. So after every client meeting or have your admin or marketing person go through and add every client to your network, that'll be an easy way to start getting more connections to people they know who you don't yet have introductions to.

Brendan Barca:
And then third, the biggest one is if you want to start seeing immediate success on LinkedIn, you have to have a weekly process in mind, and you have to be thinking about what those weekly goals are. The two most important things to do on LinkedIn in a weekly basis is number one, connect with prospects. So set a weekly goal for yourself. I know one advisor was trying to do 25 connection requests per week to add certain prospects into her network. So that's a great goal to start with. And from that you're going to see a certain number of people start to accept your invitation.

Brendan Barca:
And then number two, start sending messages to people that are already in your network. So if you have prospects coming into your network, start sending them valuable articles, different ideas, maybe asking for a meeting when it's appropriate. But if you do those two things on LinkedIn alone, you're going to start to see success. Number one, connect every week, and then number two, send messages and set a weekly metric for each of those things. I think 25 connections and 25 messages could be a good place for many advisors to start.

John Bryson:
That's great insight. As I think about it, I have to apply some of these to my own LinkedIn approach because I'm trying to drive attendance to this webcast and I've written down a couple of things that I'm going to do to be more systematic about it. So that's really helpful. I guess the last question I'll ask, and it applies to advisors, but I'm going to listen to it for myself, is if we implement these techniques on LinkedIn, how long should advisors expect to see some positive results?

Brendan Barca:
So what we have to do is we have to first keep in mind that the way that LinkedIn and social selling works, it's a much more strategic approach to business building than it is a quick way to get a fast meeting. So the LinkedIn process should, first of all, consist of you connecting with your prospect and within the first month learning about who they are, what they care about, what their About section says. And then really after the first month is when you want to start sending valuable things through private messaging. So sending them valuable articles or maybe podcasts you've recorded, those are great things to provide as value before you even ask for a meeting. And then about a month or two out, that's when you can start asking for meetings if the person has gotten back to you, if they're resonating with your material, if they're giving you a like on LinkedIn, that's when you can start to bridge toward those offline conversations.

Brendan Barca:
So if you are doing those things consistently of connecting, sending messages to build rapport, creating content, and then also asking for meetings when appropriate, you can expect to start seeing some results of growing your network and landing meetings. I'd say within the first three or four months, again, as long as you're consistent and you're doing these things on a weekly basis at scale. You can connect with one person a week and expect results. It's got to be at a high enough volume, just like when you're doing emails or doing cold calling, we have to get volume in order to see success. So I would say about three to four months, if you're applying the different tips we've set here today, that'll be a great way for you to test out if LinkedIn is going to work for you.

John Bryson:
Well, that's some excellent insight you shared with us today, Brendan. That slow-and-steady approach, add value first, be consistent, make it a habit. All those things come into play in a number of different areas, but they certainly do if you want to be successful on LinkedIn. Brendan, I know we've got a lot of content available on our website that hits this topic and other topics. We've got videos and other downloadable resources. So I'm going to encourage our audience to check out jhinvestments.com to find those resources. You can also go there to just grab the Portfolio Intelligence podcast, or you can go to iTunes or other places you find your favorite podcasts. You can also go to our website to read our viewpoints on macro trends, portfolio construction techniques, a lot of different business-building ideas, and much, much more. I want to thank everybody for listening to the show today.

John Bryson:
Hello, and welcome to the Portfolio Intelligence podcast. I’m your host, John Bryson, head of investment consulting and education savings at John Hancock Investment Management. Today is September 16,
2021, and I’m joined by Emily Roland and Matt Miskin, our co‐chief investment strategist at John Hancock Investment Management. As you may know, Matt and Emily are the architects behind our quarterly capital markets outlook piece titled Market Intelligence. Matt and Emily also gave me a sneak peek at a new blog they’re working on where they discuss four myths facing fixed‐income investors today. Hey Matt, why don’t you jump in and tell us why you put this piece together in the first place.

Matt Miskin:
Thanks for having us, John. We’re really excited about this piece, and really this is us going through some of the data and really fact‐checking some of the prevailing assumptions in the fixed‐income market, and making sure that these risks that we’re hearing in the fixed‐income markets really show up in historical data. And Market Intelligence, as we all know, is kind of where we stress test things, where we’re looking at the fixed‐income risks out there and thinking about positioning. But in this blog, we’ve got four major, what we believe, are misconceptions or myths around the fixed‐income markets.

Matt Miskin:
So the first one, in essence, is that the Federal Reserve raises rates in midcycle environments and that you want to be in short duration. So midcycle is the part of the cycle we believe we’re in. But what we found was that actually the makeup of performance is a bit different, and the leaders in laggards in midcycle investing in fixed income, aren’t as intuitive as you might think.

Matt Miskin:
Another one is that the Federal Reserve is likely to taper quantitative easing, and the thought would be that Treasury yields would rise as the Fed buys less bonds. Counterintuitively, we found actually that that hasn’t been the case in the last times that they have done tapering, so we’ll talk about that.

Matt Miskin:
Another one: Investors should look for the equity market to provide yield or income given that the bond market is providing so little yield. We have some kind of differentiated views on that and some thoughts, risks that should be considered for that kind of move.

Matt Miskin:
And then the final one is that greater supply results in higher Treasury yields. So we all know that government is issuing more Treasury debt to fund the stimulus from the pandemic. But counterintuitively, in fact, more often than not, yields don’t rise on greater supply, and we could talk about some of those details. So a lot to cover, but we think that this is very helpful for setting the stage as a fixed‐income investor and what is becoming an increasingly challenging environment in terms of bond investing more broadly.

John Bryson:
And it's certainly timely, because these are all challenges we’re hearing about in the marketplace and I’m sure you are too. So, Emily, I want to pull you into the conversation. One of the myths that Matt had mentioned, let’s start with this one. It’s about shortening the duration; it’s been a popular move on and off over the last few years or if not longer. Why are you advising against it right now? Let’s dig in a little bit deeper.

Emily Roland:
Thanks, John, for having us today. And I first want to apologize for a couple dings that you heard there. I made the rookie mistake of leaving my email open on our podcast today. So still learning lessons here even 18 months into working remotely, so apologies for that.

Emily Roland:
You know, I think this is one of the biggest kind of misconceptions out there around the Fed raising rates. You want to be shorter duration, and it’s actually something that we typically hear after recessionary period. So the idea is that when you are in this sort of early to midcycle environment, or the first couple of phases after the recession, the 10‐year Treasury yield is going to rise as the economy improves, as inflation picks up. But when we look more closely at the data, yes, there is an initial backup in yields right after the recession, but it’s actually pretty short‐lived. And the peak in the 10‐year Treasury actually occurs right after the recession. We looked at that over the last 40 years—four different economic cycles—and we found that the 10‐year Treasury actually did find its highest level of the cycle within a year. After the recession and it peaks and then it fluctuates in a trading range, and then it ultimately finds a new lower low in the next recession. And this has had a huge impact on the relative performance that we’ve seen across different parts of the fixed‐income market.

Emily Roland:
So one thing we do in this paper is look at, and previous work that we’ve done, is look at Morningstar category returns over those, the last two cycles. And what we found is that short duration strategies, which frankly have attracted a ton of assets, have actually been the worst relative performers in midcycle periods. The best performers, meanwhile, have been corporate bonds, including high yield.

Emily Roland:
And the logic here is that the shorter duration strategy, the forecasts are going to offer lower income potential, given the low‐rate environment, while corporate bonds actually don’t see as much of a duration headwind as investors expect, because again, longer dated Treasury bond yields actually end up staying more anchored than expected. So instead investors are going to be able to benefit from that greater income potential you’re going to get being further out on the curve.

Emily Roland:
So bottom line is that overemphasizing short duration strategies and fixed‐income portfolios, you may leave returns on the table doing that. We suggest instead looking to corporate credit, earning that greater income potential for this middle part of the cycle, looking at intermediate term and really positioning for this midcycle environment that could last for some time here.

John Bryson:
No doubt. That's excellent advice. It takes this focus away from the short term and over to medium and long term where you’re really going to get some value for the investments that you have.

John Bryson:
So, Matt, I want to come back to you. The second myth that you and Emily challenged is that when the Fed starts tapering bond purchases, the yield on long‐dated Treasuries, they're going to rise. That seems logical, that thesis that when demand dries up yield should rise. So what are people missing?

Matt Miskin:
So this is going to be a big development into 2022. The Fed has really forecasts that are foretold, that they’re going to be tapering quantitative easing. Now they’ve done this before so we’ve got some history here. Quantitative easing is a relatively new phenomenon and it really started last cycle. But in 2010, 2011, they stopped QE2. So they basically halted the balance sheet growth right in after QE2, and that was in just about 2011. But oddly enough, what happened to the 10‐year Treasury yield? It actually went from about 3% and then it fell over the next several years and troughed around 1.5%. So counterintuitively in that example, reduction of the balance sheet expansion caused the 10 year to actually fall. Then we have another example here in 2013. At the end of that year, the Fed actually tapered quantitative easing, and what happened? The 10‐year Treasury yield peaked at about 3%, and then over the next several years was basically in a down trend to about 1.5%.

Matt Miskin:
So the last two times the Fed has either stopped, increased their balance sheet, or tapered their balance sheet, both of those examples saw the 10‐year Treasury yield fall. So why is this? Well, when we look back at those periods, what we’re seeing is that the Federal Reserve had already done a lot and the economy had already come back. But when we look at the leading economic indicators, so just kind of a proxy of how good the economic data was coming in, we were seeing that the economic data was peaking and starting to decelerate, meaning the best growth rate was behind us, the Fed had done all the stimulus, but then we were transitioning to another part of the cycle, one of a slower growth environment.

Matt Miskin:
And when we have a slower growth environment, investors typically gravitate to higher‐quality investments, which usually results in a flatter Treasury curve, it means that the 10‐year Treasury yield and longer data yields get a bid, meaning there’s more demand for them. And so what we’re seeing is it’s not really as much about the tapering; it’s more about the cycle. And when we look at the leading economic indicators today, they peaked in April, they’re decelerating. Now they’re still at a high level, we’re not seeing a recession on the horizon at this point, but as the LEI decelerates, leading economic indicators decelerate, it usually means the Treasury curve flattens. It means there’s a bid, or demand, for longer dated Treasury yields. So we believe actually that this time could be very similar and that you may not see upside pressure on yields, even though the Fed is buying less as it relates to quantitative easing.

John Bryson:
So that’s more on the demand side. Let’s also talk a little of the supply side, because one of the myths you talk around in the paper is about supply and a larger deficit. Can you dig into that for our audience?

Matt Miskin:
So one of the largest fears that we hear every day, and it’s a logical one, is we’ve got a massive deficit in the United States, and we are increasing our supply of Treasury bonds every year. And last year was one of the largest ever; increase wise, we almost added a trillion dollars. We did nearly four trillion dollars of Treasury debt issued in 2020, and it’s on pace to be massive again this year. But when we look back, so the government has been issuing debt for a long time, turns out. This isn’t a new phenomenon. We go back about 15 years, they were doing $700 billion, now they’re doing $4 trillion. So there’s been a massive ramp up in Treasury issuance, the whole last cycle, past the global financial crisis, we’ve been issuing debt pretty consistently.

Matt Miskin:
And we look back, okay, so we’re looking for periods where issuance of Treasury bonds creates higher yields. And we just do not see the connection. There’s been years where there’s been a huge issuance. Last year was a great example: 2020, we did four trillion. What did the 10‐year Treasury yield do? It dropped 1%. So even though all this supply came online, yields actually fell. So why is this? The reason to us, I think this quote is the one to really think about, “Debt is a tax on future growth.” So we’re issuing all this debt, we’re managing our way out of this pandemic recession, but what it does is it creates this hindrance to growth because you’re not able to buy new things, you’re not able to invest in the future, you’re paying for the past. And as you pay that interest, even though that interest is low, it’s a weight on growth.

Matt Miskin:
And when you have a weight on growth, oddly enough, it’s almost like a circular feedback loop. Lower growth profile means lower interest rates. And you keep doing this. In Japan, it’s a perfect example. They have issued a ton of debt and they’re not seeing any inflation, in fact, they’re just seeing very low yields. So it’s another very counterintuitive part of the bond market that more supply actually creates lower yields. But the key linchpin there is that it really creates a lower global growth profile, in general, and then actually creates more demand for bonds. And that’s why, even though there's more debt outstanding, yields have been compressed amid this environment.

John Bryson:
It’s fascinating thinking through the chess versus checkers approach here. You got to think through multiple layers and plan ahead, so this is great insight.

John Bryson:
So Emily, I want to talk about the final myth in the blog. You discuss another phenomenon that we’ve seen a lot over the last decade. Investors using equities to boost their income. What’s yours and Matt’s take here?

Emily Roland:
This one intuitively seems to make a lot of sense. So we often hear from investors that because the yield on fixed‐income assets is so low that it’s better to go to equities for income, and it is true. The yield on the [Bloomberg U.S. Aggregate Bond Index] or Agg is now at historical lows, it’s around 1.4%. Clearly, that’s limiting income potential. And this could make—you’re looking at the dividend yields on the S&P 500—and it can look pretty attractive at times on a relative basis. But you’ve got to look a little closer under the hood. So right now, the dividend yield on the S&P 500 is 1.27%, and that’s actually a bit less than the yield on the Agg.

Emily Roland:
The other thing to remember here is equities come with more risk than bonds. So while that dividend yield may look attractive, you’ve also got to look at the volatility profile of equities as well. And when we look at the three‐year standard deviation of the S&P 500, it’s around 18%, while the standard deviation on the Agg is about 5.4%. So that’s something that’s important to consider. When you make that move from bonds to stocks, you’re going to increase the volatility profile of your portfolio.

Emily Roland:
Now don’t get us wrong. We still view equities as a really important part of a portfolio. You want equities for that capital appreciation element to reach your investing goals, but think of it, as bonds playing the other critical half of a portfolio. You want to generate those dependable returns, you want to provide that ballast in periods of equity market volatility. So something to think about in terms of that decision, looking a bit further at the data and just remembering across all four of these myths that these beliefs and experiences, and now it's exacerbated by all of the financial media and Twitter, so there’s so much information coming. I know it’s a lot of noise. If you're watching the media or looking at Twitter, of course, we want you to pay attention if Matt and I are being featured there, but otherwise not. No, I’m just kidding. But there’s a lot of information out there that’s not always grounded in data and analysis. So we think it’s important to rethink some of those narratives and make sure that we’re actually doing the work to understand if they've been true over time.

John Bryson:
That's excellent. And Emily, you and Matt are two of the few that I do pay attention to on Twitter, so I encourage that. And your point, and I’ve heard you say this before, have your bonds act like bonds in a
portfolio that’s critical. And I know that our investment consultant team’s been out talking for a long time about have your equity act like equity and not have it be too sensitive to interest fluctuations, or at least understand those. And that kind of ties into your point here. So I think that’s really timely and really great takeaways for this blog that you create, this white paper or viewpoint. So when is it coming out and how can people access it and any of the other material, Emily, that I know you and Matt are pumping out great material.

Emily Roland:
So, John, you can access our blog on the website, jhinvestments.com in the Viewpoint section. It’s pretty easy to find. A lot of these themes we also examine in Market Intelligence, which is our quarterly flagship outlook on the markets and economy, which you talked about at the beginning today. The new version of Market Intelligence will be out on or around October 7. You can also find that on jhinvestments.com. On the top‐right there is an opportunity to click on Market Intelligence. We also, John, have a Weekly Market Recap that may be of interest where we explore these issues. We think about what’s driving markets over the course of the week, we preview the week ahead, all sorts of great resources that we're producing, and we hope helps in advisors businesses today.

John Bryson:
I’m glad you mentioned all those pieces. I pay attention to them all. It helps me personally cut through the clutter. I’ll read a lot of the things that everybody else reads, but your material, yours and Matt’s material, helps me cut through the clutter and get to the heart of it.

John Bryson:
So Matt and Emily, you’ve been great guests. I’ll always love having you on. Thank you for sharing and giving us a sneak peek to this new insights that you’re going to be putting out there. Folks, if you want to hear more of our podcast, please subscribe to Portfolio Intelligence on iTunes, or like Emily mentioned, visit our website, jhinvestments.com. You can get up to speed on our podcast and all of the great stuff that Matt and Emily and the rest of our network is producing around the market portfolio of construction techniques, business building ideas and a heck of a lot more. Everybody, thanks for listening to the show. Have a great day.