Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Speaker 1: Business Week with krol Messer and Tim Stenebek on Bloomberg Radio.
Speaker 2: Well, Emily, typically investing for retirement goes like this. When
Speaker 2: you're young and you have many years to work, you
Speaker 2: primarily own volatile assets like stocks. Only a small portion
Speaker 2: of your portfolio is bonds. Then as you get older
Speaker 2: your portfolio grows, that allocation changes, and when you get
Speaker 2: close to retirement a lot more of your portfolio is bonds.
Speaker 2: Then it's stocks. That's the conventional wisdom. But our next
Speaker 2: guest says that's not enough for today. Salkapezi is executive
Speaker 2: vice president at Dunham Dunham in Associates Investment Council. He
Speaker 2: joins us here in the Bloomberg Interactive Brokers Studio. We
Speaker 2: talk a lot about the idea of conventional wisdom for
Speaker 2: retirement being broken. But what specifically do you see not
Speaker 2: working today and why?
Speaker 3: Well, it's what we called the retirement in investment paradox, right,
Speaker 3: and it's exactly what you just described. So when I
Speaker 3: came into this business, our asset allocation was basically what
Speaker 3: they called an age based allocation. Here's how it worked.
Speaker 3: If I was twenty years old, I had a client
Speaker 3: twenty years old, that means I put them twenty percent
Speaker 3: in bonds eighty percent in stocks. That sounds they got older, right, Yeah,
Speaker 3: So are at thirty years old now they have thirty
Speaker 3: percent in bonds. By the time they hit age sixty five,
Speaker 3: they would be sixty five percent in bonds thirty five
Speaker 3: percent in stocks. And that worked for us because there
Speaker 3: was one risk that we were trying to mitigate, and
Speaker 3: that was sequence risk. What we didn't want was for
Speaker 3: them to hit retirement in a bad market and suddenly
Speaker 3: find that their entire retirement portfolio basically was blown apart.
Speaker 3: So that's all we were concerned about because at age
Speaker 3: sixty five back then, we knew they had maybe ten
Speaker 3: to twenty years left in retirement. Today ten twenty years
Speaker 3: before they died, correct before they write before they passed away.
Speaker 3: So what we're seeing today is a little bit different
Speaker 3: because what we're seeing today is there are three major risks.
Speaker 3: There's inflation, there's the fact that we're living longer, and
Speaker 3: their sequence risk, and a financial advisor now has to
Speaker 3: balance those type of those risks. Back in the late nineties,
Speaker 3: there was a major Boston asset management company by the
Speaker 3: Great Big Dick for your new listeners out in Boston,
Speaker 3: and they had a big billboard. As you were sitting
Speaker 3: through traffic, you're watching this billboard and what it said
Speaker 3: was that the first person to live to be one
Speaker 3: hundred and fifty years old is alive today.
Speaker 1: It is.
Speaker 3: It's not a common right now where we know that
Speaker 3: there are people that are over one hundred years old.
Speaker 3: I know three different people that are now over just
Speaker 3: one hundred years old.
Speaker 2: My grandma turns one hundred and two next month and
Speaker 2: I just visited her over the weekend and she's doing fine, right,
Speaker 2: I mean she's one hundred and two. Yeah, she's still
Speaker 2: she still definitely has some of her snappyness.
Speaker 4: Does your own crypto and leverage video?
Speaker 2: No, none of that going on.
Speaker 4: So where do you where do you focus now? Is
Speaker 4: this a change because of this paradox? Is this a
Speaker 4: change that like young people are adding more risk assets
Speaker 4: or you're focusing more on that sixty five and up
Speaker 4: age group and changing that portfolio.
Speaker 3: It's the sixty five on up because that's where we
Speaker 3: have the paradox. Because if we're livid logger. Right, how
Speaker 3: do you what you needed your portfolio was growth? Right?
Speaker 3: Stocks tend to give us growth if you try to
Speaker 3: battle inflation. Right, And even if the FED hits its
Speaker 3: two percent target, the compounding effect of two percent inflation
Speaker 3: for you know someone who's one hundred and two years old, right,
Speaker 3: What it basically means is that that if I retired, Right,
Speaker 3: I'm sixty five, and I go to the supermarket, and
Speaker 3: there are twenty five items that I purchase, right, and
Speaker 3: I purchase those same items. So it's bread, it's milk,
Speaker 3: it's vegetables, it's fruit. I purchased the same items every
Speaker 3: single week at a two percent inflation. By the time
Speaker 3: I forty years later, right, I have to take thirteen
Speaker 3: of those items out of my basket and leave them
Speaker 3: at the supermarket, leaving what just eleven or spending a
Speaker 3: lot more. Right. And so the paradox is what, so
Speaker 3: what is the asset class that is best to handle inflation? Well,
Speaker 3: it's equities, right, It's great job over the years of
Speaker 3: combatied inflation. But what is the one thing if you
Speaker 3: take a look at sequence risk? Right, and this is
Speaker 3: the paradox. What causes sequence risk. It's if you live
Speaker 3: too long equities.
Speaker 2: And if you are in a portfolio where there's a
Speaker 2: lot of volatility, your part portfolio can go down for
Speaker 2: a number of years and you don't have that money.
Speaker 3: Correct SOT And if you go and if you tried
Speaker 3: to combat sequence risk, what do you do? Then you
Speaker 3: look at less viol so you do bonds you do
Speaker 3: or do what ease? You might do bucket strategies, right,
Speaker 3: but if it's too conservative, now you don't have the
Speaker 3: growth to combat the inflation and livy longer. That's the
Speaker 3: paradox that that we're facing.
Speaker 2: So what's the answer here? And also just are we
Speaker 2: doing it wrong with these target date funds because a
Speaker 2: lot of times, you know, we don't have many options
Speaker 2: when it comes to investing in retire for retirement. When
Speaker 2: you have a four to one K with a company,
Speaker 2: for example, throw it into target date fund. These things
Speaker 2: are made for catered for a certain age, right.
Speaker 3: And the question we have to ask ourselves, and we
Speaker 3: ask ourselves this question at DOT them is are those
Speaker 3: the right investments going forward? So if we are going
Speaker 3: to be living longer, right, then is that the right strategy?
Speaker 3: Do we really want to be in bonds at the end,
Speaker 3: or do we as an industry have a responsibility to
Speaker 3: find new type of investments, a new type of overlays
Speaker 3: that we might be able to have that can combat
Speaker 3: sequence risk and perhaps give growth.
Speaker 2: What are some of the options that are out there?
Speaker 2: So at DOUTA we have an option there.
Speaker 3: So this is something that we've been working on, right,
Speaker 3: this is something that we've been working on for a
Speaker 3: number of years now in terms of retirees of this
Speaker 3: concept that we need to be thinking differently. So we
Speaker 3: have a strategy where basically we're buying fear and selling greed.
Speaker 1: Right.
Speaker 3: So it's inspired by Warren Buffett, right, the famous quote
Speaker 3: be fearful when others are greedy, be greedy when others
Speaker 3: are fearful. Right. So what we're basically doing is we're
Speaker 3: taking a look at at the price of equities. Right.
Speaker 3: As prices go higher and as investors are willing to
Speaker 3: pay more, we based on an algorithm. It's math, right,
Speaker 3: it's math at time. Right, As as they're willing to
Speaker 3: pay more, we are selling them the equities when the
Speaker 3: when the market starts to turn and I should stop
Speaker 3: hitting that microphone, I guess so, so when the markets
Speaker 3: turned right, then then and and and and people start
Speaker 3: panicking and they're selling equities at lower prices. Then we're buying.
Speaker 3: But here's the key. What that means is this. That
Speaker 3: means at the top of the mar you own less equities.
Speaker 3: At the bottom of the market, you have more equities.
Speaker 3: So what you're attempting to do, what you potentially could accomplish,
Speaker 3: is mitigating that sequence risk, but at the same time
Speaker 3: you now have the growth.
Speaker 2: But timing the market, we're told is a fool's errand
Speaker 2: how do you do it?
Speaker 3: So we're not tiping the market. We're simply looking at
Speaker 3: the price of the market. We're not trying to pick
Speaker 3: the top, we're not trying to pick the bottom.
Speaker 2: But you're preparing a portfolio to react to situations that
Speaker 2: include the top and the bottom.
Speaker 3: Yes, so a little bit different, right. So Number one,
Speaker 3: it's an overlay. So we have our asset allocation program
Speaker 3: that's been doing this for almost forty years, right, So
Speaker 3: this is simply an overlay that we placed over our
Speaker 3: regular portfolios that we manage specifically for retirees, just to
Speaker 3: help them in this sequence risk and this growth that
Speaker 3: they need. So we're not trying to protect anything. It's
Speaker 3: simply math. Right, So hypothetically right, this is not how
Speaker 3: it works. But you could say, ver tide the market
Speaker 3: moves five percent higher, we're gonna sell, right because we
Speaker 3: can get a better price. Ver Tide the market dips, right,
Speaker 3: and it dips by five percent, will will purchase equities. Right.
Speaker 3: It's a little more complicated than that the overall algorithm,
Speaker 3: but it's not much more complicated. We're not using AI,
Speaker 3: we're not taking forty two different factors into account. It's
Speaker 3: simply math.
Speaker 4: We only have about a minute left. But in your opinion,
Speaker 4: what's the best place to get income from? Because that's
Speaker 4: been such a hot theme in the last few years,
Speaker 4: and I know that retirees like to have an income stream.
Speaker 3: So the so equities provide it. Started markets a to
Speaker 3: prevent this amount of income through there evidens, But clearly
Speaker 3: right now bonds are a place to receive income.
Speaker 1: Right.
Speaker 3: The problem is that is going to start vanishet in
Speaker 3: a couple of weeks as the VET starts lowering rates,
Speaker 3: we're going to be back to that market again. And
Speaker 3: that's why at Dunham what we do is we take
Speaker 3: a look at retirement and we try to create for
Speaker 3: our financial advisors that we work with, we try to
Speaker 3: create a process for them to be able to accomplish
Speaker 3: the income that they that the client needs, but also
Speaker 3: to be able to work hand in hand to get
Speaker 3: that growth, and we do that through this algorithm.
Speaker 2: Very interesting stuff, soal thanks.
Speaker 1: For joining us.
Speaker 3: It's my pleasure. Thank you for having me.
Speaker 2: Salkapezi, Executive vice president at Dunham and Associates Investment Council,
Speaker 2: joining us here in the Bloomberg Interactive Brokers studio.
Speaker 3: When we talk about.
Speaker 2: Fertility, IVF, i UI, it's a really hot button issue
Speaker 2: in politics right now, but some and people have different
Speaker 2: views on how they look at it, and a lot
Speaker 2: of people in different parts of the country have different
Speaker 2: views on it. But you can't argue with the way
Speaker 2: things are going and the stats out there. According to
Speaker 2: the American Society for Reproductive Medicine, the number of babies
Speaker 2: born from IVF increased in twenty twenty two to ninety
Speaker 2: one thousand, seven hundred and seventy one. That's up from
Speaker 2: eighty nine thousand, two hundred and eight in twenty twenty one.
Speaker 2: In other words, according to the ASRM, two point five
Speaker 2: percent of all berths in the US that year were
Speaker 2: the result of successful assisted reproductive technology cycles. Somebody who
Speaker 2: watched this closely as Shelley McConnell, chief strategy officer at
Speaker 2: Win Fertility. It's a company that works on family building,
Speaker 2: they work on IVF, IUI, and they provide support around
Speaker 2: those things and full disclosure, I believe it is a
Speaker 2: company that Bloomberg uses in its benefits. Shelley joins us
Speaker 2: from Greenwich, Connecticut. Shelly, good to have you with us.
Speaker 5: How are you hi, Thank you for having me. I'm
Speaker 5: happy to be here.
Speaker 2: Well, thanks for joining us. It's interesting to see these
Speaker 2: numbers because I'll be honest with you, ninety one thousand
Speaker 2: berths from IVF or IUI. That seems low. I think
Speaker 2: if you live in a city and you're of a
Speaker 2: certain age, a lot of people you know have gone
Speaker 2: through IVF for IUI or other assisted fertility. I'm wondering
Speaker 2: from your perspective, why you think it's grown so much
Speaker 2: in such a short time. Is it because we're all
Speaker 2: having kids when we're older.
Speaker 5: Now, that's one of the factors, but it's not all
Speaker 5: of the factors. In fact, when it comes to infertility
Speaker 5: and pregnancy loss. Historically, women have held the stigma and
Speaker 5: the burden, the financial burden, the mental burden, the physical
Speaker 5: burden of treatments and testing and monitoring. But what we
Speaker 5: know now is that male reproductive health contributes to infertility
Speaker 5: as much as female reproductive health. So men and women
Speaker 5: fertility does decrease as we age, but that is not
Speaker 5: the only factor. There are a lot of environmental factors
Speaker 5: and undetermined factors as well.
Speaker 4: What is WIND doing when it comes to these male
Speaker 4: fertility treatments, Because I agree with you, you don't really
Speaker 4: hear that much about the treatments that men can undergo
Speaker 4: for infertility, right, Yes, it's.
Speaker 5: Very important for men early and comprehensively to be tested.
Speaker 5: Anything that can interrupt their hormone levels can impact their fertility.
Speaker 5: So in some cases there are actual procedures to help.
Speaker 5: In other cases they are medical interventions, and in some
Speaker 5: cases there are drug protocols that can help.
Speaker 2: It's so interesting when when you hear about the idea
Speaker 2: of reproductive techniques, you hear a lot about egg freezing.
Speaker 2: What I have not heard about is sperm freezing. And
Speaker 2: I know thanks to our producer Paul Brennan, who sent
Speaker 2: us some notes ahead of time that about a third
Speaker 2: of your clients are offering elective sperm freezing services. That's right,
Speaker 2: talk a little bit about that.
Speaker 5: Sure, you know. We're actually seeing this increase in popularity
Speaker 5: from a few perspectives. One is some acknowledgement that male
Speaker 5: reproductive health and fertility does decrease over time, and so
Speaker 5: having sperm preserved is something that's becoming a little more popular,
Speaker 5: although not nearly, as it's not experiencing nearly the boom
Speaker 5: that egg freezing has been experiencing. The second is that
Speaker 5: often when someone is about to undergo a medical treatment
Speaker 5: that would negatively and significantly compromise their fertility, they choose
Speaker 5: to preserve sperm for future use. An example would be
Speaker 5: certain cancer treatments where they will likely be rendered and
Speaker 5: fertile as a result, they may preserve it for future use.
Speaker 5: And the third would be anyone who would be going
Speaker 5: through gender reassignment should be offered the opportunity to preserve
Speaker 5: egg or sperm prior to undergoing ormone treatment.
Speaker 4: So the sperm freezing is that cheaper than egg freezing.
Speaker 5: Yes, it is much cheaper than egg freezing. Egg freezing
Speaker 5: might be ten to fifteen thousand dollars. That can depend
Speaker 5: on where you are geographically and how successful the cycles are.
Speaker 5: For men, all in it is is maybe seven hundred
Speaker 5: and two one thousand dollars.
Speaker 4: What do we know so far about the success rate
Speaker 4: in that kind of procedure, because with egg freezing it
Speaker 4: doesn't always work.
Speaker 5: No, that's true. And for men, collection of sperm is
Speaker 5: much more straightforward and much easier, and so that is
Speaker 5: that tends to be more successful. What we would have
Speaker 5: concerns about it's not just the quantity but the quality
Speaker 5: of the sperm. And so we know that in mail infertility,
Speaker 5: both the quantity and quality of the sperm are impacting fertility,
Speaker 5: and so making sure that the quality of the sperm
Speaker 5: is very good and has minimal a fragmentation and other
Speaker 5: things that can negatively impact fertility and pregnancy loss.
Speaker 2: I'm wondering about Shelley, the idea of low testoster and
Speaker 2: how from your position at wind Fertility you're looking at
Speaker 2: this phenomenon that we're seeing.
Speaker 5: Yes, significant male testosterone levels typically drop off annually from
Speaker 5: age thirty and above, and can do so quite significantly
Speaker 5: from the age fifty and up. About twenty five percent
Speaker 5: of men report adverse symptoms associated with the decrease in
Speaker 5: testosterone and what is called Andrew pause, and very many
Speaker 5: report that it impacts their work and their ability to
Speaker 5: perform their work functions. So it actually is something that
Speaker 5: has not been well publicized or discussed to the extent
Speaker 5: that it should be, but has a significant impact on
Speaker 5: male health.
Speaker 1: Is Bloomberg Business Week with Carol Messer and Tim Stenebeck
Speaker 1: on Bloomberg Radio and Television.
Speaker 2: It is Bloomberg Business Week. Let's get back to our
Speaker 2: conversation with Shelley McConnell, chief strategy officer at Wind Fertility,
Speaker 2: joining us from Connecticut. Shelley, Emily and I were talking
Speaker 2: and you mentioned something in our previous conversation that really
Speaker 2: piqued our interests.
Speaker 4: Yeah, so you had said that there were certain environmental
Speaker 4: factors that impact male infertility. Go into some detail on that,
Speaker 4: name a couple of those factors and what people should
Speaker 4: be watching out for.
Speaker 5: Well, there are certainly kind of the age old things
Speaker 5: that we know about, particularly around temperature and keeping cools.
Speaker 5: Some things like boxer shorts are preferred over briefs, but
Speaker 5: men who exercise excessively, which some do can sometimes elevate
Speaker 5: temperature and have a negative impact on sperm. But there
Speaker 5: are also environmental factors like microplastics that are believed to
Speaker 5: have an impact. Anything that could disrupt hormones will will
Speaker 5: impact sperm production again, quality and quantity. So things like
Speaker 5: the rise in insulin resistance in our population, as you
Speaker 5: can see in pre diabetes and diabetes going up so much,
Speaker 5: particularly in our younger generations, that can have an impact
Speaker 5: on fertility. Any endocrine disrupting chemicals in the environment can
Speaker 5: also do so. Microplastics are everywhere.
Speaker 2: Yeah, that's well, that's what I was going to ask you.
Speaker 2: It's it's so interesting to hear you talk about this
Speaker 2: because this is not something this is relatively relatively new phenomenon.
Speaker 2: I mean, we used to like microplastics. You know, there
Speaker 2: used to be soaps I think that had microplastics in
Speaker 2: them just so they'd have like abrasive qualities and those
Speaker 2: that would obviously get into the the sewer systems, like
Speaker 2: pretty terrible stuff in hindsight, in retrospect, what should people
Speaker 2: be doing to to mitigate somebody? This stuff is everywhere.
Speaker 5: This stuff is everywhere. And I was reading recently about
Speaker 5: a study where they were trying to impact to assess
Speaker 5: the impact of microplastics on male reproductive organs, and they
Speaker 5: couldn't establish a control group. They could not establish a
Speaker 5: group that did not have the presence of microplastics. So
Speaker 5: I think there is some about being careful of your environment,
Speaker 5: but there are things that we all can control more
Speaker 5: around healthy diets, healthy living, stress, maintaining reducing sugar to
Speaker 5: not impact your insulin levels, and so forth. Those are
Speaker 5: things that you can control, and we would suggest, as
Speaker 5: I mentioned, that if you're going through this process, for
Speaker 5: all men to be tested early and comprehensively so that
Speaker 5: they could potentially be treated. Another factor is that people
Speaker 5: don't always have access to urologists. Sixty percent of counties
Speaker 5: in the US have no urologists, and more than ninety
Speaker 5: percent of urologists are practicing in metropolity.
Speaker 2: You say, what percent of counties in sixty counties in
Speaker 2: the US don't have eurologists percent of counties sixty percent?
Speaker 1: Oh my god.
Speaker 5: Yes, So sometimes virtual care is very part. They're very
Speaker 5: concentrated in the metropolitan areas. Tim That maybe goes a
Speaker 5: little bit to what you were mentioning. At the beginning,
Speaker 5: but having access to virtual care, it can be very
Speaker 5: important for people to be able to access urology and urologists.
Speaker 2: Is our fertility benefits seen as baseline these days.
Speaker 5: Yes, very much so. It's an expectation of employees and
Speaker 5: for the most part, employers have agreed, although the fact
Speaker 5: that the figures can vary, but somewhere between forty and
Speaker 5: above fifty percent of employers offer fertility benefits in some capacity,
Speaker 5: and I expect that that will be much higher in
Speaker 5: the very near future. It is it's a business imperative,
Speaker 5: it's an expectation from an employee recruiting and retention standpoint.
Speaker 2: Hey, I mentioned politics at the top of our interview.
Speaker 2: There was a you know, the there was a February
Speaker 2: sixteenth decision that meant anyone who destroyed embryos could be
Speaker 2: liable for wrongful death. And this is in Alabama. They
Speaker 2: passed a lot of protect IVF treatments after this embryo ruling.
Speaker 2: How do you watch what's happening politically now in your industry, Well.
Speaker 5: We watch it very closely. It's impossible to predict what
Speaker 5: is going to happen. In a lot of places. We
Speaker 5: are short on details as to what is being proposed
Speaker 5: and what may occur. Nonetheless, the elevated visibility of this
Speaker 5: topic across both parties and both campaigns points to the
Speaker 5: fact that this is so important for people to have
Speaker 5: access to these treatments. We continue to watch and we
Speaker 5: would suggest that businesses offer comprehensive benefits that include independent
Speaker 5: clinical guidance for people. This is a very complex clinical experience,
Speaker 5: but it also is a complex legislative environment, and understanding
Speaker 5: and having someone who can help guide you through this
Speaker 5: process is what is helping so many people through and
Speaker 5: to the other end of success.
Speaker 2: Shelley, thanks so much for joining us on Bloomberg Business Week.
Speaker 2: Shelley McConnell is Chief Strategy Officer at Win Fertility. They
Speaker 2: do family building and family well being benefits for companies,
Speaker 2: including full disclosure here at Bloomberg