MoneyLife with Chuck Jaffe
Morgan Creek's Yusko Says to Invest in 'Uncomfortable Areas' Now
Why It Matters
Understanding why discomfort can signal hidden value helps investors navigate a choppy market and avoid herd‑mentalities. The episode’s focus on municipal bond ETFs offers a timely, tax‑advantaged strategy for investors looking to preserve capital while seeking yield, making it especially relevant as the U.S. tax filing deadline approaches.
Key Takeaways
- •Uncomfortable investments often yield better returns than familiar ones.
- •Municipal bond ETFs provide tax‑free yields near 3.5%.
- •Active management fees as low as 0.18% expense ratio.
- •Retirement planning emphasizes purpose, community, not just financial numbers.
- •Long‑term stock holding, like Amazon, rewards patient investors.
Pulse Analysis
Mark Yusko, CIO of Morgan Creek Capital, argues that the best opportunities lie where investors feel uncomfortable. He warns that when a trade feels too easy, the price is often already baked in, leading to modest gains or losses. By contrast, positions that require a hard pull‑the trigger amid uncertainty tend to deliver outsized returns once the market corrects. Yusko’s contrarian view resonates in today’s heightened volatility, reminding seasoned and novice investors alike to seek pain‑points rather than chase familiar, over‑hyped ideas. This mindset also aligns with his view on long‑term holdings like Amazon, which he still champions after decades.
The Goldman Sachs Municipal Income ETF (GMUB) offers a tax‑free yield around 3.5%, which translates to over 5% on a tax‑equivalent basis for many investors. Its active management team leverages decades of experience to navigate both primary and secondary muni markets, while keeping the expense ratio at a modest 0.18%. With roughly $250 million in assets, the fund is large enough for liquidity but still nimble, making it an attractive core‑plus addition for portfolios seeking stable, high‑quality fixed‑income exposure during tax season. Investors seeking tax efficiency often pair GMUB with corporate bond ETFs to diversify income sources.
Jamie Hopkins’ ‘Your Retirement Sketchbook’ breaks retirement planning into 125 bite‑sized lessons that prioritize purpose, community, and longevity over pure number‑crunching. The authors stress that a fulfilling retirement can span 30‑40 years, so investors must consider social engagement, legacy, and health alongside portfolio allocation. Research cited in the book shows community involvement is the top driver of longevity, reinforcing the idea that financial security alone isn’t enough. For pre‑retirees and recent retirees, the guide offers practical, digestible advice that bridges the gap between accumulation and living well in later life. The book also includes checklists and real‑world case studies to help readers implement the concepts immediately.
Episode Description
Mark Yusko, chief investment officer at Morgan Creek Capital Management, says global uncertainty "is at the highest level it has ever been," which is why investors have been leaning into quality and other factors they understand and are comfortable with, but he says value-oriented investors should be looking for less-traveled paths, searching for opportunities where they feel really uncomfortable "and where it's hard to pull the trigger." Yusko discusses ETFs in the Market Call, but also talks current events, noting that "Volatility is disagreement about future outcomes."
With the "ETF of the Week," Todd Rosenbluth, head of research at VettaFi, turns to an actively managed municipal bond fund as a tax-time diversion, but he notes that the low-cost fund with a solid tax-free yield deserves long-term consideration too.
Jamie Hopkins, co-author of "Your Retirement Sketchbook: 125 Retirement Planning Lessons from Financial Experts," discusses the new book, holes many people leave in their financial planning and how to take charge of the process and fill in the gaps.
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