Markus and Justin explore AI in financial planning, the hype around alternatives, brand cycles, and the price of gold.

Just Some Musings 3.10
From Japan to Huntington Beach, Markus and Justin explore AI in financial planning, the hype around alternatives, brand cycles, and the price of gold.
NavigationMuhs Wealth Partners

Regular mutual fund firms have scaled back their marketing spend, while private investment managers have stepped in to fill the gap. It’s not hard to see why: fund company margins are shrinking as assets shift to lower-fee index funds, even within the same fund company. “Private” is the new frontier—opaque, exclusive, and (for now) lucrative.

But enthusiasm isn’t the same as prudence. Pension plans may hold large allocations to private assets, but they have structural advantages (size, time horizon, liquidity access) that individual investors simply don’t.

One major Canadian bank has reportedly targeted 25–35% of client portfolios in privates—a number Markus and Justin both find excessive. When everyone starts chasing the same “uncorrelated” assets, the illiquidity premium disappears. And if the crowd moves in, those private valuations will start behaving suspiciously like public ones.

It was also noted that many of these products’ touted stability is more a function of infrequent and imperfect pricing than genuine low volatility—a phenomenon some have dubbed “volatility laundering.” If you only mark your assets once a month (or quarter), you don’t see the volatility—but it’s still there.