#170 Bob Elliott: The Biggest Risk For Equity Investors Is The Economy Remains Too Strong

Bob Elliott, cofounder and CEO of Unlimited, which uses machine learning to create index replication ETFs of 2&20 style alternative investments like hedge funds, venture capital, and private equity, joins Julia La Roche on episode 170. In this episode, Elliott discusses the macro picture and highlights that the economy is in an income-driven expansion, where people are spending out of their income, leading to sustainable growth. However, this income dominance is creating challenges for the Federal Reserve, as inflation remains elevated and nominal growth is strong. Elliott believes that the Fed will continue to collect more information before making any significant policy changes.  He points out that assets are in an “air pocket” right now, and that the biggest risk for equity investors is the economy remains too strong, creating pressure on the bond market. He suggests that investors should consider holding more cash, allocate a portion to gold and commodities, and be cautious about stocks and bonds. Links: Twitter: https://twitter.com/BobEUnlimited YouTube: https://www.youtube.com/@BobEUnlimited Website: https://www.unlimitedfunds.com/ Timestamps: 00:00 Introduction and welcome Bob Elliott  01:15 Macro picture today + income-driven economic expansion  03:34 Different angles of looking at inflation  06:11 Fed's policy outlook 09:15 Implications of higher for longer  11:50 Long-end of the bond market is the critical driver of asset prices 14:47 The biggest risk for equity investors is the economy remains too strong that creates pressure on the bond market 16:00 Allocating in this setup  18:30 We’re in an 'air pocket’ right now  23:19 The Fed 25:50 Gold allocation and commodities  30:10 Parting thoughts  32:46 Confusion of the income-driven expansion 36:00 Recession