🎙️ The Family Office

The charts below say a lot. First up: Slower rate cut cycles tend to be bullish for stocks.

Second, we examine what draws employees to new jobs. Usually, it’s work-life balance, well-being, and finding roles that bring out the best in people.

What do you value most in your career? Let us know by replying directly to this email.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• The next big career track

• How markets affect our mood

This, and more, in just 5 minutes to read.

Chart(s) of the Day

Together With Money

What Type of Pet Insurance Do You Need?

Accident & illness policies, accident coverage, and wellness riders all offer varying degrees of protection.

Which one do you need? View our list of the Best Pet Insurance providers to find the best fit for you.

In The News

💼 The Next Big Career Track at Business School: Family Offices

There’s a new career track on the block. Business schools are racing to launch family office programs as the sector booms. 

The University of Chicago Booth School of Business launched its “Family Office Initiative,” mirroring similar programs at Harvard, Columbia, Northwestern, and Pepperdine, among others.

What to know: Family offices — private wealth management advisory firms that serve ultra-high-net-worth individuals — have grown from 6,000 in 2019 to over 8,000 today. Assets are expected to reach $5.4 trillion by 2030, up from $3.1 trillion today. 

As family offices struggle to find talented investors, accountants, lawyers, and estate planners, there’s a demand for people educated in the space.

Key developments: Booth's program includes research, courses, and summits guided by 50 family office leaders. A new MBA course called "The Family Office" will launch next year. 

• Noted one family office founder: "If you think of the family office market, the amount of capital overseen, and the importance of family offices commercially, in investing and philanthropy, the growth has been significant…The challenges they face have only grown.”
  

• Chicago’s Booth is teaming up with software firms that provide back-office platforms for family offices to receive anonymized, aggregated portfolio data. “That’s real data, not filtered opinions about what people are doing,” a Booth finance professor told CNBC.

Why it matters:

CNBC reported that as “more wealthy alumni launch family offices or work for one, they’re becoming an important pipeline of donors and funding. Trust companies, private banks, and consulting firms eager to have family office clients are also potential sponsors for the programs.”

Interestingly, many programs focus less on quantitative skills and tactical investing strategies. Rather, they’re honing in on teaching professionals how to navigate relationships with families and assist in decision-making. 

The co-founder added: "It was surprising to us that the No. 1 issue wasn't investing or risk management. It was about the human dynamics."

The family office career track is expected to continue humming, especially as more Americans get wealthier and wealthier thanks to soaring asset prices.

Read more

More Headlines

📈 Why Nvidia stock soared to another fresh record 

😔 The reason many workers feel lonely no matter where they work

🎓 Applications to MBA programs in the U.S. soar

📉 Clipped wings: Boeing just reported a $6 billion quarterly loss

🤓 The Intelligent Investor at 75: A new perspective on Ben Graham’s message

💊 Walmart’s new threat to CVS: 30-minute prescription deliveries

👂 Apple’s AirPods Pro 2 will soon work as a hearing aid

💡 How Markets Affect Our Mood

Markets might play with our moods more than we think, especially during downturns.

In what is not exactly a shocking revelation, a falling stock market coincides with a rise in the number of antidepressant prescriptions. 

• “Our findings suggest that as the stock market declines, more people experience stress and anxiety, leading to an increase in prescriptions for antidepressants,” an assistant professor at Ball State University’s Miller College of Business and one of the paper’s co-authors told The Wall Street Journal. 

Rising sensitivity: Researchers controlled for other factors, such as unemployment rates or the season, finding that investors aged 46 to 55 were more likely to get antidepressants when stocks fell. 

• “People in this age group may be more sensitive to changes in their portfolio compared with a younger cohort, who are further from retirement, and older cohorts who may own fewer stocks and more bonds since they are nearing retirement,” said another study co-author. 

What to know: You really start to see how drastic bear markets weigh on investors’ mental health when you look at periods like the 2008 stock market crash, which led to a 6.2 percentage point (35%) increase in antidepressant use among wealthier stockholders.

The trend is similar regarding psychotherapy during periods of falling stock prices. When stocks fell by about 12.8% over two weeks, the number of psychotherapy visits billed to insurance providers increased slightly. 

Researchers also found a correlation between falling stock prices and illnesses such as depression, insomnia, peptic ulcer, abdominal pain, substance abuse, and myocardial infarction. 

That varies from better market times, like the current period: The researchers didn’t find any statistical relationship between rising stock prices and the number of antidepressant prescriptions. 

Why it matters:

Two quotes from investing legends related to this study come to mind:

Warren Buffett: "The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd."

Peter Lynch: "The most important organ in investing is not the brain, it's the stomach."

Just be aware: The asymmetric nature of the market’s effect on our moods suggests that the psychological toll of bear markets may outweigh any positive mental health benefits from bull markets. In other words, the sting of falling stocks often outweighs the joy of a rising market. 

It’s cliche and almost overly simplistic, but the researchers conclude that one practical implication of the study “is that investors should be aware of their emotional state when the market dips before they make investment decisions.”

Read more

Sponsored by FNRP

Diversify Your Assets with CRE

FNRP is your bridge to passive commercial real estate investing.

Enjoy lower volatility, tax advantages, and fully managed real estate investing. See how. Invest in professionally vetted, fully-managed, institutional-quality real estate deals.

Quick Poll

On Monday, we asked: Do you use an investing checklist? Why or why not?

— Less than half of investors surveyed said they use an investing checklist. Wrote one user: “Learnings must be accumulated. And my everelonging list does it for me.”

— On the other end: “I’m not sure how accurate checklists are because sometimes they ask for a lot of information that isn’t necessary.” Another said they don’t because “I find I'm always second-guessing myself.”

See you next time!

That's it for today on We Study Markets!

Enjoy reading this newsletter? Forward it to a friend.

Was this newsletter forwarded to you? Sign up here.

Use the promo code STOCKS15 at checkout for 15% off our popular course “How To Get Started With Stocks.”

Advertise with us.

Follow us on Twitter.

Keep an eye on your inbox for our newsletters on weekdays around 6pm EST and on weekends. If you have any feedback for us, simply respond to this email.

You can also leave your comments/suggestions/feedback anonymously here.