News

Thought Leadership Series: Long-Term Care Planning

May 8th, 2024

First Long Island Investors, LLC was honored to host Natalie Karp, Founding Partner of Karp Loshak Long Term Care Insurance Solutions Brokerage, Inc., at the Garden City Hotel on May 8th for our semi-annual FLI Thought Leadership Breakfast. Karp Loshak, founded in 2008, serves as an independent broker affiliated with the leading Long-Term Care (LTC) Insurance carriers.  The firm is highly respected for their educational and consultative approach, which has been recognized as a resource by the Wall Street Journal and Newsday for their expertise on LTC insurance.

The conversation began with Natalie providing an overview of the current LTC landscape, emphasizing the escalating costs of care and the importance of proactively evaluating LTC insurance options.  She positioned LTC insurance as a crucial financial planning tool designed to mitigate the exorbitant expenses associated with LTC and highlighted the diverse range of LTC insurance solutions available.

Natalie noted that LTC insurance is often overlooked because people are reluctant to confront the possibility of future care needs.  However, ignoring this reality can lead to significant financial and emotional strain.  She cited the high and rising cost of care and that the typical LTC need spans three years, which makes the need for LTC insurance more critical as life expectancies continue to increase.  As a general guideline, Natalie mentioned that approximately 70% of individuals aged 70 years and older, and 80% of those reaching age 80, will require some level of LTC at some point.

FLI emphasizes the importance of considering LTC insurance for, quality of life, tax planning and estate preservation for suitable clients.  LTC insurance provides tax-free benefits, helping preserve income and assets that would otherwise be depleted by care costs.  Without LTC insurance, income reallocation or asset liquidation may trigger income taxes.  Additionally, potential payroll tax implications loom, as nearly 30% of states have proposed imposing new mandatory payroll taxes on those who do not have private LTC coverage in order to fund the LTC burden on Medicaid.  LTC premiums may be tax deductible for individuals, and corporations can benefit from tax advantages by paying premiums on behalf of employees.

The FLI Thought Leadership Breakfast series aims to provide our clients with access to industry thought leaders and experts who can provide valuable insights to help them make informed financial decisions. We were pleased to feature Natalie Karp as our guest speaker and remain committed to providing this level of expertise through future events.  If you or your family have an interest in Long-Term Care Insurance, please do not hesitate to reach out to any of us here at FLI.

1st Quarter 2024 Letter to Investors

March 31st, 2024

“Invest for the long haul.  Don’t get too greedy and don’t get too scared.”

– Shelby M.C. Davis

The first quarter resulted in strong absolute returns for our defensive and traditional equity strategies. Most strategies have exceeded their respective benchmarks year-to-date. This follows a significant bounce back in 2023 in the wake of a very difficult 2022 for equity and fixed income markets.  In fact, several of our strategies have exceeded the prior peak at year-end 2021, which reflected several years of large gains.  So, when one invests for the long haul, as the above quote states, they should be rewarded when the emotions of greed or fear do not prevail.  There is one exception, fixed income, which was about flat for the first quarter including interest, following 2023 where results were modestly higher, and 2022 when losses were incurred.

Early on, the first quarter continued to be led by a small number of large-cap growth companies, such that the Russell 1000 Growth Index outperformed the rival Russell 1000 Value Index.  This can mostly be attributed to the disruption of artificial intelligence (AI) and its role in many growth companies.  In addition, international investing, while positive, also underperformed its rival S&P 500 Index.  We believe these positive results, led by growth companies, reflect reduced inflation, higher earnings, few prospects for recession, and a Fed that most recently indicated three interest rate cuts were being considered later in the year.  Of note, in the past several weeks, we witnessed a broadening out of stocks achieving 52-week highs, many of which were outside the large-cap, technology-oriented companies.  We are watching valuation very carefully, especially for the largest technology-oriented companies, where even the reference to AI has led to share price gains.

The following charts reinforce our view that there is some broadening out of the markets, inflation is trending down (although not yet at a level sought by the Fed), earnings growth estimates for the average large company (S&P 500 Index) continues to be positive for 2024, and employment (not pictured) continues to reflect a strong, although slowing, economy (not one headed for recession in 2024).


As the charts suggest from our consultant, Strategas Research Partners, the performance in the first quarter “rarely” suggests a market top.

It appears, for now, that the economy can constructively deal with the yield on the 10-year U.S. Treasury being in a range of 3.75% to 4.75% and inflation that has dropped to 2.8% for the core PCE (the Fed’s preferred inflation measure) while unemployment remains below 4% and GDP growth is forecasted to be approximately 2%.  These factors contribute to the projected growth in corporate earnings and our belief that we will continue to grow our clients’ wealth, with a prudent asset allocation, over the course of this year.  Anecdotally, our contacts in the real estate industry have also indicated that financial conditions in real-estate financing have finally improved.  A note of optimism.

So, what can go wrong?

With two wars raging and a presidential-election year unfolding, we cannot afford to be complacent.  The Middle Eastern war between Israel and Hamas (a proxy for Iran) could result in an escalation of hostilities.  Already, the Houthis (another Iranian proxy) are attacking ships in the Red Sea, causing some havoc with global trade.  This could result in an upturn in inflation.  Of course, a growing conflict in the region with another Iranian proxy, Hezbollah in Lebanon, is simmering.  Also, there is no end in sight to the war between Russia and Ukraine.  American policy is being challenged politically in the case of both wars as well as the potential cost to the American taxpayer.  Fortunately, these events have not been disruptive to our financial markets thus far.

The heating up of our domestic political environment is another concern.  Illegal immigration across our southern border has reached a crisis.  The influx of immigrants to sanctuary cities and elsewhere is also causing an economic strain.  Immigration, crime, proposed major tax increases by the current administration, and women’s reproductive rights are all major issues that will be debated as the year goes on.  This, of course, is on top of the embedded inflation that Americans are faced with despite the rate of inflation abating.  Additionally, the collapse of the Francis Scott Key bridge in Baltimore could have a minor inflationary impact.

Historically, equity markets have performed reasonably well in the fourth year of a presidential term.  To help that result, incumbent administrations have at their disposal the power to spend.  In this year’s case, the President has the CHIPS and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act at his disposal to help the economy along.  Again, we have said, both last year and this year in our thought pieces that we do not see the prospects of a recession occurring during this election year.  This is a positive, to be weighed along with the uncertainty of two presumptive nominees who, according to the polls, a majority of Americans view as unfavorable. 

Summary

We are off to a very good start, which historically has resulted in good results for the year, but there are many moving parts domestically and a significant level of geopolitical uncertainty.  Some level of optimism is based on the Fed reducing rates at some point during the year.  If inflation does not continue to abate and the Fed does an about face, that would not be good for equity, fixed income, or real-estate markets.  The same could be said, in our opinion, as it relates to private equity.

We remain cautiously optimistic given the propensity of what we have described above.  However, we remain true to our cautious nature while still working to grow our clients’ wealth through an individualized, prudent asset allocation.  One that reflects a broadening of company participants in the equity markets’ rise, that includes owning both value and growth-oriented companies (which continue to play a major role in stock market advances), and that does not just rely on AI (which we believe is positive and

disruptive).  Fixed income, on a pre-inflation, pre-tax basis, will continue to play some role in our asset allocations for clients, but a mix of defensive and traditional equity investments will be the major allocations for most clients.

Enjoy the spring season!  Please call upon us for any and all of your wealth management needs.  Stay tuned as we see what evolves with both the President’s attempt to increase income and estate taxes as well as the sunsetting of the Trump tax cuts over the next two years.

Best regards,

Robert D. Rosenthal

Chairman, Chief Executive Officer, and Chief Investment Officer

DISCLAIMERS

The views expressed herein are those of Robert D. Rosenthal or First Long Island Investors, LLC (“FLI”), are for informational purposes, and are based on facts, assumptions, and understandings as of April 25, 2024 (the “Publication Date”).  This information is subject to change at any time based on market and other conditions.  This communication is not an offer to sell any securities or a solicitation of an offer to purchase or sell any security and should not be construed as such.  References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.  Nothing herein should be construed as a recommendation to purchase any particular security.  The companies and securities described herein may not be held in every (or any) FLI strategy at any given time.  Investment returns will fluctuate over time, and past performance is not a guarantee of future results.

This communication may not be reproduced, distributed, or transmitted, in whole or in part, by any means, without written permission from FLI.

All performance data presented throughout this communication is net of fees, expenses, and incentive allocations through or as of March 31, 2024, as the case may be, unless otherwise noted.  Past performance of FLI and its affiliates, including any strategies or funds mentioned herein, is not indicative of future results.  Any forecasts included in this communication are based on the reasonable beliefs of Mr. Rosenthal or FLI as of the Publication Date and are not a guarantee of future performance.  This communication may contain forward-looking statements, including observations about markets and industry and regulatory trends.  Forward-looking statements may be identified by, among other things, the use of words such as “expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar expressions.  Forward-looking statements reflect the views of the author as of the Publication Date with respect to possible future events.  Actual results may differ materially. 

FLI believes the information contained herein to be reliable as of the Publication Date but does not warrant its accuracy or completeness.  This communication is subject to modification, change, or supplement without prior notice to you.  Some of the data presented in and relied upon in this document are based upon data and information provided by unaffiliated third-parties and is subject to change without notice.

NO ASSURANCE CAN BE MADE THAT PROFITS WILL BE ACHIEVED OR THAT SUBSTANTIAL LOSSES WILL NOT BE INCURRED.

Copyright © 2024 by First Long Island Investors, LLC.  All rights reserved.

FLI’s Philip Malakoff Shares His Expertise at Titan Investors’ NYC Conference

March 26th, 2024

On March 25th Titan Investors held their inaugural New York event, the NYC Private Active Exchange.  Some of the industries’ biggest investors in the area gathered to debate and discuss capital allocation approaches across public and private sectors, the investment environment and the economy.  The event brought together leaders from Family Offices, Private Banks, Registered Investment Advisors and industry professionals including Chief Investment Officers, Heads of Research, Portfolio Managers and Senior Executives.

Philip Malakoff, Executive Managing Director and Director of Research at First Long Island Investors, LLC, accepted an invitation to participate in a panel discussion on public investment markets.  The panel discussion, moderated by Steve Mula, featured prominent figures in the investment industry, including Philip Malakoff, Thomas Cahill, and Kevin Mahn. The panelists shared their expertise and insights on the current state of the investment markets, opportunities and challenges facing investors, and strategies for success in this dynamic landscape as well as how to address ultra-high net worth client concerns and some of their unique situations.

As a seasoned investment professional with over three decades of experience, Philip provided valuable perspectives drawn from his extensive knowledge of the markets and his work with clients. His insights have been molded by his role as Executive Managing Director and Director of Research at First Long Island Investors, LLC, where he leads the firm’s research efforts, contributes to investment decision-making and provides advice to the firm’s clients.

Philip’s participation in the panel discussion provided him with the opportunity to engage with industry leaders and share his unique viewpoints with a highly-targeted group of peers and highlights his status as a thought leader in the investment community and his commitment to educating and empowering the investment community.

First Long Island Investors, LLC is a leading private wealth management firm committed to providing innovative solutions and exceptional service to its clients. With a focus on research-driven strategies and a commitment to integrity, FLI has established itself as a trusted partner to high-net-worth individuals.

Brain Gamble featured in Dan’s Papers Business Power Player

March 10th, 2024

First Long Island Investors is thrilled to announce that Brian Gamble, Senior Vice President – Private Wealth Management, has been named a Dan’s Papers Business Power Player in the financial services industry. This prestigious recognition honors Long Island’s top financial services leaders who have consistently demonstrated a commitment to helping clients achieve their financial goals.

Throughout the year, Dan’s Papers will be spotlighting leaders across various industries who have made significant contributions to the Long Island community. As a Business Power Player, Brian Gamble joins an elite group of individuals who have dedicated their careers to providing exceptional financial guidance and fostering the long-term success of Long Island’s residents.

Brian’s dedication to clients and his expertise in private wealth management have earned him this well-deserved recognition. We congratulate Brian on this remarkable achievement.

Brian Gamble has over 17 years of experience in the financial services industry, and he is known for his personalized approach to wealth management. He is committed to helping clients make informed financial decisions that align with their long-term goals.

2024 Market Update Web Seminar

February 22nd, 2024

Equity markets rebounded in 2023 while the bond market produced modestly positive results.  What does 2024 hold in store for investors? What investment themes will be important going forward? What economic trends will matter in 2024?

These are just some of the questions we hear from clients and business partners. In this web seminar we share our current outlook for the markets as well as discuss current investment themes.

DISCLAIMER

This presentation has been prepared for informational and educational purposes only by First Long Island Investors, LLC (“FLI”). This presentation should only be considered current as of February 22, 2024 (or as otherwise indicated in the presentation) without regard to the date on which it was received or accessed. As a consequence, events may transpire subsequent to the date of this presentation that can render the contents inaccurate or obsolete. FLI believes the information contained in this presentation to be reliable as of the presentation date but does not warrant its accuracy or completeness. No party is obligated to update the contents of this presentation. However, FLI maintains the right to delete, modify or supplement this presentation without prior notice.

The contents of this presentation are not intended to provide investment advice and under no circumstances does anything contained in this presentation represent a recommendation to buy or sell any particular security or to invest in any particular product. Nothing set forth herein shall constitute an offer to sell any securities or constitute a solicitation of an offer to purchase any securities. Past performance is not indicative of future results. Investment returns will fluctuate over time and may be volatile. Specific names in this presentation may have been presented as examples.  Such companies may or may not be currently owned (and may or may not have ever been owned) in FLI’s various strategies.  For a list of the top five and bottom five contributors in a given strategy, please contact FLI.

The names “First Long Island”, “FLI”, and all derivations thereof are the property of their respective owners and may not be used or copied without prior authorization. You acquire no rights or licenses to download, upload, post, transmit, publish, or distribute this presentation or any other material in any way that infringes or otherwise contravenes the rights of FLI or any third party, including any copyright, trademark, patent, rights of privacy or publicity or any other proprietary right.

In no event shall FLI be liable to any party for any damages, costs, fees, expenses, or losses of any kind in connection with any use of the contents of this presentation even if advised of the possibility of such damages.