| There's more than one vote next week that could rock your financial world. Two days after the US election, members of the Federal Open Market Committee will announce the outcome of their vote on the federal funds rate, a measure with the potential to change everything from the amount of money you earn on savings to the likelihood you keep your job. You'll recall the Fed's decision in September to slash its benchmark interest rate for the first time in four years. This half-point cut was billed as an aggressive, "jumbo" move many expected to boost the housing and stock markets, all while increasing the prices of bonds in your portfolio. It hasn't quite worked that way yet. Sure, the labor market is showing signs of strength and stocks are up. But the Fed's preferred measure of underlying US inflation just posted its biggest monthly gain since April. Mortgage rates are now higher than they were before the cut and the housing sector has struggled to gain momentum. Bond prices are down and yields on 10-year Treasuries this week hit the highest level since early July. What gives? "On the face of it, such a change could be driven by a better economic outlook," Lauren Goodwin, economist and chief market strategist at New York Life Investments, said in a note. "Strong jobs and sale data, resilient earnings, and sticky inflation have made investors unwind the pace and extent of expected Fed cuts." But Goodwin sees more at play here. She thinks rising long-term yields also have a lot to do with higher odds of a "red sweep," or Republicans winning big in the presidential and Congressional races next week. In a recent survey by The Wall Street Journal, 68% of economists said prices would rise faster under Donald Trump, who has said he would enact a variety of tariffs, than under Vice President Kamala Harris. Still, Goodwin's logic is that a wave in either direction could open the door to higher deficit spending and bring with it higher growth on one hand, but higher inflation, rates, and risk on another. What should you do in a world where it looks like inflation could tick up and borrowing costs stay elevated? I asked financial analysts and advisers that question this week, and their suggestions largely touched on three areas: housing, stocks and fixed income. On housing, Sally Boyle of S.J. Boyle Wealth Planning in Hanover, New Hampshire said aspiring buyers need to reset their expectations on mortgage rates. "What I try to tell my clients is that we were living in Disneyland for the last 10 years," she says, referring to the fact that mortgage rates were abnormally low following the financial crisis, dipping into the 2.5% ballpark. Anyone who lived through the 1980s recalls mortgage rates higher than 18%. A client recently bought a home, but ended up with a 6.5% mortgage rate and paid a third more for her house than she expected. Boyle tries to remind people that while home prices have gone up, so have the assets in their other accounts. Which brings us to stocks. "For equity investors, it is important to understand that better expected growth is the driver behind the rise in interest rates, which is a positive for risk assets," says Katie Nixon, chief investment officer for the wealth management business at Northern Trust. Tech stocks in particular have been on investors' minds this year, and not just because a handful have powered the S&P 500 to new highs. Many individual investors worry they have grown overweight in tech. Even those without this fear may need a reality check. "In a bull market, everybody's a genius," says David Nash, founder of Tend Wealth in Los Angeles. His advice to tech-stock pickers is to keep an eye on not just how your favorites are doing compared to an index like the S&P 500 or Nasdaq. "You need to look at a tech-based benchmark" to compare your returns to your industry-based risk profile, he said. If you aren't beating something like the more specific S&P 500 Information Technology index, you might want to consider a broader-based portfolio. And on fixed income, Jeff DeLarme, president of DeLarme Wealth Management of Palos Verdes Estates, California thinks it would be wise to diversify fixed income holdings while maintaining short- to intermediate-term exposure. That could potentially help through different inflationary environments. He notes that shorter-term investments may allow investors to roll into newer, higher-yielding securities more quickly, helping to offset the impact of potential inflation. Longer-term securities have more interest-rate risk, meaning if rates stay high — or go higher — their prices could fall. But of course, much of this depends on what happens in those two big votes next week. That speaks to DeLarme's other point. "Things are always uncertain," he says. "And we should get comfortable with that." — Charlie Wells P.S. Send questions about your own financial dilemmas to bbgwealth@bloomberg.net. We may get expert answers for you, and feature your question and the answer in an upcoming newsletter. Tech stocks struggled on questions over AI investments. We are in the thick of the tech portion of corporate earnings season. Microsoft and Meta reported Wednesday and Amazon and Apple are due Thursday. The first pair of tech titans disappointed the market, with investors wondering whether the companies can sustain profit growth while ramping up spending on artificial intelligence and cloud services. Bitcoin flirted with a record high. The digital asset climbed as high as $73,564 on Tuesday in New York. Bitcoin is viewed by some as a so-called Trump trade because Republican presidential nominee Donald Trump embraced digital assets during campaigning. Trump is ahead in prediction markets, while polls show a neck-and-neck race against Vice President Kamala Harris. The biggest gainers and losers on the Bloomberg Billionaires Index over the past week: Elon Musk was the biggest gainer in dollar terms, adding $31.4 billion and bringing his current net worth to a whopping $268.2 billion. The chief executive of Tesla benefited from the company's share-price spike after a blowout earnings report and projections of as much as 30% growth in vehicle sales next year. Thomas Frist was the biggest loser in dollar terms, clocking a $3.5 billion loss and bringing his current net worth down to $35.4 billion. Frist is a co-founder and the major shareholder of HCA Healthcare, an administrator of hospitals. The company's shares dropped after it reported disruptions from hurricanes would weigh on its earnings. Commercial Real Estate's Crash Is Battering Even the Safest Bonds Of all the hot spots across global finance that were upended by the pandemic, few remain as fragile as the commercial mortgage-backed securities market. And within this market, the pain is most acute in a new breed, known as single-asset, single-borrower commercial property bonds, or SASBs for short.  Photographer: Carolina Moscoso A Bloomberg analysis of almost every SASB tied to a US office property, more than 150 in all, revealed that creditors across numerous deals are on track to get only a portion of their original investment back. In multiple cases, the losses will likely reach all the way up to buyers of the AAA portions of the debt. This is in large part because unlike conventional CMBS, which bundle together hundreds of property loans, SASBs are typically backed by just one mortgage tied to one building. The pandemic exposed just how risky a concept this was. NYC Co-Op Market Reawakens With Bargains for First-Time Buyers Co-ops were largely overlooked in recent years in favor of newer condos with splashy amenities — and none of the lifestyle constraints or intrusive financial vetting that co-ops are known for. But with few affordable condo options to choose from, New Yorkers who had initially written off co-ops are taking the leap, finding appealing apartments and sellers who are primed to negotiate on price. Co-op boards, too, are helping get deals done in some cases by relaxing certain financial requirements. Is someone in your family applying to college and looking at less competitive schools in order to receive merit aid? If so, we want to hear from you. Some of our best journalism at Bloomberg Wealth comes from your own stories and we'd love to hear from you, your friends or clients pursuing the above. Please email bbgwealth@bloomberg.net or fill out this form. Against the backdrop of the United Nations Climate Change Conference, or COP29, we convene the foremost leaders in business, finance, policy, academia and NGOs for candid conversations focused on helping meet the conference's goals. Join us in Baku, Azerbaijan, on Nov. 13. Learn more. | 
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