Episode summary
Shelly Antoniewicz connects economics, investing and public policy through stories from her career.
Key takeaways
- The velocity of money helps explain how money moves through an economy.
- Compounding is an important concept for financial education.
- Economics, investing and public policy intersect in the investment industry.
About this episode
In this episode of Rocking Finance, RTSWS CEO Ashley Leftwich speaks with Shelly Antoniewicz, Chief Economist at the Investment Company Institute (ICI), about pivotal moments in her distinguished career, along with how economics, investing and public policy are connected.
Shelly shares how a fast-food drive-through with her mom sparked an early understanding of the velocity of money and explores an RTSWS favorite, the power of compounding. She also discusses ICI’s mission and what’s ahead for the investment industry. Together, they offer practical advice for students building their financial knowledge and exploring their own career paths.
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Disclaimer: All financial and investment information contained in this podcast is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this podcast, you do so at your own risk.
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Transcript
Transcript supplied by Riverside; it may contain transcription errors.
speaker-0: Welcome to Rocking Finance, the Rock the Street Wall Street Podcast. Real stories, real access, real path into finance. Join us for candid high-impact conversations with industry leaders sharing the insights, experiences, career pivots, and journeys that can help young women advance through the financial industry with great confidence. Rock the Street Wall Street equips high school and university students, especially young women, by bringing the ⁓ and STEM to life through financial and investment fundamentals. We provide direct industry access and guidance supporting students and young professionals on their journeys from classrooms to careers while expanding participation in the capital markets. Through cohort-based learning, mentorship, and individual career connection, we help students build confidence, capabilities, and networks that open doors. Our goal is clear: expand participation in the capital markets and strengthen the future of finance one cohort at a time. Today I'm your host, Ashley Leftwich, CEO of Rockmistry Wall Street, that lets rock finance. Welcome to Rocking Finance, the podcast where we explore our careers, investing, economics, and the leaders shaping the future of the financial markets. I'm Ashley Leftwich, CEO of Rock the Street Wall Street, and today I'm delighted to be joined by Shelly Antony Fitch, Chief Economist at the Investment Company Institute, or ICI. We'll hear from Shelley about ICI and its mission to strengthen the foundation of the asset management industry for long-term individual investors. As chief economist, Shelley analyzes the economy, investment funds, retirement trends, and the public policies that shape the financial markets. Her work across economics, investing, and public policy can inform industry leaders and policymakers to better understand the forces influencing today's investment landscape. Today we'll discuss ICI, the current economic environment, policy issues affecting investors, how artificial intelligence is changing the profession, and Shelley's own career journey. We'll also hear her advice for the next generation of economists, investors, and financial leaders. Shelly, welcome to Rocking Finance. We're so glad you're here.
speaker-1: Thank you so much for having me. I'm I'm really excited to be here today.
speaker-0: Well, let's go ahead and get started with talking about ICI, the Investment Company Institute. So ICI's mission is to strengthen the foundation of the asset management industry for the ultimate benefit of long term individual investor. Can you tell us what that means in practice?
speaker-1: Well, it means focusing on the policies, the regulations, research and industry practices that help investors, just your regular everyday retail, individual investors, save and invest with confidence. So in practice, that work happens in several ways. First is advocating for sound public policy. We work with policymakers and regulators to promote rules that protect investors. support efficient markets and preserve access to investment products. And that helps regular everyday families face say for their retirement, for their kids' college education, and other long-term goals on their bucket lists. Second, and this is where my department comes in, is providing objective research and data. ICI produces research and industry statistics that help policymakers Market participants and the public better understand how funds and the capital markets operate and how retail investors use funds. Third is promoting strong industry standards. We bring industry participants together to address operational governance, fiduciary, and technology challenges to help ensure that investment products remain transparent. And focused on retail investors' interests. And lastly, we're all about expanding opportunities for investors. Ultimately, our goal is to help more people access professionally managed investment products and the long-term benefits of participating in the capital markets. So when ICI talks about strengthening the foundation. We're talking about building a regulatory and market environment that allows funds and asset managers to serve retail investors effectively. And when we talk about the ultimate benefit for investors, we're measuring us, we're measuring success by whether everyday Americans are better able to stay for retirement, build wealth, and achieve financial security over the long run.
speaker-0: mentioned that you're helping to save invest with confidence and that transparency piece is so important whenever we're looking at confidence in anything, right? The transparency, the data. And I'm delighted to hear about the education piece as well. So as chief economist at ICI, you spend your day studying the economy. When I was growing up, I actually paper traded with my dad. And today my daughters like to check to see who won for the day, was it the bull or the bear that won the race? What does a typical day look like for you? Which economic indicators or trends do you watch most closely during the day and how does that describe what today's economic outlook looks like?
speaker-1: So this is a great question for me because I have to say that my job allows me to indulge in one of my favorite activities without any guilt. I love to follow what's going on in the US economy and financial markets. I just do, you know. Typically, while I'm having my first cup of coffee in the morning, I'll check how the equity futures and treasury rates are trading, you know, whether they're up or down and by how much, and whether there was any big news overnight that's driving them. Then I like to note what the economic releases are coming out that day and what current expectations are for those numbers. That way when I'm kind of checking the market during the day, I can more easily understand why treasury rates or stock prices may be moving around during the day. I think everyone who talks to me likes to ask me, well, okay, what do you think is gonna happen to the economy? What do you think's gonna happen? So right now, like many, many Americans, I'm focused on the employment and the inflation reports. But I also like to follow reports on consumers' financial well-being. Consumer spending generally accounts for about two-thirds of economic activity. So understanding how cash constrained or flush households are is super helpful for thinking about their spending.
speaker-0: Yeah, and I appreciate that you shared a little bit more about what that cash constraint actually means for our students in the audience. Yeah. Actually, many of our students are beginning to see how economics, investing, and public policy all work together. And I appreciate that you mentioned looking at what the big news was and how that plays into it. How do thoughtful regulation and sound public policy strengthen? our markets and create better long-term outcomes for those individual investors.
speaker-1: No, I think this goes back to what I mentioned first, is that thoughtful regulation and sound public policy help protect retail investors by ensuring that the investment products, as you said, remain transparent, right? It's critical that people understand what they're investing in and that the regulations are focused on investors and helping investors to be able to save. In the capital markets. Thoughtful regulation and sound public policy also support efficient markets. And efficient markets are critically important. Investors, both institutional and retail, know that trading in the US financial markets is fair. Okay. And what do I mean by fair? Prices incorporate relevant information, and trading costs are competitive. So this framework. As you said, helps people feel confident about using investment products like mutual funds and ETFs to save for their long-term goals. They're not afraid of investing in a large cap equity fund or putting their money in a multi-sector bond fund.
speaker-0: Building on that, can you share some of ICI's priorities, including areas like the Growth Act and expanding investor access?
speaker-1: So there's a couple things I want to mention here. One is that ICI is very much in favor of Congress passing the Growth Act. So for your viewers who may not know what that is, I'm going to give a little briefer on that. So under current law, investors in mutual funds held outside of retirement accounts. So outside your 401k or outside your IRA.
speaker-0: Yes, please do.
speaker-1: Must pay taxes each year on capital gains distributions. They have to pay these taxes even if they didn't sell a single share of the fund, or even if those gains that they received were just automatically reinvested back in the fund. Okay. That means these investors are being taxed on money that they never really saw or received in their checking account. At all. But yet they're having to pay actual cold hard cash to the IRS. That reduces their returns. What we're advocating for, and our industry is advocating for, is the Growth Act. The Growth Act, which was introduced in the House and Senate, would let investors defer taxes on automatically reinvested capital gains distributions until they sell their shares in that fund. And this isn't any different treatment. This is exactly the same tax treatment as people who invest directly in stocks. So if I were to buy Apple directly, I would get this treatment. I would not be taxed on my capital gains until I sold my shares of Apple or and also bonds. So it's exactly the same treatment. So it's not asking for anything special. It's actually just asking to level the playing field. You know, because most middle class Americans, when they're buying into the equity market in particular, they're gonna be buying, they're buying through a fund, they're buying through a mutual fund or an ETF. And it really should have equal treatment to investors who are buying. Stocks directly. The second thing that ICI is in favor of is expanding access to private investments for retail investors. So if you think about this now, companies are waiting much, much longer to go public than ever before. We have so many unicorn IPOs, you know, and a unicorn IPO is when they come out and they're IPOing at more than a billion dollars. I mean, it's crazy, right? So we believe that. Retail investors should be able to invest in these next generations of transformative companies because as we all know, getting in earlier can lead to much bigger returns for them later. So if you're investing after the company's already hit a growth cycle, you're gonna miss out on those returns. We also believe Americans should have the opportunity to invest in private assets. Through regulated funds. And regulated funds here, mutual funds, ETFs, closed-end funds, these are established financial vehicles with a very robust regulatory framework and strong built-in investor protections. So regulated funds are the ideal wrapper because they have to follow strict legal requirements that include oversight from an independent board. limitations on leverage, limitations on transactions with affiliates to control conflicts of interest. And there's a bunch of other sort of investor protections that are designed to protect individual retail investors. So we think retail investors sort of deserve the freedom to have these choices. They can choose to invest in a fund that has exposure to private assets, or they can choose not to. They can take whatever approach works best for them, but we think they should have that choice in the first place.
speaker-0: Shelly, I'd love to hear more about your career journey. What sparked your interest in economics to begin with and what led you to ICI? For me, along the way, there have been mentors and experiences and turning points that shape my career. So did you experience the same and what continues to energize you in that work?
speaker-1: to economics even as a kid, but I didn't know it then.
speaker-0: You didn't call it economics?
speaker-1: There's one memory I have. I remember this distinctly. I was with my mom and she was paying for a fast food meal. I think it was before they even had happy beals. I had a dollar. Okay, but she we went to some fast food place and she was paying. And this was back in the day when people actually used real dollar bills, right? So I remember her paying and then I remember me in my head trying to map out the path. Those few bucks we're gonna take, like from the fast food place to the bank, then recycled from the bank to somebody else who'd go and spend it themselves somewhere and start the cycle all over again. And I had no idea that I was thinking about the velocity of Until over a decade later, when I was sitting in one of my college econ classes. So I guess it was just meant to be. I've been a professional economist for 34 years now. And I started my career at the Federal Reserve in Washington, DC. And I stayed at the Fed for 13 years. My first boss, who was an excellent writer, told me, Your first draft is Not a final draft. Those were great words of advice. And I still reread stuff I write, even emails. And darned if I don't catch typos or misspellings or inconsistent logic before sending it out. And I found that I'm a much better communicator following this practice. And that's something that's really helped me. And then how did I get from the Fed to ICI? I had many wonderful colleagues at the Fed, and a few actually moved on to ICI. So when ICI was hiring in 2005, some of these old Fed colleagues recruited me over to ICI, and I've been here over 20 years now. Honestly, it wasn't a hard sell for them. ICI has a sterling reputation for objective research and Analytic driven policy recommendations. And you know, I I knew about them prior. So I I feel like I was the lucky one. How do I stay energized? I'm energized by the variety of topics that the research department covers. So, you know, we're we're a group of about 45 in the department, but we're split into three different groups, and we cover ⁓ Huge amount of ground, retirement policy, tax policy, economic impact analysis of regulatory proposals, financial stability as it relates to funds, and market structure. So equity market structure, bond market structure. It's like our members are trading in these markets. And so if rules are going to impact the markets and gonna impact how they're able to trade, we will weigh in on that. So I have to say, covering that much ground, I am absolutely never bored. I'm
speaker-0: Sure, that is a lot of ground to cover. It also is something interesting as far as, you know, artificial intelligence is changing nearly every profession, including finance and economics. Keeping in mind that the students are preparing for their careers in this evolving landscape. How do you see AI influencing the work of economists? We just talked about all of all of those different areas. So economists, you know, investment professionals and policymakers.
speaker-1: insights that or the advice I would give some of the younger people and they probably already know this, but it you have to become AI literate. You have to learn how to use AI effectively to increase your productivity because that that is just the way it's going to be now. You have to know how to use it because it is a game changer for productivity. I myself, I find AI ⁓ to be an amazing tool to gather and synthesize information on specific topics. Can it do some of the higher level thinking that you know someone in my position is trying to do? No, not yet, but it it is just an incredible time saver because I no longer have to go and find all of this information and bring it together. In my department, we're using AI. In a different way, in another way. We're gathering unformatted data from disparate public sources, doing this manually. And we'd thought about trying to get some of this data, but it it was an insurmountable amount of human labor we would have had to put in to get this data. But now one of my staff has created an AI agent that just runs in the background on her computer. while she goes about her day accomplishing other tasks. And at the end of the day, she goes, she sees how much data the AI agent has found and scraped off of the public websites and is assembling a database for us for this information that we find we think is going to be super helpful. So those are just a couple examples of how we're using AI and just again, learn how to use it.
speaker-0: For sure, and it can really be a helpful tool in so many situations. Many of our students are actually discovering economics for the first time. And I'm curious as to what advice you would give some of those students who are looking to become more economically literate. Are there books or podcasts or news sources or daily habits that you build your understanding of the economy and markets you would suggest to them?
speaker-1: Besides listening to your podcast, Rocking Finance. Great start. I mean, that's that's like the bare minimum they should be doing. Just read the financial news. There are plenty of free sites out there. I I literally keep CNBC up on my screen all the time, every day. And I'm checking and I'm reading the little news stories and they're little snippets and it's great.
speaker-0: Thank you for that, Shelly.
speaker-1: And I think what's nice for younger folks is that, you know, that are just learning this is if you don't understand a term or a concept, use Ingestapedia or AI to explain it to you. It is really being able saying I don't know anymore is no excuse because it takes so little effort now to go find that information and make yourself knowledgeable.
speaker-0: Well, and I think just having CNBC on, even if you don't understand what's happening today, the more you have it on, the more you just start absorbing and putting the pieces together.
speaker-1: I keep the website up. So I'm checking the news stories. I'm checking the market. I'm I'm doing that. I will click on some of the videos when something is particularly interesting.
speaker-0: Yes, absolutely. And I think also your comment as far as like looking it up on Investopedia or I mean our career center even has resources to help define some of those more difficult topics and and being able to just start learning those different words that are a part of the lexicon is is a great start. So thank you for mentioning that. We'll close with two questions we asked many of our guests. So looking back to when you were in school or Just beginning your career. What do you wish you had known this?
speaker-1: People's skills matter just as much as SMARTs. Even though I started my career over 30 years ago, I think this applies even more today because of the age of technology. Either remote work or we're using so much technology that texting or teams chatting rather than calling people up and talking to them face to face. You need to have good People's skills. You can be super smart, but you still need to be able to get along with people, compromise, understand everybody's objectives and what the team goal is.
speaker-0: ⁓ yes, I I really love that. Building those relationships, but also then tying it back to how are you collaborating to meet those team goals? Wonderful. And finally, at Rock the Street Wall Street, we often say that understanding money gives people more choices. Looking ahead 15 years, what do you hope today's students understand about investing, economics, and financial decision making that will help them create greater opportunity for themselves, their families, and their communities?
speaker-1: Well, I'm sure you hear this one a lot, but for me it's the power of compounding. Start investing early and stay the course. Cause in 15 years, you're going to be so happy that you did that.
speaker-0: Shelly, that's my favorite word, so I couldn't have said it better myself. Shelly, thank you so much for joining us on Rocking Finance. We appreciate you sharing your insights on the economy, the important work of ICI, and your own career journey. Your perspective helps our students better understand how economics, investing, and public policy shape the world around them and how they will be a part of its future. Thank you.
speaker-1: Thank so
speaker-0: Thank you for joining the conversation. Visit Rock the Streetwall Street.com to learn more. Make sure to follow and join us for the next episode. Until next time, let's keep rocking findings.
