Polley, President and CIO of Stewart Capital Advisors, Speaks at Finance Seminar

Posted on 10/31/2019 3:39:07 PM

On October 14, 2019, Malcolm Polley visited the Eberly College of Business and Information Technology to present for Daniel Lawson’s Finance Seminar class (FIN 422) and meet with the Student Finance Association.

Malcolm is a graduate of IowaMalcolm Polley State University and currently serves as president and chief investment officer of Stewart Capital Advisors LLC. With over 25 years of experience in the investment and financial services industry, his past positions include serving as executive vice president and managing director of S&T Wealth Management, as well as president of the CFA Society of Pittsburgh. Polley holds a certification as a Chartered Financial Analyst, and previously served as adjunct faculty member in the Eberly College for several years. 

Polley’s presentation for the seminar class was titled “Prepping for Zero,” and it focused on the likelihood that inflation rates will drop to zero, remaining low and less volatile for the foreseeable future. He associated this drop with several factors, the primary factor being the current workforce demographics in the United States.

He outlined the correlations between the working age population growth rates and inflation rates, noting that this growth has declined from over 8 percent in the late 90s to below 4 percent in 2019. Similarly, he gave an overview of the average income in our economy and noted that an individual’s income peaks around 50–55 years old.

Polley stated, “The problem in our economy is a math problem.” By this, he meant that historical economic spending from the “Millennial” generation has not been enough to offset the average decline in “Boomer” income. Therefore, he suggested, we cannot achieve more rapid inflation rates or GDP growth rates because the rising incomes of millennials and declining incomes of boomers are offsetting each other.

Malcolm cited that changes in the US GDP post-1981 have been less volatile, and economic expansions have lasted roughly seven to eight years. He suggested that, since there is a net add to the labor pool and more jobs are available than people searching for them, a recession in industries like manufacturing and agriculture is unlikely to have a negative impact on the overall economy in the foreseeable future. This assumption also comes from the idea that the economy is currently transitioning from a labor-based economy to a knowledge-based economy. This means industries like manufacturing and agriculture are becoming less impactful on the workforce as labor jobs are being replaced by artificial intelligence. 

In conclusion, Polley mentioned his expectations for the working age population growth rate to continue its decline as we see a shift with boomers leaving the economy and millennials/Generation Z entering and beginning to dominate the economy. He expects this decline will result in shallow or no economic booms, shorter recessions, and longer periods of economic expansion. If this is the case, it would be difficult to maintain inflation at a desirable level, and global growth will be constrained in most countries.

Seth Thomas, a junior finance major and current intern with Stewart Capital Advisors, said, “Mr. Polley gave an in-depth explanation on how population and demographics influence economies and investments. His presentation aided me in understanding the key drivers of inflation and how it impacts his investment decisions.”

Thank you, Malcolm Polley, for visiting with our classes and sharing your knowledge and experience with our students!