Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Welcome to Merrin Talks Money.
Speaker 1: The podcast so much people who know the markets explain
Speaker 1: the markets.
Speaker 2: I'm Merrin Sum's that web.
Speaker 1: This week, I'm joined by Natalia Lippikina, ahead of EMEA's
Speaker 1: equity strategy and an executive director at JP Morgan Private Bank.
Speaker 1: We're going to talk about her current outlook on the
Speaker 1: equity markets as a whole, her take on the Great
Speaker 1: rotation to the extent there is one, and what she
Speaker 1: see is happening to the dollar over the next few months,
Speaker 1: plus of course a little more.
Speaker 2: Natalie, Welcome to Merrin Talks Money.
Speaker 3: Thank you so much for having me.
Speaker 2: Good of you to join us today.
Speaker 1: Now, I think if we're going to talk about equity
Speaker 1: markets at all, we've got to start on the US,
Speaker 1: the biggest and the boldest of all of them.
Speaker 2: What is your outlook there?
Speaker 1: And we keep talking on this podcast about the great
Speaker 1: rotation and about how money is just definitely going to
Speaker 1: move out of America into other markets. Valuations in the
Speaker 1: US will come down, valuations elsewhere will go up, but
Speaker 1: it never seems to quite happen in the volume that
Speaker 1: we expect.
Speaker 3: We are actually quite still constructive on the US market.
Speaker 3: We like other markets like Europe, but we don't want
Speaker 3: to abandon the United States of America. And I think
Speaker 3: it's fascinating to see how quick the recovery has actually
Speaker 3: been since April lows. ASMP was down close to twenty
Speaker 3: percent at some point this year, and we're now making
Speaker 3: all time highs again. And I think the reason is
Speaker 3: because the markets and participants got more comfortable with AI story. Again.
Speaker 3: At the beginning of the year, there were loads of
Speaker 3: questions around AI, the deep seek and you know, all
Speaker 3: the money that has been invested into AI if that
Speaker 3: leads to any side of returns. Now, when you look
Speaker 3: into the earning season that just happened in the first quarter,
Speaker 3: we actually got the confirmation that AI trade is still ongoing.
Speaker 3: Companies continue to spend money despite the tariff uncertainty. And
Speaker 3: we're just one or two weeks before the earning season again,
Speaker 3: and we just think that the tech companies NAI companies
Speaker 3: will continue to do well. And remember US market is
Speaker 3: predominantly tach driven, so the outlook on tech is very important.
Speaker 1: Okay, so when you look at valuations, maybe I'm too
Speaker 1: valuation orientated, but When I look at the US, for example,
Speaker 1: we still have pretty much the most expensive valuations ever
Speaker 1: seen apart from two thousand, etc. And you look at
Speaker 1: any valuation method, doesn't matter what you look at, it's
Speaker 1: still close to historic highs. And every time you see
Speaker 1: valuations at this kind of level, you see returns in
Speaker 1: the following decade pretty week. So if that doesn't happen
Speaker 1: this time, it will be a bit of a historical anomaly.
Speaker 3: Right, I would say that we are quite comfortable with
Speaker 3: where the valuation can actually stay. Where in the camp
Speaker 3: that valiation can be between twenty twenty one times next
Speaker 3: twelve months price to earnings. And the reason for that
Speaker 3: is when you look into where tech is right now
Speaker 3: in terms of the waiting, in terms of the net income,
Speaker 3: it's so much better and so much more important that
Speaker 3: it has been in the last ten to fifteen years.
Speaker 3: The S and P market is predominantly driven by tech,
Speaker 3: and if you look underneath the sector, you basically have
Speaker 3: margins that are improving and you have the AI story. Now,
Speaker 3: I want to emphasize on AI story, because AI doesn't
Speaker 3: just equal tech. The penetration of AI doubled over the
Speaker 3: last year or so and what AI actually is. It
Speaker 3: means that some companies can become more efficient by efficient,
Speaker 3: meaning that their margin can actually be higher longer term,
Speaker 3: that all of that actually deserves a higher valuation. So
Speaker 3: if you look into the kapex intensity, those tech businesses
Speaker 3: are just less capex intense, their margins continue to grow,
Speaker 3: they continue to invest into AI. And this is the
Speaker 3: reason why. Which is comfortable with the multiple? Or where
Speaker 3: is this right now? Again fascinating to see valuation is
Speaker 3: back to twenty two times as we speak, despite the
Speaker 3: warriors around tariffs, despite the war, is about where earnings
Speaker 3: will be this year, and I think the fundamental reason
Speaker 3: for that is tech.
Speaker 1: Another one of the conversations that we have over and
Speaker 1: over and over is at what point do profit margins
Speaker 1: in the US revert to some kind of mean, because again,
Speaker 1: you have historically high profit margins and you might say, well,
Speaker 1: because of AI, because of that, but nonetheless, historically these
Speaker 1: things do tend to revert to a bit of a mean.
Speaker 1: And when you see things at this level, what happens
Speaker 1: is maybe there's a different type of competitional maybe there's
Speaker 1: a new series of regulations, et cetera, et cetera, something
Speaker 1: usually comes in to reduce margins when they hit this
Speaker 1: kind of big But you don't think that's going to
Speaker 1: happen this time.
Speaker 2: You see them continueing to.
Speaker 3: Well, I think it depends how quickly businesses adopt AI.
Speaker 3: Right now, you have less than ten percent of companies
Speaker 3: adopting AI. I think it's quite a low number compared
Speaker 3: to what benefits AI can actually bring to the business.
Speaker 2: Yeah.
Speaker 3: Now, if companies do embrace the AI adoption, that should
Speaker 3: lead to better margins overall. Now, if you're talking about
Speaker 3: more cyclical downturn, of course it can happen. Cyclical downturn
Speaker 3: can happen at any point in time, right, it may
Speaker 3: happen with terriffs. For example, we still don't know what
Speaker 3: teriffs will bring this year. Right, we're still in the
Speaker 3: way to see mode. For example, for this year, we
Speaker 3: are in the wider they expected range. We think that
Speaker 3: s and peak earnings can be between plus two to
Speaker 3: plus nine because tariff uncertainty is still here. But if
Speaker 3: we're talking about like structurally, we think that AI just
Speaker 3: can bring more efficiencies out of the companies.
Speaker 1: Okay, that's companies across the board. The AI companies themselves
Speaker 1: e actually the producers. We had someone on the other
Speaker 1: day who is just discussing AI models and saying, you know, basically,
Speaker 1: they're kind of all the same, and in the end,
Speaker 1: these companies are going to be the AI is going
Speaker 1: to be effectively like airlines. Lots of lots of companies
Speaker 1: bringing powers of capacs in and producing rather similar products
Speaker 1: and seeing their margins. You know, never never quite get
Speaker 1: where you think they're going to be.
Speaker 3: But also remember it's also the companies that adopt AI.
Speaker 3: I think, of course, the discussion is much much broader
Speaker 3: than just technology companies. Technology companies are just enablers of that,
Speaker 3: but I think the adoption will be actually across different sectors.
Speaker 1: So when we finally get the great productivity revolution we've
Speaker 1: been waiting for for decades, potentially yes, okay, not potentially yes,
Speaker 1: just yes, right.
Speaker 3: We'll see as we go, depending on how companies are
Speaker 3: adopting AI.
Speaker 1: Okay, So do you still think that in an ordinary
Speaker 1: person's portfolio, the US should be the kind of waiting
Speaker 1: that it has been for the last few years. So
Speaker 1: a lot of portfolios ordinary people are held with wealth
Speaker 1: managers in the UK or elsewhere, etc. Will have maybe
Speaker 1: fifty sixty close to seventy percent of their equity allocation
Speaker 1: in the US.
Speaker 2: Is that still appropriate?
Speaker 3: Do you think it's still appropriate to have a very
Speaker 3: high wasting to a S and P. But people should
Speaker 3: think about how much dollars they actually want to have
Speaker 3: in their portfolio because we're clearly seeing the move over
Speaker 3: the last decade or so, a lot of investors built
Speaker 3: very big overweights to the US market and the US dollar.
Speaker 3: Now we're in the camp that we think that dollar
Speaker 3: will continue to depreciate. For example, we have a target
Speaker 3: of one twenty by mid twenty twenty six on euro dollar.
Speaker 3: So that means that people start needs to start thinking, Okay,
Speaker 3: how do I actually diversify my US dollar portfolio? Now,
Speaker 3: it doesn't mean that you abandon the US. It just
Speaker 3: means that marginally you just start looking into our their geographies,
Speaker 3: for example Europe. And when you look into Europe, I think.
Speaker 1: So, can I interrupt you just sorry briefly that when
Speaker 1: you say marginally, what do you mean? Do you mean
Speaker 1: that you should take your waiting in the US down
Speaker 1: to forty percent? And how big a shift are we
Speaker 1: talking about?
Speaker 3: No, I think the shift to forty percent is quite
Speaker 3: substantial I'm talking about if you know investors have ninety
Speaker 3: percent exposure to the US, that is pretty substantial. Right
Speaker 3: If you look into MSCI World, somewhere between sixty to
Speaker 3: seventy percent makes sense to.
Speaker 2: US, okay, So just the what's what's in the index?
Speaker 3: Correct?
Speaker 1: So anyway, anyone who holds a global ETF is already
Speaker 1: where you would think they should.
Speaker 3: Be exactly because there are there are people out there
Speaker 3: who have very big exposures to two dollars and to
Speaker 3: US markets, and they should start rethinking how much they
Speaker 3: want to have. Sixty seventy percent looks good to.
Speaker 2: US, okay.
Speaker 1: And one of the one of the numbers that I
Speaker 1: keep watching is the number of the percentage of corporate
Speaker 1: equities in the US that are held by foreign investors.
Speaker 1: And it keeps creeping up and up and up and
Speaker 1: up and up. And it's now seventeen and a half,
Speaker 1: nearly eighteen percent. And that's up from more like sort
Speaker 1: of five six percent towards the end of the nineteen nineties.
Speaker 1: So you know, there's been a massive shift by non
Speaker 1: US investors into the US. But you are feel that
Speaker 1: people should be happy with.
Speaker 3: That, well, I think and This is what I mean
Speaker 3: by marginally reducing the exposures, because if you think about
Speaker 3: what was the reason for that, it's first of all,
Speaker 3: a very strong performance of the US equity market, but
Speaker 3: also very strong dollar. And when you know, US market
Speaker 3: continues to perform really well, but there are question marks
Speaker 3: around FX, and when other markets are also performing well.
Speaker 3: Back to European domestics story that is happening right now,
Speaker 3: which wasn't the case, you know, even five years ago.
Speaker 3: When there is an interesting story here in Europe, you know,
Speaker 3: investors just start thinking about how much they actually want
Speaker 3: to have in the US if there are alternative markets
Speaker 3: to that. This is one of the reasons. The second
Speaker 3: one is talking you know, in our outlook, one of
Speaker 3: the big themes was actually portfolio resilience. So traditionally people
Speaker 3: have sixty to forty in their portfolio. Maybe adding different
Speaker 3: asset classes, different sources of risk and return to your
Speaker 3: portfolio makes sense. Infrastructure, gold, hedge funds, So there is
Speaker 3: a lot to talk about that rather than just having
Speaker 3: you know, all exposure in the US equity market.
Speaker 1: Okay, well, let's go back to when I interrupted you
Speaker 1: five minutes ago, for which I apologize you were just
Speaker 1: starting to talk about European markets and saying that if
Speaker 1: you're moving a little out of the US, Europe would
Speaker 1: be one of the top places you would think would
Speaker 1: be reagionable to go.
Speaker 2: Is that right?
Speaker 3: That's correct, And it's interesting what is happening in Europe
Speaker 3: because historically, and would mean five ten years, the way
Speaker 3: everyone into Europe was around, well, there is a very
Speaker 3: good stimulus and strong stimulus in China, less by European
Speaker 3: equities because they're exposed to that market, or the US
Speaker 3: economy is growing and very strong. Europe has exposure to
Speaker 3: that market. That is changing. What is happening in Europe
Speaker 3: right now is you're basically seeing a very strong fiscal
Speaker 3: stimulus coming from the German market. And just to put
Speaker 3: some numbers into that, five hundred billion over the next
Speaker 3: twelve years, that is pretty substantial on the economy. That
Speaker 3: is roughly four trillion. You compare that to the COVID
Speaker 3: package back in the US in twenty twenty one, similar size,
Speaker 3: but in a much larger economy, so the impact was
Speaker 3: smaller and it was quite unprecedented. Not a lot of
Speaker 3: people were expecting, you know, something from the German economy,
Speaker 3: who is in general quite fiscally constrained, so that was
Speaker 3: surprise number one. And secondly, obviously the security spending that
Speaker 3: is coming out of European countries that is also quite unprecedented.
Speaker 3: So when you put two things together, you're seeing the
Speaker 3: growth in the European market that can potentially slightly narrow
Speaker 3: the gap with the US earnings growth. Now we don't
Speaker 3: think it's completely closest. We just think that the gap.
Speaker 1: Narrows, okay, And that means that it still makes sense
Speaker 1: for European markets have lower valuations overall than US markets
Speaker 1: because that growth differential remains.
Speaker 3: And it's not just growth differentiate, it's also the sector composition.
Speaker 3: When you look into the discounts, Europe in general traits
Speaker 3: at around twenty to thirty percent discounts to the US.
Speaker 3: Right now we're thirty percent. And the reason is because
Speaker 3: one of the reasons is because we just don't simply
Speaker 3: have enough tech. We have a lot of financials, we
Speaker 3: have a lot of industrials, whereas US market is all
Speaker 3: about tech. So naturally your sector composition is quite different,
Speaker 3: meaning that the evaluation is different as well. Now in
Speaker 3: terms of the growth, the growth is also quite different.
Speaker 3: But the growth is just the matter of the sector
Speaker 3: composition that you have. Our tech sector is much smaller
Speaker 3: than in the US, and therefore our growth is smaller
Speaker 3: as well. But when we look into twenty twenty six
Speaker 3: and twenty twenty seven, so the next two years, we
Speaker 3: actually think that the growth can be between mid to
Speaker 3: high single digit. Now this year is a bit more
Speaker 3: uncertain because of the tariffs, but next year, combination of
Speaker 3: German fiscal stimulus security spending in Europe can actually lead
Speaker 3: to a bit better than average growth in Europe.
Speaker 2: Okay.
Speaker 1: And when you look at Europe, which sectors are interesting
Speaker 1: and obviously there's a huge amount of money is going
Speaker 1: to be going into defense. And one of the things
Speaker 1: that we've talked about again quite a lot here, both
Speaker 1: in the US and across Europe, is this changing nature
Speaker 1: of what defense means. And we know when we talk
Speaker 1: in the UK about spending five percent of our GDP
Speaker 1: on defense, and no one knows where that money is
Speaker 1: going to come from, obviously, but let's say we somehow
Speaker 1: find that money. We know it's not actually going to
Speaker 1: go in to you know, tanks and guns. A lot
Speaker 1: of it is going to go into energy, security and infrastructure, etc.
Speaker 1: So that's that's that's a changing dynamic. Is that a
Speaker 1: sector that you find interesting in Europe?
Speaker 3: Well, like industrial sector, So industrial sector is exposed to
Speaker 3: a lot of different themes and structurally it is interesting.
Speaker 3: One of the big themes that industrials is actually exposed
Speaker 3: to is AI. So AI is a big topic. And
Speaker 3: it's not just tech companies that expose to do I,
Speaker 3: it's also the industrial companies. The second thing is you
Speaker 3: have the fiscal spending in Germany, so naturally the companies
Speaker 3: that are the most exposed to that will actually be industrials.
Speaker 3: And we think that the impact is likely to come
Speaker 3: I would say from next year rather than this year. Again,
Speaker 3: this year is more teriff specific, and then yes, defense
Speaker 3: spending is also increase in Europe. But overall, I would
Speaker 3: say when you look into the European story, the most
Speaker 3: interesting angle is actually the domestic companies because in the
Speaker 3: last decades or so, I would say, the focus has
Speaker 3: been on the multinational companies that have exposure to the US,
Speaker 3: have exposure to Asia, but less exposure to Europe. And
Speaker 3: now it's changing. People want to have domestically oriented companies
Speaker 3: are the industrial sector, financial sector, construction utilities, because again
Speaker 3: the story is evolved here in the region rather than
Speaker 3: everyone else. And on top of that, you basically have
Speaker 3: if you're looking into the domestic oriented companies, you have
Speaker 3: more exposure domestically, but also less effects risk, which is
Speaker 3: quite important because you know, when euro dollar continues to rise,
Speaker 3: that is not great for some of the exporters. And secondly,
Speaker 3: you have less terrif risk.
Speaker 1: What about the consumer orientated companies or even the luxury
Speaker 1: good companies.
Speaker 3: I think I think the expectations for those companies are quite
Speaker 3: weak as we speak. I think they need to deliver
Speaker 3: better than expected results in the coming couple of quarters
Speaker 3: and especially show that the US market continues to be strong.
Speaker 3: And then there is a bit of a relief in
Speaker 3: the Chinese market, which hasn't been the case for the
Speaker 3: last couple of years. I think the valuation is attractive
Speaker 3: for those markets, but there is a very kind of
Speaker 3: a big divergence between the losers and the winners in
Speaker 3: the space. But overall, right now, the market has a
Speaker 3: bit of a downturn and needs better growth to kind
Speaker 3: of to show investors that this sector remains to be
Speaker 3: interesting long term.
Speaker 2: Do you look at the UK at full Natalie, are
Speaker 2: you very focused on Europe?
Speaker 3: I do. It's a cheap market, but it has been
Speaker 3: cheaped for a very long time. The challenge with the
Speaker 3: UK is it just doesn't have the same fiscal stimulus
Speaker 3: as German economy, for example, has and as a result,
Speaker 3: you just don't have the same earnings growth as the
Speaker 3: European markets currently is experiencing. So there are interesting pockets
Speaker 3: in the markets in different sectors, like real estates, some
Speaker 3: in oil and gas sector, but overall we just can't
Speaker 3: find the driver for the UK markets to rerate.
Speaker 1: Talked about physical stimulus quite a lot, and obviously the
Speaker 1: main reason that UK can't have fysical stimulusms because it's
Speaker 1: horrific levels of debt and deficit, so you know, we're
Speaker 1: not really in a position to spend, and the UK
Speaker 1: has is particularly bad, but across Europe there's still an
Speaker 1: ongoing debt problem. There any any markets that concern you particularly.
Speaker 3: Not really, I would say this is just in general
Speaker 3: the theme as you highlighted the theme going into this year,
Speaker 3: were highlighted this particular each you to investors and look,
Speaker 3: I think the reason why for example, Germany was able
Speaker 3: to do the fiscal stimulus was because they were very
Speaker 3: prudent for the last you know, decades or so when
Speaker 3: we look into the other countries, is just much much
Speaker 3: more difficult to have a very similar fiscal spending. And frankly,
Speaker 3: this is one of the reasons why when we talk
Speaker 3: to investors we highlight the power of you know, diversifying
Speaker 3: beyond your sixty to forty portfolio, adding other asset classes
Speaker 3: that can do well if inflation picks up, for example,
Speaker 3: alternatives for example, infrastructure, hatch funds, gold, so really diversifying
Speaker 3: given the potential different scenarios that can unfold.
Speaker 1: So when you say infrastructure, what do you mean From
Speaker 1: a retail ordinary investors point of view?
Speaker 3: It can be just as boring infrastructure as airports and roads,
Speaker 3: or it can be digital infrastructure that is growing much faster,
Speaker 3: for example data centers. But I would say this is
Speaker 3: probably more a theme in the private markets rather than
Speaker 3: public markets.
Speaker 1: Okay, and gold in back at the late seventies early eighties,
Speaker 1: it was considered perfectly normal, in fact even compulsory to
Speaker 1: have at least five, six, seven, eight, nine, ten percent
Speaker 1: of your portfolio in gold, and then suddenly over the
Speaker 1: eighties nineties, as inflation disappeared as a risk, so did
Speaker 1: the gold allocation. And now we're at a point where
Speaker 1: almost no ordinary investors hold any gold at all. And
Speaker 1: you what would you say, What would you say to them?
Speaker 2: And why?
Speaker 3: I would say that investors should definitely have exposure to gold.
Speaker 3: Gold continues to be one of our highest conviction despite
Speaker 3: the big rally. It's a different asset class. It provides
Speaker 3: you with the diversification benefits, and it's also one of
Speaker 3: the asset classes to look giving the dollar weakness. So
Speaker 3: absolutely investors should look into dollar and investor.
Speaker 1: And it's also I mean, it's your insurance against geopolitics,
Speaker 1: isn't it correct?
Speaker 3: I would say in general the geopolitics for US, geopolitics
Speaker 3: tend to have a very short lived impact on market.
Speaker 3: What matters to us usually is earnings. Earnings is the
Speaker 3: most important factor when investing into markets, and as I
Speaker 3: mentioned before this year, we may have a bit of
Speaker 3: uncertainty given the tariff risk, but overall we're seeing a
Speaker 3: very strong corporate backdrop at this point.
Speaker 1: Okay, so you are only interested in geopolitics to the
Speaker 1: extent that you can see exactly how it is that
Speaker 1: they will affect earnings. It's not so much a sentiment thing.
Speaker 3: View correct sentiment can be actually a short lift. It
Speaker 3: was interesting to see the oil price move a couple
Speaker 3: of weeks ago when oil was trading above eighty, but
Speaker 3: now it's going back to sub seventy and it just
Speaker 3: shows you that even though the sentiment was rising, but
Speaker 3: overall we're not seeing a very big impact on geopolitics
Speaker 3: right now.
Speaker 1: But it's still from what you said earlier about the
Speaker 1: UK market, I picked up that you feel people should
Speaker 1: maybe still have some allocation to oil and gas.
Speaker 3: It depends when you look into the equity markets. And
Speaker 3: if you're buying the broader exposure, you will have the
Speaker 3: exposure to oil and gas because it's part of the
Speaker 3: intex it's just your exposure will be much smaller than
Speaker 3: the rest of the sectors. Overall, this is not the
Speaker 3: sector that we currently recommend.
Speaker 1: Okay, and outside Europe and the US, any markets that
Speaker 1: you look at that you find interesting, we.
Speaker 3: Think that in emergent markets, India looks quite interesting.
Speaker 2: In expensive, though expensive.
Speaker 3: Expensive but justified when you look into the valuation. It
Speaker 3: trades above its five year average on the PE multiple,
Speaker 3: but we think it's justified because you have the economy
Speaker 3: that is growing mid to high single digit. That translates
Speaker 3: actually into the earnings. Earnings are growing nicely double digit.
Speaker 3: Now it's very hard to find the economies and the
Speaker 3: markets that are growing so much. And then you also
Speaker 3: have a very interesting angle in my view, that is
Speaker 3: supply chain diversification. You know, when everyone is talking about
Speaker 3: tariffs and how tariffs can impact different companies, India actually
Speaker 3: stands out as the beneficiary from all those discussions and
Speaker 3: diversification of the supply chain and as well can be
Speaker 3: a market for those who are thinking to diversify it
Speaker 3: beyond the United States.
Speaker 2: Okay, any other markets like that.
Speaker 1: I mean, for example, we often talk about Vietnam, for example,
Speaker 1: as being a similar kind of economy one will benefit
Speaker 1: from this diversification of supply chain, etc.
Speaker 3: We've been talking about Japan positively, but we recently closed
Speaker 3: our positive call. We're still like it long term. We
Speaker 3: still think that there are interesting reforms happening in the market,
Speaker 3: but tactically we think we can rotate to the markets
Speaker 3: like Europe or the United States. The valuation and what
Speaker 3: changed there is that valuation based predominantly. Yes, it has
Speaker 3: done well. Valuation is a bit higher than what we
Speaker 3: would be comfortable with, so we've been recommending it for
Speaker 3: solid time, and we just think that taking some profits
Speaker 3: never hurts anyone and rotating somewhere else. But this was
Speaker 3: mainly yes, the valuation call overalls. Structurally, we think it's
Speaker 3: quite interesting what is happening there with regards to the reforms,
Speaker 3: and you know the increase in the shareholder returns that
Speaker 3: the Japanese companies are currently going through.
Speaker 1: Okay, interesting, thank you. Now, when you talked about different
Speaker 1: asset classes making up the forty in a portfolio and
Speaker 1: moving away from this whole sixteen to forty equity bond mix,
Speaker 1: and would you include cryptocurrencies and in particular Bitcoin in
Speaker 1: that as one of the assets that maybe should make
Speaker 1: up the insurance element of your portfolio side gold.
Speaker 3: We don't cover it, so we can't talk about it.
Speaker 2: At all.
Speaker 1: Nope, Okay, I totally understand all your arguments about the US, etc.
Speaker 1: But nonetheless, if people start investing now and that they
Speaker 1: use the allegation that you suggested as we've been talking,
Speaker 1: they will effectively be investing at all time highs and
Speaker 1: very high valuations.
Speaker 2: Is there an argument for saying maybe said this that
Speaker 2: in cash for a while.
Speaker 3: I think it's always very uncomfortable to look into the
Speaker 3: market and just say it's at all time high, I'd
Speaker 3: better stay in cash. The reality is staying in cash
Speaker 3: is not great for your long term goals, because equity
Speaker 3: market is the one that is giving you a very
Speaker 3: high return over the long term. But it always comes
Speaker 3: to us volatility. And I would just say that when
Speaker 3: we do look into our analysis and we compare them
Speaker 3: investing at all time highs versus not all time highs,
Speaker 3: there is actually not a lot of the diference, which
Speaker 3: is maybe a bit illogical. But the reality is when
Speaker 3: the market makes all time highs, the new all time
Speaker 3: highs usually follow because there is such a strong momentum
Speaker 3: in the market. So investing all time house can be
Speaker 3: quite difficult psychologically, but statistically looking into the numbers, there
Speaker 3: are turns that you get actually painting your very similar
Speaker 3: picture if you invest it in not all time has.
Speaker 2: Except for the occasional all time high.
Speaker 1: Every now and then there'll be an all time high
Speaker 1: that isn't followed by another all time hi.
Speaker 3: It's not long to have fullbacks in the market.
Speaker 1: Yeah, but you just don't know when that's gonna be, right, Natalia,
Speaker 1: one final question, if you could, I always ask everyone
Speaker 1: at the end of the podcast what they are reading
Speaker 1: at the moment.
Speaker 2: Are you reading anything interesting at the moment?
Speaker 3: Yes? Good, Well, I would say, Actually, I'm a big
Speaker 3: reader of Bloomberg, so I'm not sure if I am
Speaker 3: your typical guest. I just absolutely love reading what is
Speaker 3: happening on Bloomberg day to day. This is my goal
Speaker 3: to source.
Speaker 2: Oh, thank you, we appreciate that. But no novel, no
Speaker 2: interesting non fiction.
Speaker 3: No only finance related.
Speaker 2: I'm going to send you some summer reading tips nat earlier.
Speaker 1: It makes me nervous. Thank you so much for joining us,
Speaker 1: so we huguely appreciate it. That was absolutely fascinating.
Speaker 3: Thank you so much.
Speaker 1: Thanks for listening to this week's Marin Talks Money. If
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