1
00:00:02,440 --> 00:00:09,119
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. You're listening to the

2
00:00:09,160 --> 00:00:13,320
Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

3
00:00:13,360 --> 00:00:16,360
Speaker 1: Eastern on Appo, Cardplay and Android Auto with the Bloomberg

4
00:00:16,400 --> 00:00:19,840
Speaker 1: Business app. Listen on demand wherever you get your podcasts,

5
00:00:19,960 --> 00:00:22,800
Speaker 1: or watch us live on YouTube.

6
00:00:23,400 --> 00:00:25,800
Speaker 2: All right, let's go to geopolitics for a moment. Dan

7
00:00:25,840 --> 00:00:29,960
Speaker 2: Williams is standing by his reporter based in Jerusalem. Israel

8
00:00:30,040 --> 00:00:32,360
Speaker 2: is holding talks in Washington, and that's as the country

9
00:00:32,400 --> 00:00:34,479
Speaker 2: is weighing how to respond to an Iranian missile tech

10
00:00:34,880 --> 00:00:37,200
Speaker 2: about a week ago. And this comes as a year

11
00:00:37,240 --> 00:00:42,840
Speaker 2: anniversary of what happened in Israel and Gaza. Okay, so Dan,

12
00:00:43,000 --> 00:00:46,360
Speaker 2: what are where are we in terms of the actual talks.

13
00:00:46,400 --> 00:00:49,360
Speaker 2: We kind of know where the military fighting is. What

14
00:00:49,440 --> 00:00:50,159
Speaker 2: about the talks?

15
00:00:51,720 --> 00:00:54,520
Speaker 3: Well, Israel's Defense min So you have Gallant will this

16
00:00:54,760 --> 00:00:59,440
Speaker 3: evening set off for Washington for talks with his US counterpart,

17
00:01:00,560 --> 00:01:03,280
Speaker 3: Lloyd Austin. And also we hear other members of the

18
00:01:03,280 --> 00:01:07,679
Speaker 3: Biden administration. This is an especially brought period in this

19
00:01:07,840 --> 00:01:12,720
Speaker 3: alliance because while the Biden administration very supportive of Israel's

20
00:01:12,760 --> 00:01:17,320
Speaker 3: war effort in terms of supplying weaponry, moral support diplomatic support.

21
00:01:17,880 --> 00:01:21,919
Speaker 3: The sides have been locking horns at times about specific moods,

22
00:01:22,480 --> 00:01:24,880
Speaker 3: including this move into Lebanon on the ground over the

23
00:01:24,959 --> 00:01:28,880
Speaker 3: last week by the Israelis, including how Israel might carry

24
00:01:28,920 --> 00:01:32,399
Speaker 3: out its threat and retaliation for Iran's one hundred and

25
00:01:32,400 --> 00:01:36,000
Speaker 3: eighty ballistic missiles that were fired also just a few

26
00:01:36,080 --> 00:01:39,800
Speaker 3: days ago. So they're expected to discuss that, try to

27
00:01:39,840 --> 00:01:42,600
Speaker 3: work out something they might agree on that the Americans

28
00:01:42,600 --> 00:01:46,360
Speaker 3: would not see as needlessly rattling the region, perhaps setting

29
00:01:46,360 --> 00:01:49,680
Speaker 3: off an energy shop and a major shipping crisis and

30
00:01:49,800 --> 00:01:54,120
Speaker 3: terrorism crisis, just as the United States is in the

31
00:01:54,200 --> 00:01:56,920
Speaker 3: last weeks of the selection campaign ahead of the vote

32
00:01:56,920 --> 00:01:57,440
Speaker 3: in November.

33
00:02:00,520 --> 00:02:03,720
Speaker 4: Should we be surprised, Dan, that Israel has not yet

34
00:02:03,800 --> 00:02:07,160
Speaker 4: responded against Iran for that missile attack. I kind of

35
00:02:07,160 --> 00:02:08,840
Speaker 4: thought we would have seen something by now.

36
00:02:10,360 --> 00:02:13,239
Speaker 3: That has been said. On the other hand, this is

37
00:02:13,280 --> 00:02:17,200
Speaker 3: a pretty weighty period attacking Iran. Again, It's worth remembering

38
00:02:17,200 --> 00:02:19,840
Speaker 3: that the Iranian ballistic missile salver of last week was

39
00:02:19,840 --> 00:02:23,040
Speaker 3: the second such attack by Iran. It conducted one in

40
00:02:23,080 --> 00:02:26,600
Speaker 3: mid April, to which Israel responded with a very low signature.

41
00:02:26,639 --> 00:02:29,000
Speaker 3: In fact that these raleised to my knowledge, never acknowledged it.

42
00:02:29,400 --> 00:02:32,280
Speaker 3: They somehow managed to get some kind of strike vehicle

43
00:02:32,720 --> 00:02:36,840
Speaker 3: into Iran to hit a radar at a key air base,

44
00:02:37,160 --> 00:02:39,200
Speaker 3: but at the time they kept it very low key.

45
00:02:39,720 --> 00:02:41,680
Speaker 3: So the question is would they do it again now

46
00:02:41,840 --> 00:02:44,680
Speaker 3: or would it have to be something pretty spectacular in

47
00:02:44,760 --> 00:02:49,280
Speaker 3: order to register as a deterrent. Now within Israel there

48
00:02:49,280 --> 00:02:52,040
Speaker 3: as open discussion of whether Israel should go all the

49
00:02:52,040 --> 00:02:55,320
Speaker 3: way and strike Iran's nuclear facilities. This is something that's

50
00:02:55,360 --> 00:02:58,240
Speaker 3: been threatened for years, never carried out, or the oil

51
00:02:58,280 --> 00:03:01,720
Speaker 3: facilities or goo for something more limited military politics and

52
00:03:01,760 --> 00:03:04,639
Speaker 3: all that. This is really not something anyone would enter

53
00:03:04,639 --> 00:03:07,600
Speaker 3: into rashly. I think these Reelis will be very careful

54
00:03:07,639 --> 00:03:10,360
Speaker 3: to keep the Americans on side, and that is the

55
00:03:10,400 --> 00:03:13,600
Speaker 3: reason for this trip. And with the pace of this war,

56
00:03:13,639 --> 00:03:15,959
Speaker 3: I imagine even if the attack is carried out today,

57
00:03:16,040 --> 00:03:19,160
Speaker 3: next week, in a month, it will still be seen

58
00:03:19,480 --> 00:03:22,320
Speaker 3: as half of the course when it comes for this

59
00:03:23,360 --> 00:03:26,240
Speaker 3: current standoff or I should say face off between Israel

60
00:03:26,240 --> 00:03:29,160
Speaker 3: and i Ram.

61
00:03:29,200 --> 00:03:31,040
Speaker 2: All right, Dan, we really appreciate it. Thank you very much.

62
00:03:31,120 --> 00:03:34,400
Speaker 2: Dan Williams, reporter for Bloomberg News based in Jerusalem, joining

63
00:03:34,440 --> 00:03:37,120
Speaker 2: us there on the latest An Israel response to that

64
00:03:37,240 --> 00:03:38,520
Speaker 2: Iranian missile attack.

65
00:03:40,040 --> 00:03:43,960
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

66
00:03:44,040 --> 00:03:47,080
Speaker 1: weekdays at ten am Eastern on Apple card Play and

67
00:03:47,080 --> 00:03:50,000
Speaker 1: Android Otto with a Bloomberg Business app. You can also

68
00:03:50,080 --> 00:03:53,560
Speaker 1: listen live on Amazon Alexa from our flagship New York station.

69
00:03:53,920 --> 00:03:56,680
Speaker 1: Just say Alexa, play Bloomberg eleven thirty.

70
00:03:58,200 --> 00:04:00,120
Speaker 2: Let's stay on that China story for a moment, and

71
00:04:00,400 --> 00:04:04,680
Speaker 2: Bloomberg News and the current joins us now on China. So,

72
00:04:05,320 --> 00:04:08,000
Speaker 2: and you lived in China for many, many years, you

73
00:04:08,040 --> 00:04:11,800
Speaker 2: are obviously has an economics background. What we heard out

74
00:04:11,800 --> 00:04:14,720
Speaker 2: of China today felt a little same old, same old.

75
00:04:14,800 --> 00:04:17,160
Speaker 2: These are the things that we normally seem to think

76
00:04:17,160 --> 00:04:19,360
Speaker 2: about when it comes to China stimulus. Is that a

77
00:04:19,400 --> 00:04:20,400
Speaker 2: fair assessment?

78
00:04:21,600 --> 00:04:24,440
Speaker 5: Yeah, good morning. I think they had raised expectations because

79
00:04:24,440 --> 00:04:28,800
Speaker 5: the officials from the National Development Reformer Commission said they

80
00:04:28,800 --> 00:04:30,520
Speaker 5: were going to hold a press conference on the first

81
00:04:30,560 --> 00:04:33,640
Speaker 5: Tuesday back after the week long holiday. And given that

82
00:04:33,760 --> 00:04:35,480
Speaker 5: last week and the week before we had news about

83
00:04:36,200 --> 00:04:39,040
Speaker 5: pending China stimulus and expectations of warwide, this might be

84
00:04:39,080 --> 00:04:41,440
Speaker 5: the next leg. Here comes the government to explain things

85
00:04:41,440 --> 00:04:44,760
Speaker 5: further and announced new measures. But what happened was they

86
00:04:44,760 --> 00:04:49,760
Speaker 5: didn't announce any new measures. They spoke about bringing forward

87
00:04:49,839 --> 00:04:52,800
Speaker 5: and spending maybe tune out billion worth of spending, some

88
00:04:52,800 --> 00:04:55,960
Speaker 5: support for businesses and for some support for the less

89
00:04:56,040 --> 00:04:59,279
Speaker 5: privileged and poor in society, but not much by way

90
00:04:59,320 --> 00:05:02,359
Speaker 5: of detail. And I think that lack of detail on

91
00:05:02,360 --> 00:05:05,040
Speaker 5: the spending side is what this point in markets and

92
00:05:05,240 --> 00:05:06,240
Speaker 5: up ended trading.

93
00:05:06,000 --> 00:05:06,520
Speaker 6: The way he sought.

94
00:05:06,600 --> 00:05:09,400
Speaker 5: But to be clear, though, what they did say was

95
00:05:09,440 --> 00:05:12,960
Speaker 5: that they reaffirmed the commitment to meeting their five percent

96
00:05:13,200 --> 00:05:17,039
Speaker 5: growth target. That might sound like nothing to people living

97
00:05:17,080 --> 00:05:18,920
Speaker 5: from overseas, but it does mean the government's going to

98
00:05:19,040 --> 00:05:22,599
Speaker 5: hit that political sense of target, you know, at all costs,

99
00:05:22,640 --> 00:05:24,240
Speaker 5: and that means that at the very least they will

100
00:05:24,279 --> 00:05:26,920
Speaker 5: continue to support the economy. And remember, the five percent

101
00:05:26,960 --> 00:05:30,560
Speaker 5: growth target for China is obviously slower than double edgit

102
00:05:30,640 --> 00:05:32,440
Speaker 5: a decade ago, but it's five percent on a much

103
00:05:32,480 --> 00:05:34,360
Speaker 5: bigger base than it was a decade ago as well,

104
00:05:34,400 --> 00:05:35,200
Speaker 5: so it's not nothing.

105
00:05:37,800 --> 00:05:40,760
Speaker 4: And in reality, I guess from a political standpoint, maybe

106
00:05:40,800 --> 00:05:44,599
Speaker 4: from economic standpoint. In reality, what can President Jijiping do

107
00:05:44,680 --> 00:05:48,680
Speaker 4: in terms of fiscal stimulus, Well.

108
00:05:48,560 --> 00:05:51,800
Speaker 5: They have room and certainly room to borrow and spend

109
00:05:52,279 --> 00:05:54,440
Speaker 5: at the central government level. And now when you get

110
00:05:54,440 --> 00:05:57,239
Speaker 5: into the local governments and the provinces, and that's where

111
00:05:57,320 --> 00:06:00,000
Speaker 5: a lot of the property stress is located. That's where

112
00:06:00,040 --> 00:06:03,360
Speaker 5: the business model of selling landolf to developers raise finances

113
00:06:03,520 --> 00:06:05,560
Speaker 5: that seems to be broken at the moment. So that's

114
00:06:05,600 --> 00:06:08,120
Speaker 5: where your debt pile is. But the central government has

115
00:06:08,120 --> 00:06:11,360
Speaker 5: a lot of it of physical space. Use the jargon,

116
00:06:11,440 --> 00:06:15,360
Speaker 5: they could intervene. They could start shoring up projects or

117
00:06:15,760 --> 00:06:17,880
Speaker 5: recapitalizing the banks, which you have not of that in

118
00:06:17,880 --> 00:06:20,640
Speaker 5: recent weeks, or make sure that they get those property

119
00:06:20,680 --> 00:06:23,000
Speaker 5: construction sites finished. So there's a lot they could do.

120
00:06:23,320 --> 00:06:26,640
Speaker 5: There's a feeling though that they're still being cautious because

121
00:06:26,640 --> 00:06:28,560
Speaker 5: of the legacy of debt and leverage that was left

122
00:06:28,560 --> 00:06:30,920
Speaker 5: by previous rounds of China Stimmus and not just the

123
00:06:30,960 --> 00:06:32,320
Speaker 5: Flantic crisis, but also over the.

124
00:06:32,360 --> 00:06:33,120
Speaker 6: Last decade or so.

125
00:06:33,279 --> 00:06:35,000
Speaker 5: They didn't want to go on that road again. And

126
00:06:35,040 --> 00:06:36,880
Speaker 5: also there's a view that maybe they're holding their powder

127
00:06:36,920 --> 00:06:39,640
Speaker 5: somewhat dry. They want to get past the US elections

128
00:06:39,640 --> 00:06:41,719
Speaker 5: see what comes out of that, because that could also.

129
00:06:41,560 --> 00:06:42,520
Speaker 6: Be material for China.

130
00:06:44,960 --> 00:06:47,880
Speaker 2: So to that point, the market reaction was quite swift.

131
00:06:47,880 --> 00:06:49,520
Speaker 2: So the way you're talking about is like, look, they're

132
00:06:49,520 --> 00:06:51,560
Speaker 2: a little long term strategic. They don't want to make

133
00:06:51,560 --> 00:06:53,000
Speaker 2: any mistakes. They want to kind of see how the

134
00:06:53,040 --> 00:06:56,440
Speaker 2: election pans out. Golden Dragon indexes down, commodities are getting

135
00:06:56,480 --> 00:06:58,920
Speaker 2: hit really hard. Paul was pointing out Ali Baba's down

136
00:06:58,920 --> 00:07:01,080
Speaker 2: and by about eight percent. That's a proxy for the

137
00:07:01,160 --> 00:07:06,800
Speaker 2: China consumer. Is that market reaction legit? Like? Does it

138
00:07:06,839 --> 00:07:09,680
Speaker 2: measure up with what we actually heard in your experience

139
00:07:09,720 --> 00:07:11,840
Speaker 2: and understanding Chinese economic policy?

140
00:07:12,840 --> 00:07:16,320
Speaker 5: Well, typically the top policymakers in China, you know, markets

141
00:07:16,400 --> 00:07:18,600
Speaker 5: are not necessarily their number one concern. That's a rough

142
00:07:18,680 --> 00:07:20,360
Speaker 5: rule of thumb. But I think what happened over the

143
00:07:20,400 --> 00:07:23,559
Speaker 5: past couple of weeks was China's economy had reached such

144
00:07:23,600 --> 00:07:26,400
Speaker 5: a kind of a funk that when the officials came

145
00:07:26,440 --> 00:07:28,040
Speaker 5: out with the measures that they did, which is bringing

146
00:07:28,040 --> 00:07:30,640
Speaker 5: them boring costs, talking about putting money back into the banks,

147
00:07:30,840 --> 00:07:34,360
Speaker 5: the measures they announced for the Chinese break heighten explications

148
00:07:34,600 --> 00:07:37,080
Speaker 5: that more money might be under way real physical spending.

149
00:07:37,080 --> 00:07:38,680
Speaker 5: And that's when the market's went to open a tear.

150
00:07:38,920 --> 00:07:40,600
Speaker 5: And now we've reached a point where a wait a minute,

151
00:07:40,760 --> 00:07:43,240
Speaker 5: what exactly are they saying here. They're obviously putting support

152
00:07:43,240 --> 00:07:45,800
Speaker 5: into the economy. They obviously want to hit that five

153
00:07:45,840 --> 00:07:48,840
Speaker 5: percent growth target. That's a political target. But are they

154
00:07:48,880 --> 00:07:51,280
Speaker 5: going to actually go out and borrow and spend more money,

155
00:07:51,320 --> 00:07:53,800
Speaker 5: like real new money. We're not there yet. They may

156
00:07:53,880 --> 00:07:55,720
Speaker 5: yet do that. The anthem might yet be coming, but

157
00:07:56,000 --> 00:07:58,040
Speaker 5: that's not the signal for now. I think that's where

158
00:07:58,080 --> 00:08:00,800
Speaker 5: both the disappointment and they can fusion has come into

159
00:08:00,800 --> 00:08:04,000
Speaker 5: the market side of things. Is clearly not planning to

160
00:08:04,080 --> 00:08:06,320
Speaker 5: rep things up the way they have in previous downturns.

161
00:08:06,440 --> 00:08:08,160
Speaker 5: They're going to take their time working the way out

162
00:08:08,160 --> 00:08:08,360
Speaker 5: of this.

163
00:08:11,320 --> 00:08:13,280
Speaker 7: And I mean, just real quickly.

164
00:08:14,480 --> 00:08:19,720
Speaker 4: For me, it's the long term issues with their population aging.

165
00:08:19,720 --> 00:08:22,280
Speaker 4: I mean, some of those issues are just long standing.

166
00:08:22,320 --> 00:08:24,000
Speaker 4: I don't know how you get around those things.

167
00:08:24,640 --> 00:08:26,960
Speaker 5: Yeah, no, absolutely right. I mean I should have mentioned

168
00:08:26,960 --> 00:08:29,880
Speaker 5: the structural issues. You've got the demographics, you've got the

169
00:08:29,920 --> 00:08:34,720
Speaker 5: long term death story, You've got the system of political control,

170
00:08:34,760 --> 00:08:37,480
Speaker 5: which some people will argue will ultimately keep a cap

171
00:08:37,520 --> 00:08:39,760
Speaker 5: on Chinese economic potential. That's the point of debate, but

172
00:08:39,800 --> 00:08:42,000
Speaker 5: it's one of the structural challenges that people talk about,

173
00:08:42,280 --> 00:08:45,240
Speaker 5: all of which is weighing on China's growth. There's a

174
00:08:45,320 --> 00:08:47,680
Speaker 5: view out there that over the past four decades, the

175
00:08:47,720 --> 00:08:50,760
Speaker 5: low hanging fruit was picked. China had a manufacturing export model.

176
00:08:50,800 --> 00:08:53,280
Speaker 5: It was gangbusters. It all went well, throw in a

177
00:08:53,360 --> 00:08:55,920
Speaker 5: property boom to finish it off. But now we're the

178
00:08:55,920 --> 00:08:58,440
Speaker 5: point where, of course, making those gains so much harder,

179
00:08:58,600 --> 00:09:01,800
Speaker 5: aging workforce, a lot of debt, and giopolitical tensions means

180
00:09:01,800 --> 00:09:03,640
Speaker 5: the China story is going to be much more more

181
00:09:03,640 --> 00:09:06,160
Speaker 5: complicated in years ahead.

182
00:09:06,960 --> 00:09:08,080
Speaker 7: Hi, very good, end the current.

183
00:09:08,080 --> 00:09:10,200
Speaker 4: Thank you so much for joining us endocurrent Bloomberg Global

184
00:09:10,200 --> 00:09:14,520
Speaker 4: Economy reporter, giving us the latest on China.

185
00:09:14,800 --> 00:09:18,680
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

186
00:09:18,760 --> 00:09:21,840
Speaker 1: weekdays at ten am Eastern on Apple Card playing Android

187
00:09:21,880 --> 00:09:24,960
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

188
00:09:25,040 --> 00:09:28,880
Speaker 1: you get your podcasts, or watch us live on YouTube.

189
00:09:30,080 --> 00:09:34,000
Speaker 4: Alex Steele Paul Sweeney, we are live broadcasting live in

190
00:09:34,080 --> 00:09:35,520
Speaker 4: Orlando with the World Center.

191
00:09:35,640 --> 00:09:35,960
Speaker 7: Merit.

192
00:09:36,000 --> 00:09:38,560
Speaker 2: This place is huge, huge, I mean, how many steps

193
00:09:38,559 --> 00:09:39,440
Speaker 2: did you clock yesterday?

194
00:09:40,320 --> 00:09:41,199
Speaker 7: Fifteen thousand?

195
00:09:41,480 --> 00:09:41,560
Speaker 8: What?

196
00:09:42,080 --> 00:09:44,760
Speaker 4: Yeah, it's crazy and that's you know, but I'm all

197
00:09:44,760 --> 00:09:47,560
Speaker 4: over the theme parks. We're common Well's national conference for

198
00:09:47,600 --> 00:09:50,520
Speaker 4: financial advisors. I got like twenty twenty three hundred folks here.

199
00:09:50,720 --> 00:09:52,720
Speaker 4: A lot of smart folks come in here trying to

200
00:09:52,720 --> 00:09:56,080
Speaker 4: talk about the business and helping their clients with their

201
00:09:56,080 --> 00:09:58,319
Speaker 4: financial advice. Brad McMillan joins us here today. He's a

202
00:09:58,400 --> 00:10:01,720
Speaker 4: managing principal Wealth and Investment Management and the CIO at

203
00:10:01,720 --> 00:10:06,200
Speaker 4: Commonwealth Financial Network. Brett Aside from the coming hurricane, what

204
00:10:06,280 --> 00:10:10,320
Speaker 4: are your registered investment advisors asking you at this conference

205
00:10:10,400 --> 00:10:12,800
Speaker 4: this year? I mean it, I know it's S and

206
00:10:12,840 --> 00:10:15,040
Speaker 4: P's up twenty percent. I'm making money on my bonds,

207
00:10:15,080 --> 00:10:16,840
Speaker 4: making money on my cash. It's probably a good time

208
00:10:16,880 --> 00:10:17,800
Speaker 4: to be a financial advisor.

209
00:10:17,840 --> 00:10:19,240
Speaker 7: But what are they asking you going forward?

210
00:10:19,559 --> 00:10:22,360
Speaker 9: Well, the real question is always what happens next? Paul,

211
00:10:22,679 --> 00:10:25,320
Speaker 9: And you know, we've heard a lot of news. I mean,

212
00:10:25,520 --> 00:10:27,960
Speaker 9: the hurricane coming in is a great kind of metaphor

213
00:10:28,120 --> 00:10:31,400
Speaker 9: for impending doom. You know, we've got wars.

214
00:10:31,080 --> 00:10:34,240
Speaker 2: We get blue sky, so there's something that there, but

215
00:10:34,280 --> 00:10:34,800
Speaker 2: a little bit.

216
00:10:34,720 --> 00:10:37,280
Speaker 9: Of a mixed message, you get that, right, But you know,

217
00:10:37,360 --> 00:10:39,200
Speaker 9: so there's a lot of stuff that can go wrong.

218
00:10:39,280 --> 00:10:41,679
Speaker 9: The FED cut by fifty basis points. What do they

219
00:10:41,760 --> 00:10:45,360
Speaker 9: know that we don't so the question is everything looks okay,

220
00:10:45,600 --> 00:10:48,440
Speaker 9: but is it really you know, is there a hurricane

221
00:10:48,440 --> 00:10:51,240
Speaker 9: out there despite the blue skies we see? And I

222
00:10:51,320 --> 00:10:53,960
Speaker 9: think the answer to that is, actually, things are okay.

223
00:10:54,000 --> 00:10:56,000
Speaker 9: There's still a lot that can go wrong and we

224
00:10:56,080 --> 00:10:58,280
Speaker 9: need to keep an eye on it. But my talk

225
00:10:58,360 --> 00:11:01,360
Speaker 9: this conference was actually going to be it's gonna be okay.

226
00:11:01,679 --> 00:11:03,040
Speaker 6: But I think that's the real takeaway.

227
00:11:03,200 --> 00:11:04,800
Speaker 2: And to be fair, you're gonna speak tomorrow, but you

228
00:11:04,800 --> 00:11:07,360
Speaker 2: guys had to cancel the morning because of the hurricane.

229
00:11:07,400 --> 00:11:10,080
Speaker 2: So if if your talk is yeah, it's stormy, but

230
00:11:10,120 --> 00:11:12,840
Speaker 2: we're gonna be okay, how how is that reflected in

231
00:11:12,880 --> 00:11:14,040
Speaker 2: a portfolio allocation?

232
00:11:14,600 --> 00:11:16,800
Speaker 9: Well, I think you can actually see it in what's

233
00:11:16,800 --> 00:11:18,760
Speaker 9: happening in the market today. I mean, one of the

234
00:11:18,800 --> 00:11:21,400
Speaker 9: things out there were was we're gonna have a recession.

235
00:11:21,440 --> 00:11:23,320
Speaker 9: We've got to get defensive, We've got to go with

236
00:11:23,400 --> 00:11:26,240
Speaker 9: value rather than growth. And that's not actually what we're

237
00:11:26,240 --> 00:11:29,280
Speaker 9: seeing in the market today. We're seeing the Nasdaq out performing,

238
00:11:29,679 --> 00:11:33,160
Speaker 9: and we're seeing the now which is relatively defensive, underperforming.

239
00:11:33,200 --> 00:11:35,640
Speaker 6: Now one day, of course, does not make a market.

240
00:11:36,120 --> 00:11:39,360
Speaker 9: But the real message of the jobs report, as I

241
00:11:39,440 --> 00:11:42,040
Speaker 9: read it, was that the economy is going to keep going.

242
00:11:42,240 --> 00:11:45,480
Speaker 9: We're gonna see earnings keep growing and growth. You know,

243
00:11:45,559 --> 00:11:48,359
Speaker 9: you don't have to get defensive. There are still opportunities

244
00:11:48,400 --> 00:11:49,880
Speaker 9: on the growth side going forward.

245
00:11:50,440 --> 00:11:52,160
Speaker 7: A lot of folks when that we saw the short

246
00:11:52,240 --> 00:11:53,120
Speaker 7: term rates go higher.

247
00:11:53,120 --> 00:11:54,800
Speaker 4: I mean, you're able to get I don't know, if

248
00:11:54,800 --> 00:11:56,840
Speaker 4: you're a Marcus customer, Goldmen Sex, you're going to get

249
00:11:56,880 --> 00:11:59,079
Speaker 4: five percent on a money market or something four point

250
00:11:59,080 --> 00:11:59,880
Speaker 4: two five, four.

251
00:11:59,720 --> 00:12:00,360
Speaker 7: Point two five.

252
00:12:00,400 --> 00:12:02,640
Speaker 4: Now, how do you get your RAS or what's the

253
00:12:02,640 --> 00:12:05,400
Speaker 4: message for your RAS about is it okay to be

254
00:12:05,520 --> 00:12:08,319
Speaker 4: in cash or now you need to be in this market.

255
00:12:08,559 --> 00:12:10,839
Speaker 9: I think at this point, given where you're getting paid

256
00:12:10,880 --> 00:12:12,920
Speaker 9: in the money markets, you know, and in the bond

257
00:12:13,000 --> 00:12:17,520
Speaker 9: market depending, it's okay to sit out. You know, there

258
00:12:17,559 --> 00:12:20,480
Speaker 9: are opportunities out there, but you look at valuations, there

259
00:12:20,480 --> 00:12:22,960
Speaker 9: are also risks. I mean, this is not a cloud

260
00:12:23,000 --> 00:12:26,240
Speaker 9: free sky, you know, go back to the weather metaphor, so,

261
00:12:26,520 --> 00:12:28,280
Speaker 9: you know, I look at this and I'm saying, if

262
00:12:28,320 --> 00:12:31,000
Speaker 9: I'm an older client or if I'm somebody who's really

263
00:12:31,080 --> 00:12:33,880
Speaker 9: risk adverse, I'm happy to sit at four or five

264
00:12:33,960 --> 00:12:37,880
Speaker 9: percent and just take it easy. You know, for the

265
00:12:37,920 --> 00:12:41,040
Speaker 9: first time, in a long time bonds are actually be

266
00:12:41,280 --> 00:12:45,800
Speaker 9: worth being in for their return. Not great, but it's safe, right,

267
00:12:46,040 --> 00:12:46,920
Speaker 9: that's important to.

268
00:12:46,880 --> 00:12:50,000
Speaker 2: Be fair, Paul, I am thinking about Munie's just so

269
00:12:50,040 --> 00:12:52,840
Speaker 2: you know, little diversification. That money sitting in Marcus is

270
00:12:53,080 --> 00:12:55,360
Speaker 2: you know, being very risk averse. I'm still thinking about it.

271
00:12:55,960 --> 00:12:58,480
Speaker 2: So where does that leave And you were mentioned sort

272
00:12:58,480 --> 00:13:01,000
Speaker 2: of the sickle goal versus value, except to growth versus value,

273
00:13:01,040 --> 00:13:03,360
Speaker 2: I should say, where does that leave you in thinking

274
00:13:03,360 --> 00:13:06,719
Speaker 2: about mid cap and small caps? Because if things are

275
00:13:06,880 --> 00:13:09,920
Speaker 2: okay ish, but there are worries but we're okay, that's

276
00:13:09,960 --> 00:13:12,600
Speaker 2: a really weird spot for the small caps.

277
00:13:12,840 --> 00:13:14,480
Speaker 6: It is a really weird spot.

278
00:13:14,520 --> 00:13:16,200
Speaker 9: And I think when you look at that, you have

279
00:13:16,280 --> 00:13:19,600
Speaker 9: to start thinking about sector exposure rather than you know,

280
00:13:19,800 --> 00:13:20,920
Speaker 9: company size.

281
00:13:21,160 --> 00:13:21,320
Speaker 6: You know.

282
00:13:21,360 --> 00:13:23,640
Speaker 9: And there's a lot of discussion out there about oh,

283
00:13:23,640 --> 00:13:26,080
Speaker 9: we've got MidCap, we've got small cap, you know.

284
00:13:26,160 --> 00:13:27,200
Speaker 6: I think you need to look at it.

285
00:13:27,240 --> 00:13:29,960
Speaker 9: Okay, is at a financial well they've been doing pretty well,

286
00:13:30,040 --> 00:13:32,920
Speaker 9: you know, and small cap or MidCap that matters, but

287
00:13:33,000 --> 00:13:36,000
Speaker 9: perhaps less than the fact that it's the financial sector

288
00:13:36,120 --> 00:13:39,040
Speaker 9: or the industrial sector or whatever the sector exposure is.

289
00:13:39,360 --> 00:13:43,000
Speaker 9: So I don't think it's a time for cap level discussion.

290
00:13:43,000 --> 00:13:45,360
Speaker 9: I think it's time for sector exposure discussion.

291
00:13:45,679 --> 00:13:47,800
Speaker 7: What are some of the sectors that screen well for

292
00:13:47,840 --> 00:13:48,240
Speaker 7: you guys.

293
00:13:48,800 --> 00:13:50,840
Speaker 9: Well, when you look at it, I think anything that's

294
00:13:50,880 --> 00:13:53,800
Speaker 9: exposed to growth. You look at technology, you know, one

295
00:13:53,800 --> 00:13:56,000
Speaker 9: of the things we're seeing is companies are trying to

296
00:13:56,120 --> 00:13:58,480
Speaker 9: manage their costs. I mean, one of the messages of

297
00:13:58,520 --> 00:14:01,079
Speaker 9: the jobs report was that no, we're not going to

298
00:14:01,120 --> 00:14:03,600
Speaker 9: be able to hire lots of people cheaply. So any

299
00:14:03,640 --> 00:14:08,679
Speaker 9: kind of technology that lets companies leverage capital expenditures rather

300
00:14:08,760 --> 00:14:10,880
Speaker 9: than hiring, I think that's going to go. And that

301
00:14:10,920 --> 00:14:13,920
Speaker 9: speaks directly to a lot of the megacap stocks. It's

302
00:14:13,920 --> 00:14:17,480
Speaker 9: probably a tailwind for the AI bubble. Excuse me, shouldn't

303
00:14:17,480 --> 00:14:19,680
Speaker 9: have said bubble, but you know, it's a tailwind for

304
00:14:19,720 --> 00:14:23,360
Speaker 9: the AI industry. You know, it's a tailwind for companies

305
00:14:23,440 --> 00:14:27,120
Speaker 9: that really enable companies to do more with less, you know.

306
00:14:27,160 --> 00:14:29,440
Speaker 9: At the same time, I think when you look at that,

307
00:14:29,440 --> 00:14:33,480
Speaker 9: that's also probably a tailwind for real estate because you've

308
00:14:33,520 --> 00:14:37,560
Speaker 9: got to put all these workers somewhere. And that indicates,

309
00:14:37,600 --> 00:14:40,400
Speaker 9: along with for example, Amazon going back to five days

310
00:14:40,400 --> 00:14:42,480
Speaker 9: a week, we may be through the worst of it

311
00:14:42,600 --> 00:14:45,680
Speaker 9: for the commercial real estate market that maybe early I

312
00:14:45,720 --> 00:14:47,360
Speaker 9: don't know, but you can see signs.

313
00:14:47,480 --> 00:14:48,920
Speaker 2: Well, we've been talking to a lot of commercial real

314
00:14:49,000 --> 00:14:51,240
Speaker 2: estate people and they've been saying something similar like, there's

315
00:14:51,240 --> 00:14:53,280
Speaker 2: still going to be that ten percent portion. That's not great,

316
00:14:53,320 --> 00:14:56,240
Speaker 2: but on the other hand, it's going to be okay.

317
00:14:56,480 --> 00:14:59,080
Speaker 2: So to your point about storms. So when you take

318
00:14:59,080 --> 00:15:02,360
Speaker 2: a look at that theme, though, there is a narrative

319
00:15:02,360 --> 00:15:04,440
Speaker 2: out there that once we get past the election, you

320
00:15:04,520 --> 00:15:06,640
Speaker 2: could see a lot of capex come into the market

321
00:15:06,680 --> 00:15:08,760
Speaker 2: because one might think that there would be more clarity

322
00:15:08,800 --> 00:15:11,440
Speaker 2: on state corporate taxes than tariffs. Do you see that

323
00:15:11,480 --> 00:15:15,520
Speaker 2: as a headwind tailwind for the economy or hope instead

324
00:15:15,560 --> 00:15:16,040
Speaker 2: of reality.

325
00:15:16,320 --> 00:15:17,480
Speaker 6: I think it's more hope.

326
00:15:17,520 --> 00:15:20,480
Speaker 9: But the thing I would say about that is we're

327
00:15:20,520 --> 00:15:23,680
Speaker 9: already seeing massive investment. I mean, again, one of the

328
00:15:23,720 --> 00:15:26,480
Speaker 9: things that's driving it is the demographics.

329
00:15:26,560 --> 00:15:28,000
Speaker 6: We don't have enough workers.

330
00:15:28,080 --> 00:15:30,520
Speaker 9: Yeah, the market is software, so you're being forced to

331
00:15:30,560 --> 00:15:34,720
Speaker 9: do capital investment. Regardless of who wins the election, you're

332
00:15:34,720 --> 00:15:36,680
Speaker 9: going to have a situation where we're going to be

333
00:15:36,720 --> 00:15:41,119
Speaker 9: continued to deglobalise. We're going to continue to restrict immigration,

334
00:15:41,640 --> 00:15:44,400
Speaker 9: and that's going to require more capital investment. We are

335
00:15:44,480 --> 00:15:47,120
Speaker 9: now in a position where we're generating most of the

336
00:15:47,560 --> 00:15:50,400
Speaker 9: natural guess, which means an enormous amount of the chemicals

337
00:15:50,400 --> 00:15:53,680
Speaker 9: industry is coming to the United States, and that requires

338
00:15:53,840 --> 00:15:55,240
Speaker 9: massive capital investment.

339
00:15:55,520 --> 00:15:57,920
Speaker 6: This is going to happen regardless of Washington.

340
00:15:58,800 --> 00:16:03,800
Speaker 4: So how do you discuss the political landscape the election

341
00:16:03,880 --> 00:16:05,600
Speaker 4: coming up this year? Because it's coming up in a

342
00:16:05,640 --> 00:16:08,280
Speaker 4: matter of days. It seems like I'm sure you're getting

343
00:16:08,280 --> 00:16:10,760
Speaker 4: some questions some comments from your financial advisors here.

344
00:16:11,240 --> 00:16:13,480
Speaker 9: One of the things that goes with my job is

345
00:16:13,560 --> 00:16:17,080
Speaker 9: getting questions from people on both sides. And every single

346
00:16:17,120 --> 00:16:20,040
Speaker 9: election cycle, I have people on both sides saying if

347
00:16:20,040 --> 00:16:21,960
Speaker 9: the other side wins, it's going to be a disaster.

348
00:16:22,880 --> 00:16:25,800
Speaker 9: And I've heard that for the past, you know, twenty years.

349
00:16:25,840 --> 00:16:28,280
Speaker 9: I've been doing this, and it's always been wrong. One

350
00:16:28,360 --> 00:16:30,560
Speaker 9: of the things that you have to remember as an

351
00:16:30,600 --> 00:16:35,520
Speaker 9: investor is the US economy is largely decoupled from Washington.

352
00:16:35,600 --> 00:16:38,000
Speaker 9: Any effects it has, it has at the margin.

353
00:16:38,160 --> 00:16:40,400
Speaker 2: But isn't that the irony though it's not because a

354
00:16:40,440 --> 00:16:42,600
Speaker 2: fiscal spend, so like a lot of the hiring is

355
00:16:42,640 --> 00:16:45,240
Speaker 2: in government workers, like the money that's being pumped in

356
00:16:45,520 --> 00:16:49,040
Speaker 2: is through government programs, et cetera. So in a weird way,

357
00:16:49,720 --> 00:16:50,080
Speaker 2: it's not.

358
00:16:50,960 --> 00:16:53,200
Speaker 9: But you're wrong, because how am I wrong? That is

359
00:16:53,240 --> 00:16:55,560
Speaker 9: a relatively small part of the economy, and that.

360
00:16:55,560 --> 00:16:56,560
Speaker 6: Is the workers.

361
00:16:57,240 --> 00:16:59,760
Speaker 2: Yeah, small part of the economy, and all the money.

362
00:16:59,600 --> 00:17:02,280
Speaker 9: Small part, yes, And you look at all of the

363
00:17:02,640 --> 00:17:05,240
Speaker 9: spend out there, And the question is even if you

364
00:17:05,520 --> 00:17:08,040
Speaker 9: even if you're correct, is that going to change up

365
00:17:08,080 --> 00:17:10,440
Speaker 9: or down significantly depending on the administration.

366
00:17:10,800 --> 00:17:14,000
Speaker 6: It's not. You know, they're not going to No.

367
00:17:13,920 --> 00:17:17,119
Speaker 2: It's going to keep growing that like, and deficits are

368
00:17:17,119 --> 00:17:17,480
Speaker 2: going to grow.

369
00:17:17,520 --> 00:17:19,880
Speaker 6: That is that a tailwind or a headwind for some economy?

370
00:17:19,920 --> 00:17:22,160
Speaker 6: It's a tailwind, okay, as we've seen.

371
00:17:22,200 --> 00:17:23,840
Speaker 9: I mean one of the interesting things, and I'll go

372
00:17:23,840 --> 00:17:26,480
Speaker 9: back to history a little bit, is you go back

373
00:17:26,520 --> 00:17:29,960
Speaker 9: to the seaquester and how that was supposed to cut

374
00:17:30,000 --> 00:17:32,719
Speaker 9: spending and stop the growth of the deficit. You know what,

375
00:17:32,800 --> 00:17:36,680
Speaker 9: it worked. So we've seen that before when federal spending cuts,

376
00:17:36,680 --> 00:17:39,280
Speaker 9: that slows growth down. But if you say the federal

377
00:17:39,320 --> 00:17:41,399
Speaker 9: spending is going to increase, that is a tailwind for

378
00:17:41,440 --> 00:17:42,480
Speaker 9: growth going forward.

379
00:17:43,440 --> 00:17:44,560
Speaker 7: So what do we do here?

380
00:17:44,600 --> 00:17:47,399
Speaker 4: If I'm the federal Reserve, I feel pretty comfortable that

381
00:17:47,560 --> 00:17:49,840
Speaker 4: just that fifty basis points and then you can kind

382
00:17:49,840 --> 00:17:51,199
Speaker 4: of do their twenty fives as they like.

383
00:17:51,680 --> 00:17:53,639
Speaker 7: I'm comfortable with that. Are you comfortable with that?

384
00:17:54,520 --> 00:17:57,159
Speaker 9: I think fifty basis points was a mistake. I was

385
00:17:57,240 --> 00:18:00,560
Speaker 9: really surprised they did that, and the reason I was prizes.

386
00:18:00,600 --> 00:18:01,639
Speaker 6: You've got two mandates.

387
00:18:01,680 --> 00:18:05,080
Speaker 9: Okay, you've got employment, which, as we've seen, slowed down

388
00:18:05,119 --> 00:18:07,560
Speaker 9: a little bit, but it's still at boom levels historically

389
00:18:07,680 --> 00:18:10,240
Speaker 9: and is coming back up. And then you've got inflation,

390
00:18:10,359 --> 00:18:12,200
Speaker 9: which is not where they want it to be. It's

391
00:18:12,240 --> 00:18:15,080
Speaker 9: moving there. But then you look at the components. Housing

392
00:18:15,200 --> 00:18:17,679
Speaker 9: is not going to We've been saying how I've been

393
00:18:17,720 --> 00:18:20,120
Speaker 9: saying housing is gonna Inflation is going to get down

394
00:18:20,160 --> 00:18:21,120
Speaker 9: for the past three years.

395
00:18:21,119 --> 00:18:22,560
Speaker 6: Guess what it hasn't.

396
00:18:23,160 --> 00:18:26,000
Speaker 9: And then you're gonna have inflationary things like you know,

397
00:18:26,160 --> 00:18:28,920
Speaker 9: reduced immigration. You look at wage growth that's still up.

398
00:18:29,480 --> 00:18:31,679
Speaker 9: So I think the Fed is going to end up

399
00:18:31,680 --> 00:18:33,840
Speaker 9: having to reverse sometime in the next year or two.

400
00:18:34,119 --> 00:18:37,399
Speaker 2: You mean stop cutting or hiking hiking. Wow, Okay, that

401
00:18:37,440 --> 00:18:40,639
Speaker 2: would be huge. That would be a huge change for

402
00:18:40,720 --> 00:18:42,600
Speaker 2: a portfolio allocation for the whole thing.

403
00:18:42,680 --> 00:18:44,679
Speaker 9: Yeah, I think they I think they mistake. I think

404
00:18:44,720 --> 00:18:47,520
Speaker 9: they made a mistake with the fifty basis points, you know.

405
00:18:47,600 --> 00:18:49,239
Speaker 9: But that said, when you look at it, why are

406
00:18:49,240 --> 00:18:51,040
Speaker 9: they gonna have to hike? It's going to be because

407
00:18:51,080 --> 00:18:54,800
Speaker 9: growth continues, and that's actually gonna be good for corporate earnings.

408
00:18:55,160 --> 00:18:55,840
Speaker 6: And when you.

409
00:18:55,720 --> 00:18:59,320
Speaker 9: Look at stock prices, there are in nominal terms, they're

410
00:18:59,320 --> 00:19:03,600
Speaker 9: not in real t so actually get you get more

411
00:19:03,640 --> 00:19:07,480
Speaker 9: of a headline return even as inflation continues to go up.

412
00:19:08,320 --> 00:19:09,720
Speaker 7: All right, very good, appreciate it.

413
00:19:09,960 --> 00:19:11,959
Speaker 4: Hopefully you guys have a good show for the remainder

414
00:19:12,280 --> 00:19:14,280
Speaker 4: of the day here today before people look, I think

415
00:19:14,280 --> 00:19:15,399
Speaker 4: making an early exit.

416
00:19:15,440 --> 00:19:15,720
Speaker 7: BREDC.

417
00:19:15,760 --> 00:19:19,840
Speaker 4: Millan, managing Principal Wealth and Investment Management and CIO at

418
00:19:19,880 --> 00:19:23,840
Speaker 4: Commonwealth of Financial Networks. We're here at their conference in Orlando, Florida.

419
00:19:24,240 --> 00:19:27,320
Speaker 4: They have over two thousand of their financial folks down

420
00:19:27,359 --> 00:19:29,080
Speaker 4: here talking about the markets.

421
00:19:30,600 --> 00:19:34,520
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

422
00:19:34,600 --> 00:19:38,080
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

423
00:19:38,119 --> 00:19:40,920
Speaker 1: Auto with the Bloomberg Business app. You can also listen

424
00:19:41,040 --> 00:19:44,120
Speaker 1: live on Amazon Alexa from our flagship New York station,

425
00:19:44,480 --> 00:19:49,440
Speaker 1: just Say Alexa, playing Bloomberg eleven thirty.

426
00:19:48,920 --> 00:19:51,680
Speaker 2: Sir Alex the alongside Paul Sweeney. This is Bloomberg Intelligence

427
00:19:51,720 --> 00:19:54,480
Speaker 2: Radio and we are broadcasting to you live from Orlando

428
00:19:54,560 --> 00:19:57,679
Speaker 2: at the World Center Mariot at Commonwealth's National Conference for

429
00:19:57,840 --> 00:20:01,119
Speaker 2: Financial Advisors. They're about two thousand and five over the

430
00:20:01,200 --> 00:20:03,919
Speaker 2: last couple of days getting expert guidance on how to

431
00:20:04,000 --> 00:20:07,399
Speaker 2: manage their clients and their businesses. And the theme of

432
00:20:07,440 --> 00:20:10,320
Speaker 2: the conference this year is the Future is Now, and

433
00:20:10,320 --> 00:20:13,040
Speaker 2: this is the tenth year the Bloomberg Radio has been

434
00:20:13,080 --> 00:20:16,320
Speaker 2: privileged to broadcast from the conference. Well, joining us now

435
00:20:16,359 --> 00:20:20,080
Speaker 2: here is a Rob Kain, investor, director of Alternative Investments

436
00:20:20,119 --> 00:20:22,920
Speaker 2: over at Commonwealth Financial Network. Now he joined back in

437
00:20:23,000 --> 00:20:26,480
Speaker 2: July of twenty thirteen as an alternative investment analyst, So

438
00:20:26,520 --> 00:20:28,600
Speaker 2: this is great. So we just had a great conversation

439
00:20:28,920 --> 00:20:31,399
Speaker 2: about the broader market and how to allocate, et cetera.

440
00:20:31,640 --> 00:20:34,720
Speaker 2: Where do alternative investments come in. What's the right percentage?

441
00:20:35,359 --> 00:20:38,280
Speaker 8: You've got to look at alternatives through a holistic approach,

442
00:20:38,280 --> 00:20:39,960
Speaker 8: in my view, and I always say, if you want

443
00:20:39,960 --> 00:20:42,520
Speaker 8: to start with a nice allocation, but ten percent to

444
00:20:42,600 --> 00:20:45,840
Speaker 8: really move that portfolio. But I think you can make

445
00:20:45,880 --> 00:20:49,040
Speaker 8: a good argument that twenty maybe even twenty five percent

446
00:20:49,080 --> 00:20:50,879
Speaker 8: for those higher net worth clients make a lot of

447
00:20:50,920 --> 00:20:52,680
Speaker 8: sense once you start.

448
00:20:52,440 --> 00:20:54,160
Speaker 6: Getting that endowment type model.

449
00:20:54,200 --> 00:20:56,359
Speaker 8: Unless you're able to source and you have that breadth

450
00:20:56,400 --> 00:20:59,200
Speaker 8: and skill to get those types of investments, largely, you're

451
00:20:59,200 --> 00:21:01,400
Speaker 8: going to be paying up for beta exposure. So that's

452
00:21:01,400 --> 00:21:03,399
Speaker 8: why we would say thirty percent is probably at the

453
00:21:03,440 --> 00:21:04,159
Speaker 8: high end you want to be.

454
00:21:05,160 --> 00:21:05,800
Speaker 7: Where do I go?

455
00:21:06,600 --> 00:21:08,159
Speaker 4: You know, growing up, it was for me it was

456
00:21:08,240 --> 00:21:10,919
Speaker 4: just you know, private equity, some hedge funds. Now private

457
00:21:11,000 --> 00:21:14,520
Speaker 4: credit is a big source of capital sieing crypto. Yeah, exactly,

458
00:21:14,560 --> 00:21:16,200
Speaker 4: So how do you how do you guys, I guess,

459
00:21:16,280 --> 00:21:18,760
Speaker 4: ease your clients into, ease your advisors into that space.

460
00:21:18,880 --> 00:21:20,960
Speaker 8: You know, I think private credit is almost the path

461
00:21:21,000 --> 00:21:25,560
Speaker 8: of least resistance because everyone understands that fixed income concept there.

462
00:21:25,840 --> 00:21:27,760
Speaker 8: And the story makes a lot of sense because we've

463
00:21:27,760 --> 00:21:31,120
Speaker 8: seen traditional lenders pull back here the banks giving what's

464
00:21:31,200 --> 00:21:33,119
Speaker 8: going on here, and these non traditional lenders are just

465
00:21:33,119 --> 00:21:35,800
Speaker 8: fueling the economy with this. At the end of the day,

466
00:21:36,000 --> 00:21:38,480
Speaker 8: it's debt. We need to ensure that they're able to

467
00:21:38,520 --> 00:21:40,800
Speaker 8: pay it back. And yes, we can command a premium

468
00:21:40,800 --> 00:21:43,200
Speaker 8: for those types of returns, but we need to ensure

469
00:21:43,240 --> 00:21:45,480
Speaker 8: that's going to come through, and that's looking at good

470
00:21:45,560 --> 00:21:46,720
Speaker 8: quality managed to do that.

471
00:21:47,119 --> 00:21:51,720
Speaker 2: So when you're talking to clients, is it fifty forty ten,

472
00:21:52,680 --> 00:21:54,200
Speaker 2: is it sixty thirty ten?

473
00:21:55,280 --> 00:21:57,480
Speaker 6: It all depends what the client's looking for.

474
00:21:57,600 --> 00:22:00,240
Speaker 8: So those more aggressive type investors, you're going to want

475
00:22:00,240 --> 00:22:02,560
Speaker 8: to pull from the equity bucket and look for returning

476
00:22:02,600 --> 00:22:06,240
Speaker 8: hands strategies such as private equity. On the fixed income side,

477
00:22:06,280 --> 00:22:08,080
Speaker 8: I think it makes a lot of sense to use

478
00:22:08,080 --> 00:22:10,520
Speaker 8: a private credit by peering from your loans or your

479
00:22:10,520 --> 00:22:13,600
Speaker 8: credit exposure in general, that will give you a nice balance.

480
00:22:13,880 --> 00:22:15,720
Speaker 8: I would say that's where you want to start and

481
00:22:15,760 --> 00:22:19,040
Speaker 8: almost look at the drivers of returns underneath, try to

482
00:22:19,040 --> 00:22:22,359
Speaker 8: match those where your traditional batas and exposures are and

483
00:22:22,400 --> 00:22:23,880
Speaker 8: then put those alls in there.

484
00:22:23,960 --> 00:22:25,960
Speaker 4: What types of products do you guys at common Wealth

485
00:22:26,040 --> 00:22:28,480
Speaker 4: have for your ris So we.

486
00:22:28,359 --> 00:22:31,399
Speaker 8: Have private equity, have private credit, we have hedge funds.

487
00:22:31,480 --> 00:22:34,000
Speaker 8: Right now, private equity is a big seller for us.

488
00:22:34,040 --> 00:22:36,840
Speaker 8: A lot of folks that gravitating towards that story. We've

489
00:22:36,840 --> 00:22:39,520
Speaker 8: also seen the decline and the public market opportunity, so

490
00:22:39,560 --> 00:22:41,840
Speaker 8: it's a larger opportunity sept for people to get into.

491
00:22:42,240 --> 00:22:44,840
Speaker 8: We're seeing folks like that, and particularly in the secondaries,

492
00:22:44,880 --> 00:22:47,679
Speaker 8: private equity secondaries, where there more clear insight into the

493
00:22:47,720 --> 00:22:50,440
Speaker 8: portfolio and that companies know what they need to get

494
00:22:50,440 --> 00:22:51,320
Speaker 8: to that next level.

495
00:22:51,720 --> 00:22:53,080
Speaker 6: Our advisor is really jumping out.

496
00:22:53,000 --> 00:22:54,680
Speaker 2: To the story that's interesting, and that's like a way

497
00:22:54,680 --> 00:22:57,040
Speaker 2: for private equity to offload. So it's like definitely an

498
00:22:57,119 --> 00:23:01,760
Speaker 2: burgeoning market. How do you think about the risks? One

499
00:23:01,840 --> 00:23:05,600
Speaker 2: might say that retail being invested in, say, private credit

500
00:23:05,600 --> 00:23:07,399
Speaker 2: has not been tested. Private creds been around for a

501
00:23:07,400 --> 00:23:09,240
Speaker 2: long time. It's been through cycles, but not with this

502
00:23:09,359 --> 00:23:11,800
Speaker 2: kind of money and investor base. How do you think

503
00:23:11,800 --> 00:23:12,600
Speaker 2: about the risks?

504
00:23:12,760 --> 00:23:14,800
Speaker 6: Well, I start with you think about private credit.

505
00:23:14,840 --> 00:23:17,359
Speaker 8: There's absolutely ton of risk and the biggest risk is

506
00:23:17,359 --> 00:23:19,640
Speaker 8: default can I get my income back? But a lot

507
00:23:19,640 --> 00:23:23,800
Speaker 8: of private credit managers are actually lending to private equity managers,

508
00:23:24,119 --> 00:23:27,000
Speaker 8: so they're able to navigate these companies through those complex

509
00:23:27,040 --> 00:23:30,680
Speaker 8: times by injecting equity in. There also the covenant protection

510
00:23:30,800 --> 00:23:33,600
Speaker 8: and private credit that's much stronger than you see in

511
00:23:33,600 --> 00:23:36,600
Speaker 8: the syndicated market, and that makes it really healthy and

512
00:23:36,600 --> 00:23:38,160
Speaker 8: the recovery rates a lot better.

513
00:23:38,000 --> 00:23:38,760
Speaker 6: In the long term.

514
00:23:38,960 --> 00:23:41,680
Speaker 7: All right, So how has it changed really?

515
00:23:41,920 --> 00:23:43,560
Speaker 4: I mean we've been here for ten years, coming to

516
00:23:43,640 --> 00:23:46,360
Speaker 4: your conference ten years ago versus today.

517
00:23:46,200 --> 00:23:47,080
Speaker 7: How's the discussion.

518
00:23:47,160 --> 00:23:50,840
Speaker 4: How's your role in terms of communicating with your ris here?

519
00:23:50,920 --> 00:23:52,919
Speaker 4: I mean, I'm guessing they want to talk to you

520
00:23:52,960 --> 00:23:54,400
Speaker 4: more often than ten ten years.

521
00:23:54,640 --> 00:23:55,199
Speaker 6: It's funny.

522
00:23:55,200 --> 00:23:57,359
Speaker 8: We joked that we were in the corner for a

523
00:23:57,400 --> 00:23:59,719
Speaker 8: long time no one wanted to talk alternatives, and then

524
00:23:59,800 --> 00:24:03,480
Speaker 8: being mainstream, we're having those conversations every day. Our advisors

525
00:24:03,520 --> 00:24:08,120
Speaker 8: have really embraced it. We've seen those allocations increase significantly

526
00:24:08,160 --> 00:24:10,280
Speaker 8: over the past few years, and then we had to

527
00:24:10,359 --> 00:24:13,119
Speaker 8: meet that demand with products, so Commonwealth we took a

528
00:24:13,160 --> 00:24:17,520
Speaker 8: lot of time to increase our offering set for our advisors.

529
00:24:17,040 --> 00:24:18,880
Speaker 6: And give them everything that they need now. So we're

530
00:24:18,960 --> 00:24:20,080
Speaker 6: very competitive in that space.

531
00:24:21,080 --> 00:24:24,399
Speaker 2: What do you think is the biggest misunderstanding when it

532
00:24:24,440 --> 00:24:25,640
Speaker 2: comes to alternatives.

533
00:24:26,760 --> 00:24:28,360
Speaker 6: A lot of folks think alternatives.

534
00:24:28,400 --> 00:24:30,960
Speaker 8: They think they see on the news these returns of

535
00:24:31,000 --> 00:24:34,280
Speaker 8: one thousand plus percent. I said, that's not your alternatives.

536
00:24:34,280 --> 00:24:37,800
Speaker 8: The alternatives have a role in the portfolio, usually that

537
00:24:38,000 --> 00:24:42,200
Speaker 8: uncorrelated or lack of correlation. They're not all returning answers

538
00:24:42,200 --> 00:24:45,240
Speaker 8: and having that discussion, particularly when you're talking to clients

539
00:24:45,280 --> 00:24:47,480
Speaker 8: as well. You could have had that discussion and frame.

540
00:24:47,359 --> 00:24:50,280
Speaker 2: That correctly, so meaning that investors come to and they're like,

541
00:24:50,320 --> 00:24:53,919
Speaker 2: all right, let's use my portfolio by big time exactly exactly.

542
00:24:54,640 --> 00:24:59,240
Speaker 4: We haven't seen are real or maybe ask another way,

543
00:24:59,280 --> 00:25:01,959
Speaker 4: have we seen our Are you concerned about seeing a

544
00:25:02,000 --> 00:25:05,320
Speaker 4: big correction in private equity, in private credit in headgshrends?

545
00:25:05,359 --> 00:25:06,720
Speaker 7: We haven't really seen that, have we?

546
00:25:06,720 --> 00:25:07,360
Speaker 6: We haven't.

547
00:25:07,400 --> 00:25:10,000
Speaker 8: You know, private credit is one area I'm staring at

548
00:25:10,000 --> 00:25:12,119
Speaker 8: and seeing what's going on there. We have seen non

549
00:25:12,160 --> 00:25:14,439
Speaker 8: accruise and defaults start picking up a little bit. The

550
00:25:14,520 --> 00:25:16,600
Speaker 8: interest rate cut will help that out. But if we

551
00:25:16,600 --> 00:25:19,360
Speaker 8: start thinking about those lower middle market type of companies,

552
00:25:19,680 --> 00:25:23,200
Speaker 8: they are highly indebted. The longer interest rates stay, the

553
00:25:23,200 --> 00:25:25,359
Speaker 8: more they're going to struggle. And that's the concern that

554
00:25:25,400 --> 00:25:28,879
Speaker 8: I'm watching the upper market. These type of companies usually

555
00:25:28,920 --> 00:25:32,159
Speaker 8: are more resilient, not tied to the economy like the

556
00:25:32,160 --> 00:25:34,479
Speaker 8: lower middle market, So I'm not as worried about that,

557
00:25:34,520 --> 00:25:35,560
Speaker 8: but lower middle marketing.

558
00:25:36,000 --> 00:25:38,560
Speaker 2: What other questions are you getting right now, either from

559
00:25:38,560 --> 00:25:41,320
Speaker 2: investors or from other arias well.

560
00:25:41,320 --> 00:25:43,600
Speaker 6: It's funny a lot of people say where do you go?

561
00:25:43,840 --> 00:25:45,920
Speaker 8: And one hand, I can make a strong argument where

562
00:25:45,920 --> 00:25:48,320
Speaker 8: the economy is going, and it's we're going to go

563
00:25:48,480 --> 00:25:50,200
Speaker 8: and look at the equity markets. We're going to perform

564
00:25:50,320 --> 00:25:51,760
Speaker 8: very well. On the other hand, you can see a

565
00:25:51,800 --> 00:25:54,280
Speaker 8: tiring economy. So a lot of people say, what do

566
00:25:54,320 --> 00:25:57,040
Speaker 8: you do in this? So we're having discussions about absolute

567
00:25:57,080 --> 00:26:00,840
Speaker 8: return hedge funds really not making any direction bets here,

568
00:26:00,880 --> 00:26:04,240
Speaker 8: just taking idiosyncratic ideas. Let's leverage those up a little

569
00:26:04,240 --> 00:26:06,200
Speaker 8: bit and get those returns. And that's what we're having

570
00:26:06,200 --> 00:26:09,560
Speaker 8: with those folks having those discussions. Longer term, we are

571
00:26:09,600 --> 00:26:12,960
Speaker 8: having that private equity discussion, and we're talking about the

572
00:26:13,000 --> 00:26:16,880
Speaker 8: public markets declining, the opportunity set where can you go

573
00:26:16,960 --> 00:26:18,000
Speaker 8: and private equity makes a.

574
00:26:18,000 --> 00:26:18,480
Speaker 6: Lot of sense.

575
00:26:18,880 --> 00:26:21,320
Speaker 7: Crypto is that in the conversation you didn't mention it.

576
00:26:21,359 --> 00:26:22,080
Speaker 2: That's actually interesting.

577
00:26:22,520 --> 00:26:26,639
Speaker 8: It's very it's very episodic, and when it comes a

578
00:26:26,680 --> 00:26:28,600
Speaker 8: lot of people will jump on there. But when they

579
00:26:28,640 --> 00:26:31,920
Speaker 8: start seeing those swings, a lot of people think they

580
00:26:32,000 --> 00:26:34,199
Speaker 8: have that stomach for that volatility, but at the end

581
00:26:34,200 --> 00:26:35,440
Speaker 8: of the day, they truly don't.

582
00:26:35,480 --> 00:26:38,040
Speaker 6: So we've seen that, Wayne net What about.

583
00:26:37,800 --> 00:26:42,000
Speaker 2: Gold and yeah, start there and then yeah, I know

584
00:26:42,400 --> 00:26:43,399
Speaker 2: we do like gold.

585
00:26:43,520 --> 00:26:45,840
Speaker 8: We're not gold Bug, so to speak. We think there

586
00:26:45,920 --> 00:26:47,720
Speaker 8: makes a lot of sense there. And the one thing

587
00:26:47,760 --> 00:26:50,359
Speaker 8: I always look at, if you look at the international buyers,

588
00:26:50,400 --> 00:26:52,320
Speaker 8: they're going to jump in, so there's a supply to

589
00:26:52,440 --> 00:26:54,760
Speaker 8: man factor in there. Obviously you have the interest rates

590
00:26:54,800 --> 00:26:57,680
Speaker 8: I tied in there. Gold has been on a great tear.

591
00:26:58,119 --> 00:26:59,720
Speaker 8: We do think it makes a lot of sense in

592
00:26:59,720 --> 00:27:01,960
Speaker 8: the polio still and we have to look there's a

593
00:27:02,000 --> 00:27:05,080
Speaker 8: lot of volatility risks out there, so I think Gold

594
00:27:05,240 --> 00:27:06,840
Speaker 8: should say the portfolio.

595
00:27:06,440 --> 00:27:07,159
Speaker 6: For the long term.

596
00:27:07,240 --> 00:27:08,760
Speaker 7: All right, Rob, thank you so much for joining us.

597
00:27:08,760 --> 00:27:09,880
Speaker 7: Really appreciate it. Rob Kane.

598
00:27:09,880 --> 00:27:13,159
Speaker 4: He's the director Alternative Investments at Commonwealth Financial Network.

599
00:27:14,600 --> 00:27:18,520
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

600
00:27:18,600 --> 00:27:22,080
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

601
00:27:22,119 --> 00:27:25,320
Speaker 1: Auto with the Bloomberg Business. You can also listen live

602
00:27:25,400 --> 00:27:28,560
Speaker 1: on Amazon Alexa from our flagship New York station, Just

603
00:27:28,640 --> 00:27:33,440
Speaker 1: Say Alexa playing Bloomberg eleven thirty.

604
00:27:32,920 --> 00:27:34,119
Speaker 7: Alex Steel, Paul Sweeney.

605
00:27:34,160 --> 00:27:36,720
Speaker 4: We are broadcasting live in Orlando at the World Center

606
00:27:36,760 --> 00:27:41,560
Speaker 4: Mariot at Commonwealth's National Conference for Financial Advisors. Joining us

607
00:27:41,560 --> 00:27:45,120
Speaker 4: here this morning is Peter Aslink, Senior Vice President, head

608
00:27:45,160 --> 00:27:49,399
Speaker 4: of advisory solutions for Commonwealth Financial Network. Peter, talk to

609
00:27:49,480 --> 00:27:51,879
Speaker 4: us first of all, thanks for joining us here and

610
00:27:52,800 --> 00:27:55,280
Speaker 4: in various processes going to their meetings before they bug

611
00:27:55,280 --> 00:27:56,400
Speaker 4: out for the hurricane.

612
00:27:56,680 --> 00:27:57,480
Speaker 7: Talk to us about the.

613
00:27:57,520 --> 00:28:01,640
Speaker 4: Portfolio management platform you guys pro for your RIS.

614
00:28:01,960 --> 00:28:05,320
Speaker 10: Sure, absolutely so. We have two main platforms at Commonwealth.

615
00:28:05,400 --> 00:28:09,000
Speaker 10: One is an advisor discretion or DIY platform where they

616
00:28:09,000 --> 00:28:14,240
Speaker 10: are responsible for all trading oversight, full discretion into portfolios, management,

617
00:28:14,280 --> 00:28:17,160
Speaker 10: choosing securities, et cetera. The complement to that is called

618
00:28:17,200 --> 00:28:21,320
Speaker 10: PPS Select where it's a home office discretionary portfolio where

619
00:28:22,200 --> 00:28:25,359
Speaker 10: advisors can outsource all management responsibilities to us.

620
00:28:25,800 --> 00:28:28,840
Speaker 2: Oh okay, so would you be in place of like

621
00:28:28,920 --> 00:28:31,560
Speaker 2: AI then, because like isn't that what AA is supposed

622
00:28:31,600 --> 00:28:31,760
Speaker 2: to do?

623
00:28:32,640 --> 00:28:37,160
Speaker 10: It is, and what we're doing has developed new solutions. Really,

624
00:28:37,200 --> 00:28:39,600
Speaker 10: what we're trying to do is redefine the way advisors

625
00:28:39,640 --> 00:28:42,520
Speaker 10: that think and work with their client relationships. Where if

626
00:28:42,520 --> 00:28:45,000
Speaker 10: you look at the investment management industry over the last

627
00:28:45,040 --> 00:28:49,320
Speaker 10: twenty years, by and large, it's mostly become commoditized, right

628
00:28:49,440 --> 00:28:52,520
Speaker 10: where if you look at the assets in the universe,

629
00:28:52,560 --> 00:28:56,400
Speaker 10: approximately seventy five percent of model based assets follow ten

630
00:28:56,480 --> 00:28:59,680
Speaker 10: providers and in large part a lot of those providers

631
00:28:59,680 --> 00:29:03,400
Speaker 10: are their own proprietary strategies. So we've taken a bit

632
00:29:03,400 --> 00:29:05,440
Speaker 10: of a different approach with our strategy, where it's a

633
00:29:05,480 --> 00:29:08,880
Speaker 10: multi manager approach. We have over one hundred different models,

634
00:29:09,400 --> 00:29:14,280
Speaker 10: and most recently we're announcing some new enhanced features, beginning

635
00:29:14,360 --> 00:29:18,040
Speaker 10: with personalized indexing, which is more commonly referred as direct indexing,

636
00:29:18,560 --> 00:29:21,640
Speaker 10: and as you know direct indexing, the features that come

637
00:29:21,720 --> 00:29:28,000
Speaker 10: with that, it's greater personalization, customization. Tax efficiency really takes

638
00:29:28,040 --> 00:29:33,640
Speaker 10: it from an environment where advisors have moved into largely

639
00:29:33,680 --> 00:29:37,600
Speaker 10: adopting one to five portfolios where they assign clients into

640
00:29:37,640 --> 00:29:42,480
Speaker 10: one of those allocations, to now expanding to an infinite

641
00:29:42,640 --> 00:29:48,160
Speaker 10: number of possibilities and allocations through utilizing personalized indexing alongside

642
00:29:48,520 --> 00:29:51,480
Speaker 10: using it as the core alongside other elements of the

643
00:29:51,520 --> 00:29:53,440
Speaker 10: portfolio with mutual funds and ETFs.

644
00:29:53,720 --> 00:29:56,720
Speaker 4: So, I mean, that's some of the talk we hear

645
00:29:56,760 --> 00:29:59,520
Speaker 4: at these conferences is that you want your ri as

646
00:29:59,520 --> 00:30:02,080
Speaker 4: your advice be spending more time with the clients, less

647
00:30:02,120 --> 00:30:04,200
Speaker 4: time with plumbing and all that kind of stuff. So

648
00:30:04,240 --> 00:30:09,600
Speaker 4: how does do they do most to I guess, outsource

649
00:30:09,880 --> 00:30:12,080
Speaker 4: the management of those of that capital their clients.

650
00:30:12,080 --> 00:30:12,800
Speaker 7: That's great question.

651
00:30:12,840 --> 00:30:15,800
Speaker 10: So two thirds of our advisors outsource and utilize the

652
00:30:15,800 --> 00:30:19,880
Speaker 10: PPS Select platform. We've run a number of different analyzes,

653
00:30:20,040 --> 00:30:24,320
Speaker 10: and the advisors who predominantly use an outsourced solution at

654
00:30:24,360 --> 00:30:28,160
Speaker 10: Commonwealth on average grow faster and they receive better performance.

655
00:30:28,200 --> 00:30:30,240
Speaker 10: And that actually coincides with a lot of the literature

656
00:30:30,240 --> 00:30:33,280
Speaker 10: that you see across the industry where you know, it's

657
00:30:33,320 --> 00:30:35,840
Speaker 10: not rocket science if you're spending more time in front

658
00:30:35,840 --> 00:30:39,080
Speaker 10: of clients, engaging with them, servicing them, really driving the

659
00:30:39,320 --> 00:30:43,600
Speaker 10: advisor alpha piece which comes through financial management or financial

660
00:30:43,640 --> 00:30:46,120
Speaker 10: planning as opposed to focusing your time and energy on

661
00:30:46,160 --> 00:30:49,959
Speaker 10: picking stocks and mutual funds on a daily basis. You know,

662
00:30:50,000 --> 00:30:53,600
Speaker 10: it's pretty evident that you're going to grow faster and

663
00:30:53,640 --> 00:30:57,160
Speaker 10: receive better performance. It's kind of like a general contractor, right,

664
00:30:57,200 --> 00:30:58,920
Speaker 10: they don't want to if you're building a house, You're

665
00:30:58,920 --> 00:31:01,200
Speaker 10: not going to focus on every single element. You often

666
00:31:01,240 --> 00:31:05,200
Speaker 10: outsource and sub least two different subcontractors.

667
00:31:05,240 --> 00:31:07,440
Speaker 2: So then how are you guys using AI.

668
00:31:08,440 --> 00:31:12,160
Speaker 10: AI comes in different forms. As it stands today, it's

669
00:31:12,240 --> 00:31:17,640
Speaker 10: mostly on the technology side, and it hasn't really other

670
00:31:17,720 --> 00:31:21,680
Speaker 10: than direct indexing hasn't really made a major splash and

671
00:31:22,000 --> 00:31:27,000
Speaker 10: what we're doing from a management perspective. But if you

672
00:31:27,040 --> 00:31:28,960
Speaker 10: extend that, I mean we are looking at things and

673
00:31:29,320 --> 00:31:32,560
Speaker 10: going to be rolling out next year tax transition of portfolios,

674
00:31:32,640 --> 00:31:36,560
Speaker 10: so seamless tax transition, or an advisor could pick one

675
00:31:36,560 --> 00:31:38,920
Speaker 10: of our models, establish a capital gain budget and then

676
00:31:38,960 --> 00:31:41,760
Speaker 10: it'll seamlessly tax transition over to the model.

677
00:31:41,760 --> 00:31:43,960
Speaker 2: And that would be AI and technology that.

678
00:31:43,920 --> 00:31:45,520
Speaker 7: Would do that, yes, exactly.

679
00:31:46,400 --> 00:31:48,560
Speaker 10: In addition to that, there's tax overlay, which is the

680
00:31:48,600 --> 00:31:51,880
Speaker 10: constant monitoring of portfolios to seek out loss opportunities that

681
00:31:51,920 --> 00:31:54,200
Speaker 10: can be used to offset gains in the portfolio.

682
00:31:54,600 --> 00:31:56,920
Speaker 2: So imagine tax loss harvesting.

683
00:31:56,720 --> 00:31:59,200
Speaker 10: Constant tax loss harvesting. So think of an environment next

684
00:31:59,240 --> 00:32:01,440
Speaker 10: year where advisor sits down with their client and says,

685
00:32:01,920 --> 00:32:04,400
Speaker 10: I was able to generate forty thousand dollars in losses

686
00:32:04,400 --> 00:32:06,640
Speaker 10: to offset of forty thousand dollars gain in twenty twenty

687
00:32:06,640 --> 00:32:08,200
Speaker 10: four in an up market.

688
00:32:08,520 --> 00:32:08,720
Speaker 6: Right.

689
00:32:08,760 --> 00:32:10,600
Speaker 10: So these are some of the capabilities that we're going

690
00:32:10,640 --> 00:32:13,480
Speaker 10: to be launching next year that really takes things to

691
00:32:13,520 --> 00:32:15,480
Speaker 10: the next level from a money management perspective.

692
00:32:15,760 --> 00:32:17,720
Speaker 4: One of the real interesting growth stories, and I think

693
00:32:17,760 --> 00:32:20,560
Speaker 4: just global financial services over the last decade has been

694
00:32:20,560 --> 00:32:25,760
Speaker 4: the growth of ETFs. How do your advisors use ETFs

695
00:32:25,760 --> 00:32:28,160
Speaker 4: and is it at the expense of maybe traditional mutual funds.

696
00:32:28,280 --> 00:32:31,400
Speaker 10: Absolutely, I mean it's a trend that I think the

697
00:32:31,440 --> 00:32:35,960
Speaker 10: ETF assets in the marketplace have recently surpassed mutual fund

698
00:32:35,960 --> 00:32:39,320
Speaker 10: assets and that they do serve a place. But honestly,

699
00:32:39,360 --> 00:32:43,000
Speaker 10: I think directing indexing is going to overtake ETFs where

700
00:32:43,000 --> 00:32:46,120
Speaker 10: it's one of the fastest growing spaces. There's additional benefits

701
00:32:46,160 --> 00:32:49,320
Speaker 10: beyond because you can tax lost harvest in an up

702
00:32:49,400 --> 00:32:53,000
Speaker 10: market and as well as a down market. For instance,

703
00:32:53,040 --> 00:32:55,000
Speaker 10: the S and P five hundred. In any given year,

704
00:32:55,080 --> 00:32:57,840
Speaker 10: thirty five percent of the holdings in the index are down.

705
00:32:58,200 --> 00:33:00,840
Speaker 10: You can't harvest those losses in a mutual funder ETF.

706
00:33:00,880 --> 00:33:03,560
Speaker 10: You can do so when you own them individually through

707
00:33:03,600 --> 00:33:06,960
Speaker 10: a direct index and a separately managed account. So I

708
00:33:07,040 --> 00:33:10,160
Speaker 10: really see direct indexing as being the future for investment management.

709
00:33:10,520 --> 00:33:14,080
Speaker 7: Just for me, define direct index Oh, thank you sure, sir.

710
00:33:14,440 --> 00:33:15,120
Speaker 7: A great question.

711
00:33:15,720 --> 00:33:19,520
Speaker 10: So direct indexing is owning through a separately managed account

712
00:33:19,520 --> 00:33:21,840
Speaker 10: the individual securities of an index like the S and

713
00:33:21,920 --> 00:33:24,840
Speaker 10: P five hundred. Right, So, with a mutual funder ETF

714
00:33:24,880 --> 00:33:28,680
Speaker 10: it's a pooled vehicle of securities. Direct indexing, it's a

715
00:33:28,720 --> 00:33:32,239
Speaker 10: sampling of securities from that index, oftentimes the top one

716
00:33:32,280 --> 00:33:35,520
Speaker 10: hundred to one hundred and fifty names that you own outright.

717
00:33:35,880 --> 00:33:38,200
Speaker 10: So at any given time, some of those names are

718
00:33:38,280 --> 00:33:41,440
Speaker 10: going to be at a loss predominantly hopefully majority of

719
00:33:41,480 --> 00:33:42,960
Speaker 10: them are going to be at a gain, but you

720
00:33:43,000 --> 00:33:45,960
Speaker 10: can harvest the losses to offset gains over time, and

721
00:33:46,000 --> 00:33:48,720
Speaker 10: it's all done through advanced technology.

722
00:33:49,280 --> 00:33:53,280
Speaker 2: Amazing. When you talk to advisors, what are the things

723
00:33:53,320 --> 00:33:54,800
Speaker 2: do they want you to help them with?

724
00:33:55,640 --> 00:33:59,440
Speaker 10: I mean, it really is across the spectrum, everything from

725
00:33:59,600 --> 00:34:02,040
Speaker 10: what time of fee exposure or fee arrangements should I

726
00:34:02,040 --> 00:34:05,680
Speaker 10: have with my clients, to what type of outsourcing capabilities

727
00:34:06,440 --> 00:34:09,759
Speaker 10: are on the platform. But what we've seen recently is

728
00:34:09,840 --> 00:34:13,839
Speaker 10: advisors really looking up into higher net worth and ultra

729
00:34:13,920 --> 00:34:18,640
Speaker 10: higher networth clients. They demand and are asking for allocations

730
00:34:18,640 --> 00:34:21,880
Speaker 10: and securities that go well beyond just traditional mutual funds

731
00:34:21,880 --> 00:34:25,680
Speaker 10: ETFs and a smattering of bonds and equities. So we're

732
00:34:25,680 --> 00:34:28,240
Speaker 10: seeing all to play a bigger role in that space.

733
00:34:28,840 --> 00:34:33,560
Speaker 10: Direct indexing, as I mentioned, just more sophistication beyond the

734
00:34:33,680 --> 00:34:37,480
Speaker 10: robot commoditized exposure that you see a lot of advisors

735
00:34:38,120 --> 00:34:39,840
Speaker 10: using historically, what's.

736
00:34:39,680 --> 00:34:41,800
Speaker 4: The best way have you seen in your career? Kamath

737
00:34:41,880 --> 00:34:44,080
Speaker 4: for an advisor to grow his or her business.

738
00:34:45,719 --> 00:34:49,600
Speaker 10: The most successful advisors that I've seen have really gone

739
00:34:49,600 --> 00:34:52,879
Speaker 10: through a segmentation exercise where they segment it out into

740
00:34:52,920 --> 00:34:56,279
Speaker 10: ABC and D clients. Generally, the clients are in the

741
00:34:56,320 --> 00:34:58,480
Speaker 10: A and B bracket are bringing in the majority of

742
00:34:58,480 --> 00:35:01,680
Speaker 10: the revenues, and they look towards the C and D

743
00:35:01,800 --> 00:35:05,919
Speaker 10: clients as a good outsourced option. So spending your time

744
00:35:05,920 --> 00:35:10,960
Speaker 10: and energy aspects of your business while outsourcing perhaps some

745
00:35:11,000 --> 00:35:14,440
Speaker 10: of those clients that aren't generating as much revenue for

746
00:35:14,719 --> 00:35:15,280
Speaker 10: your practice.

747
00:35:15,280 --> 00:35:18,479
Speaker 2: When you say these CND clients outsourcing, what does that.

748
00:35:18,480 --> 00:35:20,960
Speaker 10: Mean Generally smaller accounts.

749
00:35:20,960 --> 00:35:24,920
Speaker 2: So they outsourced to where either.

750
00:35:24,719 --> 00:35:27,680
Speaker 10: An internal discretionary platform that we offer or one of

751
00:35:27,719 --> 00:35:31,040
Speaker 10: the other TAMP providers turn key asset manager platforms that

752
00:35:31,080 --> 00:35:33,200
Speaker 10: we have available through our network.

753
00:35:33,719 --> 00:35:36,800
Speaker 4: How do new advisors grow their business? I mean, is

754
00:35:36,800 --> 00:35:39,719
Speaker 4: there a strategy for successfully growing your business from the

755
00:35:39,760 --> 00:35:41,760
Speaker 4: ground though it's.

756
00:35:41,680 --> 00:35:44,120
Speaker 10: Very difficult these days to go the cold calling method,

757
00:35:44,239 --> 00:35:47,160
Speaker 10: as you quite know. So what we've seen is a

758
00:35:47,160 --> 00:35:50,040
Speaker 10: lot of advisors and we have a network that we've

759
00:35:50,080 --> 00:35:53,640
Speaker 10: created for anybody interested in getting into the business, will

760
00:35:53,680 --> 00:35:57,200
Speaker 10: actually pair them up with existing offices. As you've probably

761
00:35:57,200 --> 00:36:00,239
Speaker 10: seen today at or this weekend at our conference, we

762
00:36:00,320 --> 00:36:03,560
Speaker 10: have a number of universities that have also been represented.

763
00:36:03,640 --> 00:36:09,759
Speaker 10: So we're continuing to expand our network, both across graduates

764
00:36:09,800 --> 00:36:15,520
Speaker 10: as well as undergrad areas to continue to expand that network.

765
00:36:15,560 --> 00:36:18,080
Speaker 2: What's the interest level for young kids.

766
00:36:18,200 --> 00:36:18,799
Speaker 7: We're seeing it.

767
00:36:19,680 --> 00:36:22,520
Speaker 10: I would say in the past few years it's picked

768
00:36:22,600 --> 00:36:25,480
Speaker 10: up pretty significantly. It seems like from most grads it's

769
00:36:25,560 --> 00:36:31,120
Speaker 10: either financial services or tech right, So I'd say there

770
00:36:31,160 --> 00:36:32,760
Speaker 10: was a bit of a lull after the two thousand

771
00:36:32,760 --> 00:36:35,399
Speaker 10: and eight financial crisis, but in recent years we've seen

772
00:36:35,440 --> 00:36:37,400
Speaker 10: a significant uptake and interest. Absolutely.

773
00:36:37,600 --> 00:36:39,359
Speaker 4: And what's the activity I know it's always I've been

774
00:36:39,360 --> 00:36:41,120
Speaker 4: in the business since mid eighties. It's always been a

775
00:36:41,160 --> 00:36:45,040
Speaker 4: decision for advisors at wirehouses like a Merrill Lynch or

776
00:36:45,080 --> 00:36:47,880
Speaker 4: something whether to go on the independent route. How has

777
00:36:47,880 --> 00:36:48,800
Speaker 4: that changed during.

778
00:36:48,600 --> 00:36:50,800
Speaker 6: Your career, Yeah, it's.

779
00:36:52,680 --> 00:36:54,360
Speaker 7: Again in recent years.

780
00:36:55,400 --> 00:36:57,239
Speaker 10: I do a lot of the prospect visits where it's

781
00:36:57,280 --> 00:36:59,759
Speaker 10: newer advisors coming in and just trying to understand our

782
00:37:00,040 --> 00:37:04,279
Speaker 10: business model. More and more, we're seeing advisors coming from

783
00:37:04,280 --> 00:37:07,120
Speaker 10: the wirehouse channel. Whereas you go back ten to fifteen

784
00:37:07,200 --> 00:37:10,000
Speaker 10: years and it was mostly transitions from the IBD space.

785
00:37:10,440 --> 00:37:13,680
Speaker 10: But advisors are in the wire space are looking just

786
00:37:13,680 --> 00:37:15,560
Speaker 10: for more independence. They don't want to be told what

787
00:37:15,640 --> 00:37:19,040
Speaker 10: products to sell, right, They want the entire spectrum, the

788
00:37:19,160 --> 00:37:21,359
Speaker 10: entire universe of the options. They want to do what's

789
00:37:21,360 --> 00:37:24,000
Speaker 10: best for their clients, not necessarily what's in the best

790
00:37:24,040 --> 00:37:26,880
Speaker 10: interests of their partner firm. So that's what the independent

791
00:37:26,960 --> 00:37:29,400
Speaker 10: channel really offers them as full capabilities.

792
00:37:29,520 --> 00:37:32,040
Speaker 2: All right, Peter, thanks lot, really interesting. Thank you so much.

793
00:37:32,200 --> 00:37:36,960
Speaker 2: Peterlaesla excuse me SPP, head of Advisory Solutions, a Commonwealth

794
00:37:36,960 --> 00:37:40,320
Speaker 2: financial network kind of working us through a portfolio management

795
00:37:40,360 --> 00:37:44,400
Speaker 2: platform for Commonwealth advisors there. Thank you so very much.

796
00:37:46,000 --> 00:37:49,879
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

797
00:37:49,960 --> 00:37:53,520
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

798
00:37:53,520 --> 00:37:56,320
Speaker 1: Auto with the Bloomberg Business app. You can also listen

799
00:37:56,400 --> 00:37:59,520
Speaker 1: live on Amazon Alexa from our flagship New York station

800
00:38:00,320 --> 00:38:02,240
Speaker 1: Alexa playing Bloomberg eleven.

801
00:38:04,640 --> 00:38:08,160
Speaker 2: I'm Alexi alongside Paul Sweeney. This is Bloomberg Intelligence Radio.

802
00:38:08,239 --> 00:38:10,920
Speaker 2: We're broadcasting to you from cloudy, albeit a little rainy

803
00:38:10,920 --> 00:38:14,320
Speaker 2: and windy Orlando, Florida. We are at the Commonwealth's National

804
00:38:14,360 --> 00:38:18,600
Speaker 2: Conference for Financial Advisors. The theme is the Future is Now,

805
00:38:18,760 --> 00:38:21,600
Speaker 2: where Commonwealth brings lots of advisors together and they talk

806
00:38:21,640 --> 00:38:24,399
Speaker 2: and give ideas and they help them guide them through

807
00:38:24,440 --> 00:38:28,120
Speaker 2: the market, guide them through this volatility and this uncertain time. Well,

808
00:38:28,200 --> 00:38:30,720
Speaker 2: joining us now for his take is Chris Pasiano, Senior

809
00:38:30,760 --> 00:38:35,080
Speaker 2: portfolio manager at Commonwealth Financial Network. So when you talk

810
00:38:35,160 --> 00:38:37,640
Speaker 2: to other advisors and you guys, are you know, hanging

811
00:38:37,640 --> 00:38:39,800
Speaker 2: out doing what advisors do, and you talk about the

812
00:38:39,880 --> 00:38:43,600
Speaker 2: volatility and you talk about all the uncertainty out there,

813
00:38:43,640 --> 00:38:46,120
Speaker 2: is there a consensus about where markets are going?

814
00:38:47,000 --> 00:38:47,160
Speaker 1: Oh?

815
00:38:47,239 --> 00:38:49,640
Speaker 11: I don't think there's a consensus at this point. But

816
00:38:49,760 --> 00:38:52,600
Speaker 11: the advice that we give a Commonwealth remains the same

817
00:38:52,680 --> 00:38:56,160
Speaker 11: no matter what the consensus is, and that's keep calm

818
00:38:56,160 --> 00:39:00,759
Speaker 11: and carry on. There's there's always opportunities the market, no

819
00:39:00,840 --> 00:39:05,240
Speaker 11: matter what's going on, and sometimes volatility presents those best

820
00:39:05,280 --> 00:39:09,239
Speaker 11: opportunities that you can add value to clients' portfolios. So

821
00:39:09,960 --> 00:39:12,799
Speaker 11: I think in general, the consensus right now in the

822
00:39:12,840 --> 00:39:17,880
Speaker 11: marketplace is that the FED will successfully and guide the

823
00:39:17,960 --> 00:39:20,719
Speaker 11: economy to a soft landing and inflation's moving in the

824
00:39:20,800 --> 00:39:24,360
Speaker 11: right direction, and people view that as a supportive background

825
00:39:24,480 --> 00:39:25,240
Speaker 11: for the markets.

826
00:39:25,640 --> 00:39:29,480
Speaker 7: How important are earnings for your market? Call Chriscus.

827
00:39:29,480 --> 00:39:31,399
Speaker 4: We're gonna have JP Morgan is gonna be kicking off

828
00:39:31,640 --> 00:39:33,680
Speaker 4: this Friday, another round of earning season. We'll get another

829
00:39:33,719 --> 00:39:36,040
Speaker 4: lookout Corporate America is doing. How do you frame out

830
00:39:36,040 --> 00:39:36,960
Speaker 4: earnings for your clients.

831
00:39:37,120 --> 00:39:40,520
Speaker 11: Yes, so we're encouraged by earnings at this point, but

832
00:39:40,640 --> 00:39:43,600
Speaker 11: it is an important element of the future direction of

833
00:39:43,640 --> 00:39:47,400
Speaker 11: the market. We look at our acid class decisions, and

834
00:39:47,480 --> 00:39:53,280
Speaker 11: any investment decisions have two pieces to valuation and in fundamentals,

835
00:39:53,680 --> 00:39:56,919
Speaker 11: you need both of those to have good long term investments.

836
00:39:57,560 --> 00:40:01,280
Speaker 11: So we've been encouraged by earnings growth. Look at twenty

837
00:40:01,400 --> 00:40:04,560
Speaker 11: twenty not surprisingly because the global economy was shut down,

838
00:40:04,560 --> 00:40:08,319
Speaker 11: earnings dropped. We had one good year of solid earnings growth.

839
00:40:08,400 --> 00:40:11,480
Speaker 11: These the economy reopened, and then in twenty twenty two.

840
00:40:11,520 --> 00:40:16,280
Speaker 11: In twenty twenty three, Corporate America struggled with inflationary pressures,

841
00:40:16,360 --> 00:40:20,719
Speaker 11: cost increases, and earnings flat lined. The rally we saw

842
00:40:20,880 --> 00:40:23,040
Speaker 11: over the last couple of years has then been due

843
00:40:23,080 --> 00:40:26,800
Speaker 11: to valuations expanding But if you look now, as you mentioned,

844
00:40:26,800 --> 00:40:29,440
Speaker 11: we're about start earnings period for the third quarter at

845
00:40:29,440 --> 00:40:32,000
Speaker 11: the end of the week right now, consensus estimates are

846
00:40:32,040 --> 00:40:36,080
Speaker 11: for ten percent growth this year, and even better from

847
00:40:36,200 --> 00:40:40,000
Speaker 11: an earnings perspective for next year, fifteen percent consensus earnings growth.

848
00:40:40,120 --> 00:40:41,480
Speaker 2: And is that going to be in mags seven or

849
00:40:41,560 --> 00:40:42,799
Speaker 2: is that going to be in the other four hundred

850
00:40:42,880 --> 00:40:43,720
Speaker 2: ninety three six.

851
00:40:43,840 --> 00:40:46,320
Speaker 11: This is the best part I think for the market

852
00:40:46,360 --> 00:40:50,200
Speaker 11: going forward, is that for the time being, all that

853
00:40:50,200 --> 00:40:52,600
Speaker 11: earnings growth has been in the magnificent seven. So if

854
00:40:52,600 --> 00:40:55,440
Speaker 11: you come back to what I said, valuations fundamentals, that's

855
00:40:55,480 --> 00:40:58,680
Speaker 11: why those stocks have acted so well. But what we're

856
00:40:58,719 --> 00:41:02,399
Speaker 11: going to see next year is the beginning of the

857
00:41:02,440 --> 00:41:06,160
Speaker 11: divergence within earnings growth start to close. So you're going

858
00:41:06,239 --> 00:41:08,319
Speaker 11: to start to see better earnings growth from the rest

859
00:41:08,360 --> 00:41:11,439
Speaker 11: of the market, and we believe that that will lead

860
00:41:11,480 --> 00:41:12,080
Speaker 11: to better.

861
00:41:11,920 --> 00:41:12,880
Speaker 6: Breadth in the market.

862
00:41:13,200 --> 00:41:15,440
Speaker 11: So you'll see not only the other four ninety three

863
00:41:15,520 --> 00:41:18,839
Speaker 11: start to work, but small cap mid cap they should

864
00:41:18,880 --> 00:41:21,760
Speaker 11: begin to participate as that earnings gap narrows.

865
00:41:22,040 --> 00:41:24,440
Speaker 4: How do you guys feel about just real simply stocks

866
00:41:24,520 --> 00:41:27,040
Speaker 4: versus bonds here because I can now get a decent

867
00:41:27,120 --> 00:41:29,040
Speaker 4: year to my two year government treasury, I can if

868
00:41:29,040 --> 00:41:30,239
Speaker 4: I want to take a little credit risk, I can

869
00:41:30,239 --> 00:41:31,000
Speaker 4: do a little bit more.

870
00:41:31,560 --> 00:41:34,560
Speaker 11: Bonds are relevant. That's how we fail about the equity

871
00:41:34,560 --> 00:41:37,240
Speaker 11: bond mix. But we don't try to time the market

872
00:41:37,239 --> 00:41:40,200
Speaker 11: at Commonwealth. We think it's really hard, if not impossible.

873
00:41:40,360 --> 00:41:43,960
Speaker 11: So we believe that you should have allocations to whatever

874
00:41:44,000 --> 00:41:47,440
Speaker 11: the appropriate equity target is for your client and fixed income.

875
00:41:47,480 --> 00:41:50,759
Speaker 11: But as you point out, bonds are pretty attractive now

876
00:41:50,760 --> 00:41:53,839
Speaker 11: because you can get yields across the curve. And one

877
00:41:53,840 --> 00:41:56,440
Speaker 11: of the things that we have spent times talking to

878
00:41:56,520 --> 00:41:59,960
Speaker 11: advisors about is to make sure that you take advance

879
00:42:00,400 --> 00:42:03,680
Speaker 11: to increase your duration and move out on the curve

880
00:42:04,120 --> 00:42:07,040
Speaker 11: where you can still get relatively attractive rates as your

881
00:42:07,080 --> 00:42:09,520
Speaker 11: money market and CD rates come down. But if you

882
00:42:09,560 --> 00:42:14,000
Speaker 11: look historically, anytime the Fed has cut rates, high quality

883
00:42:14,040 --> 00:42:18,480
Speaker 11: fixed income, longer duration has outperformed cash going forward.

884
00:42:18,640 --> 00:42:20,840
Speaker 2: We've asked this question to a bunch of guests over

885
00:42:20,840 --> 00:42:24,239
Speaker 2: the last two days in terms of alternative asset allocation,

886
00:42:24,360 --> 00:42:29,200
Speaker 2: and is it sixty forty zero, is it fifty forty ten,

887
00:42:29,680 --> 00:42:32,600
Speaker 2: is it sixty thirty ten. I'm doing all that fast math.

888
00:42:32,600 --> 00:42:34,000
Speaker 7: It was pretty good, right, yeah, thank you?

889
00:42:35,440 --> 00:42:36,719
Speaker 2: The how do you look at it?

890
00:42:36,800 --> 00:42:42,000
Speaker 11: So we deliver solutions to our advisors to use for

891
00:42:42,040 --> 00:42:46,720
Speaker 11: their individual client situations and deliver the appropriate allocation for them.

892
00:42:47,120 --> 00:42:50,600
Speaker 11: So we offer over one hundred different model suites at Commonwealth,

893
00:42:50,880 --> 00:42:55,960
Speaker 11: and we have models with alternatives in our model suites

894
00:42:56,000 --> 00:43:00,200
Speaker 11: that are used by our advisors. We view that as

895
00:43:01,080 --> 00:43:03,840
Speaker 11: keep fixed income as your core and use alternatives.

896
00:43:03,840 --> 00:43:06,560
Speaker 6: So whatever was forty forty.

897
00:43:06,400 --> 00:43:08,400
Speaker 11: Twenty would be the way we look at it, and

898
00:43:08,560 --> 00:43:12,600
Speaker 11: have alternatives that tend to have equity like exposures, so

899
00:43:12,680 --> 00:43:15,880
Speaker 11: you can participate but de risk the portfolio's going forward.

900
00:43:16,200 --> 00:43:18,879
Speaker 4: What are you hearing this week in Orlando from your

901
00:43:19,000 --> 00:43:20,279
Speaker 4: rias that maybe you.

902
00:43:20,200 --> 00:43:21,440
Speaker 7: Haven't heard in the past.

903
00:43:23,239 --> 00:43:28,600
Speaker 11: I think the big question really is fixed income. Understandably,

904
00:43:28,680 --> 00:43:32,080
Speaker 11: what happened in twenty twenty two still leaves a lot

905
00:43:32,080 --> 00:43:36,359
Speaker 11: of scarves, and people don't necessarily want to go back

906
00:43:36,440 --> 00:43:41,360
Speaker 11: into fixed income if they've lost their ability to provide

907
00:43:41,400 --> 00:43:44,759
Speaker 11: ballast when the equity markets provide volatility. Right, and I

908
00:43:44,800 --> 00:43:47,680
Speaker 11: look at it, the scenario that we had in twenty

909
00:43:47,719 --> 00:43:49,960
Speaker 11: twenty two is the perfect storm. Rates went up, they

910
00:43:49,960 --> 00:43:52,920
Speaker 11: went up fast, and they surprise people but we believe

911
00:43:52,960 --> 00:43:56,880
Speaker 11: that going forward that historical relationship between equity and fixed

912
00:43:56,920 --> 00:44:00,880
Speaker 11: income will continue. And if we get into a period

913
00:44:00,920 --> 00:44:04,000
Speaker 11: for equity volatility, you'll see more like twenty twenty where

914
00:44:04,040 --> 00:44:06,480
Speaker 11: bonds went up what the equity market. So we're having

915
00:44:06,560 --> 00:44:09,760
Speaker 11: those conversations with advisors of getting people comfortable back.

916
00:44:09,640 --> 00:44:10,480
Speaker 6: In the bond space.

917
00:44:10,800 --> 00:44:16,240
Speaker 2: Oh, what's their biggest misconception? You think about that thesis?

918
00:44:16,440 --> 00:44:16,600
Speaker 7: Oh?

919
00:44:16,640 --> 00:44:19,120
Speaker 11: I think people look and it's human nature.

920
00:44:19,160 --> 00:44:19,319
Speaker 6: Right.

921
00:44:19,320 --> 00:44:21,680
Speaker 11: We all look at short term interest rates and see

922
00:44:21,719 --> 00:44:24,160
Speaker 11: four seventy five and we see four on the tenure.

923
00:44:24,320 --> 00:44:24,560
Speaker 2: Yeah.

924
00:44:24,680 --> 00:44:28,120
Speaker 11: Right, but you've got to think of the total return

925
00:44:28,239 --> 00:44:31,120
Speaker 11: that is available to you across your portfolio.

926
00:44:31,239 --> 00:44:31,399
Speaker 6: Right.

927
00:44:31,480 --> 00:44:36,040
Speaker 11: So we believe in balance and diversification to navigate uncertainty

928
00:44:36,080 --> 00:44:39,480
Speaker 11: in portfolios. So instead of trying to time it and

929
00:44:39,520 --> 00:44:42,799
Speaker 11: make that shift, gradually make that shift and have the

930
00:44:42,800 --> 00:44:44,120
Speaker 11: balance and diversification.

931
00:44:45,040 --> 00:44:48,920
Speaker 2: All right, Thanks so much, Chris. We really appreciated Chris,

932
00:44:48,960 --> 00:44:52,279
Speaker 2: Senior portfolio manager of Commonwealth Financial Network. We appreciate that.

933
00:44:52,640 --> 00:44:57,160
Speaker 1: This is the Bloomberg Intelligence podcast available on Apples, Spotify

934
00:44:57,360 --> 00:45:00,560
Speaker 1: and anywhere else you will get your podcasts live each

935
00:45:00,600 --> 00:45:04,120
Speaker 1: weekday ten am tonoon Eastern on bloomberg dot com, the

936
00:45:04,239 --> 00:45:07,680
Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You

937
00:45:07,719 --> 00:45:10,880
Speaker 1: can also watch us live every weekday on YouTube and

938
00:45:11,040 --> 00:45:12,600
Speaker 1: always on the Bloomberg terminal