WEBVTT - A Focus on Tariffs as S&P Slides Into Correction

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm deg Krisner. So

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<v Speaker 2>we made it. It's the final trading day of the week,

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<v Speaker 2>one that has been characterized by elevated market volatility and

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<v Speaker 2>that has very much been connected to the story on

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<v Speaker 2>US tariffs. The consensus seems to be that these tariffs

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<v Speaker 2>will lead to much slower economic growth, possibly a recession.

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<v Speaker 2>Let's take a closer look at what we have seen

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<v Speaker 2>in markets and where we may go from here. Joining

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<v Speaker 2>us now from Singapore is Mary Nicola. She is Bloomberg

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<v Speaker 2>Markets Live strategist. How would you characterize this week?

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<v Speaker 1>Oh, it's been a rough week. Let's say, just happy

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<v Speaker 1>Friday from us here in Singapore. It's obviously there's the

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<v Speaker 1>focus on the tariffs, and then of course you have

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<v Speaker 1>the government budget deadline as well, so there's been a

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<v Speaker 1>lot of heightened volatility as a result. But of course

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<v Speaker 1>the tradespat this constant back and forth on tariffs, and

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<v Speaker 1>then of course the retaliation measures that other countries have

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<v Speaker 1>been taking as a result is keeping markets on edge,

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<v Speaker 1>and of course here in Asia where potentially they could

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<v Speaker 1>be they're going to be affected by all of these tariffs.

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<v Speaker 1>This week hasn't been very good to them.

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<v Speaker 2>Is it dollar positive though? Is that really the story

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<v Speaker 2>of the week, when the US begins to take these

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<v Speaker 2>extreme measures, that the dollar becomes the beneficiary.

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<v Speaker 1>Yeah, you would think so, because let's say, if we

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<v Speaker 1>look back at the dollar smile. So the dollar has

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<v Speaker 1>been benefiting from US exceptionalism for quite some time. Now

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<v Speaker 1>that story has faded and the narrative is now shifting

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<v Speaker 1>towards does the dollar start benefiting from a haven status?

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<v Speaker 1>And there are pockets of that scene over the course

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<v Speaker 1>of the week, But for example, right now, it'll be

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<v Speaker 1>very difficult to invest in emerging market currencies when there's

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<v Speaker 1>so much volatility. You know, when the US is going

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<v Speaker 1>to slow, so is the rest of the world, and

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<v Speaker 1>most likely is emerging markets, especially when you don't see

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<v Speaker 1>that strong recovery in that pull really coming through yet

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<v Speaker 1>from China. So you would think that, especially against emerging markets,

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<v Speaker 1>the US dollar is going to gain.

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<v Speaker 2>One of the things that's been underpinning dollar strength, and

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<v Speaker 2>you and I have talked about this in the past,

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<v Speaker 2>is FED policy. Today we heard from the former head

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<v Speaker 2>of the New York Fed, Bill Dudley, and he was

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<v Speaker 2>saying the FED could essentially be in a bind if

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<v Speaker 2>tariffs lead to slower growth and then at the same

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<v Speaker 2>time higher inflation expectations. So it could be setting the

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<v Speaker 2>stage for something that feels a lot like stagflation. Does

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<v Speaker 2>it not?

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<v Speaker 1>Absolutely? And I think you're getting whiffs of that coming through.

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<v Speaker 1>And the last thing that the market wants to see

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<v Speaker 1>is stagnation, so slow growth, no growth, and then higher

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<v Speaker 1>inflation because at that point you don't want to keep

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<v Speaker 1>onto any US assets, So that's really hurts US equities,

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<v Speaker 1>that hurts the dollar. They don't know where to go,

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<v Speaker 1>but you're trying to look for alternatives. So right now,

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<v Speaker 1>where the alternative is or where you're seeing some positivity

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<v Speaker 1>is coming from places where you're seeing, for example, the

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<v Speaker 1>looser fiscal policy, so from Europe and China. But at

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<v Speaker 1>the same time, you know the FED is just stuck

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<v Speaker 1>in such a has seen a more difficult trajectory for

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<v Speaker 1>their policy given these headwinds.

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<v Speaker 2>You were talking about haven's status a moment ago. Is

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<v Speaker 2>it related to the dollar? Has the end been a

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<v Speaker 2>haven at all in this period?

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<v Speaker 1>Yeah, we've started seeing pockets of the end and obviously

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<v Speaker 1>the yen has an extra tailwind coming through because the

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<v Speaker 1>BOJ has been a lot more clear about its objectives

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<v Speaker 1>and saying that it's not concerned about the recent rise

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<v Speaker 1>and yields and that you know, the economic outlook is

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<v Speaker 1>being realized, almost setting the stage for next week's meeting

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<v Speaker 1>to be more of a hawkish hold, and that's going

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<v Speaker 1>to get yen bulls excited.

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<v Speaker 2>So when are we expecting the next great hike from

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<v Speaker 2>the BOJ?

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<v Speaker 1>So the market is currently not even positioning for anything

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<v Speaker 1>next week. There's about a twenty four percent chance for

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<v Speaker 1>something in April, but I would suspect that if we

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<v Speaker 1>get a hawkish hold, that could increase those odds quite significantly.

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<v Speaker 1>But a lot of the expectation for it is going

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<v Speaker 1>to be further out, more so towards the middle middle

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<v Speaker 1>of the year. That where you could where markets are

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<v Speaker 1>currently pricing, but based on the rhetoric, we could see

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<v Speaker 1>that moving a lot sooner rather than later.

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<v Speaker 2>You were also talking there briefly about China stimulus. It's

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<v Speaker 2>not just what's happening on the fiscal side, it's happening

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<v Speaker 2>in vis VI the PBOC.

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<v Speaker 1>Right, Yeah, So we're the currency has been really quite stable,

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<v Speaker 1>especially in what we're seeing, and the stability of the

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<v Speaker 1>currency has been absolutely crucial. What has been quite disappointing

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<v Speaker 1>is messages from the PBOC that they're not looking to

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<v Speaker 1>anytime soon, and that's been quite disappointing. But where we're

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<v Speaker 1>seeing is that they're anchoring the currency, and the anchoring

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<v Speaker 1>in the currency has been quite important in terms of

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<v Speaker 1>how it guides other currencies, and it's been the anchor

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<v Speaker 1>of stability. So you haven't seen drastic losses in other

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<v Speaker 1>currencies as a result of this stability in the Chinese

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<v Speaker 1>You on.

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<v Speaker 2>What about other markets that are especially prone or sensitive

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<v Speaker 2>to changes in trade policy. I'm thinking of South Korea

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<v Speaker 2>in particular.

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<v Speaker 1>Yeah, South Korea is one of the ones that is

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<v Speaker 1>probably going to be one of the hardest hit. Not

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<v Speaker 1>only is it a small, open economy, but it also

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<v Speaker 1>has the US runs a deficit with Korea, so that's

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<v Speaker 1>also in the eye of the storm. Anything that we're

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<v Speaker 1>seeing in discussion on steel, aluminum autos, those are all

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<v Speaker 1>put Korea in a particularly vulnerable position. So we have

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<v Speaker 1>to keep in mind too that this region is filled

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<v Speaker 1>with a lot of small, open economies. So if that's

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<v Speaker 1>if these trade wars escalate, or this trade escalates, a

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<v Speaker 1>lot of these countries are going to be very hard hit.

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<v Speaker 2>You mentioned physical stimulus or fiscal spending at the very

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<v Speaker 2>least happening in Europe, especially Germany, and we've talked a

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<v Speaker 2>little bit earlier in the week about money flowing into

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<v Speaker 2>those European markets. Is that something you expect will continue.

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<v Speaker 1>Yeah, so it looks like there's some hiccups right now

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<v Speaker 1>that the German Parliament is experienced in terms of passing

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<v Speaker 1>a budget. I think once we get that budget solidified

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<v Speaker 1>and confirmed that we're going to see more defense spending

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<v Speaker 1>and more and more infrastructure spending. I think Europe has

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<v Speaker 1>significantly potential upside because remember we've Germany especially has been

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<v Speaker 1>marred by a couple of years of stagnation, and so

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<v Speaker 1>it now looks like, especially with this with more spending,

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<v Speaker 1>the outlook for growth looks a lot more optimistic and

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<v Speaker 1>that really can help push equities and the euro.

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<v Speaker 2>You mentioned the BOJ meeting in the week ahead. Are

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<v Speaker 2>there other things that you're looking at next week that

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<v Speaker 2>really have the potential to move markets other than the

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<v Speaker 2>tear off story.

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<v Speaker 1>Yeah. So the China data dump on Monday is going

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<v Speaker 1>to be big because of the fact that we're trying

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<v Speaker 1>to see if the fiscal push is still coming through.

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<v Speaker 1>We saw that in the data, the loans data, especially

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<v Speaker 1>in January, where we started seeing fiscal stimulus coming through

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<v Speaker 1>and having an impact. But now because of the measures

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<v Speaker 1>that the government has announced, every single data dump that

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<v Speaker 1>comes through from China is going to be highly scrutinized

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<v Speaker 1>to see whether a lot of these if the policy

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<v Speaker 1>implementation is really coming through and coming through into the data.

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<v Speaker 1>So I would say that's one of the main ones.

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<v Speaker 1>Of course the FED as well in terms of how

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<v Speaker 1>especially because they're releasing their forecasts in their projections, so

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<v Speaker 1>do they start showing, as we discussed earlier, do we

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<v Speaker 1>start seeing slower growth and higher inflation, because that would

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<v Speaker 1>really spook the market.

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<v Speaker 2>So before I let you go to start your weekend,

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<v Speaker 2>you're in Singapore and we know that that is particularly

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<v Speaker 2>a sensitive market to trade flows. What is the mood

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<v Speaker 2>right now in the Lion City.

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<v Speaker 1>Confusion? I would say I think it's more of a

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<v Speaker 1>it's definitely taken on a much more somber tone in

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<v Speaker 1>terms of where does this leave us and how are

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<v Speaker 1>we going to be affected? So there's a combination of uncertainty.

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<v Speaker 1>There's a combination of confusion, and of course there's always

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<v Speaker 1>that glimmer of hope because we've seen President Trump renege

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<v Speaker 1>on policies over and over again. Is that does he

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<v Speaker 1>renege on some of these tariffs as well, and does

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<v Speaker 1>he just use them as a bait in terms of

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<v Speaker 1>getting a better deal, which is still shows there's a

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<v Speaker 1>glimmer of underlying hope. But I think, just like what

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<v Speaker 1>we're seeing in the US, there's just a lot of

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<v Speaker 1>uncertainty out there.

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<v Speaker 2>No doubt about it, especially when you consider that those

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<v Speaker 2>reciprocal tariffs have yet to take effect. I think we're

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<v Speaker 2>expecting some sort of announcement as soon as April to second, Mary,

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<v Speaker 2>thank you so much. Enjoy the weekend, Mary Nicola. There

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<v Speaker 2>Bloomberg Markets Live strategists joining us from our studios in

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<v Speaker 2>Singapore here on the Daybreak Asia podcast. Welcome back to

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<v Speaker 2>the Daybreak Asia Podcast. I'm Dog Prisner. The equity market

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<v Speaker 2>retreated into a correction today. That was after some heated

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<v Speaker 2>rhetoric on the trade war. President Trump threatened to enact

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<v Speaker 2>at two hundred percent levy on European wine, champagne and

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<v Speaker 2>other alcoholic beverages. He made this threat in response to

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<v Speaker 2>the EU's plan to tax American whiskey. Now, I think

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<v Speaker 2>it's painfully obvious that Trump's policies on trade have rattled

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<v Speaker 2>nerves in global markets. Closer look, let's bring in Sandy Braeger.

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<v Speaker 2>She is the chief client officer at Esperience, joining us

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<v Speaker 2>from San Francisco, California. Sandy, thank you for making time

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<v Speaker 2>to chat with us. Where are you right now in

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<v Speaker 2>understanding the risk of this tariff policy. I mean, we've

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<v Speaker 2>been talking a lot in the last few days about

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<v Speaker 2>the weakness in the equity market and about the fact

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<v Speaker 2>that yields have come in just a little bit. Is

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<v Speaker 2>this concerning to you right now, Doug.

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<v Speaker 3>It's a pleasure to be back, and it is definitely

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<v Speaker 3>something that we're watching. It's early days in all of

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<v Speaker 3>this new policy matter. Things are changing by the hour.

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<v Speaker 3>We do have some concerns about how this could play out,

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<v Speaker 3>but there is we think more stimulative news to come

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<v Speaker 3>from the administration in the form of text cuts and deregulation.

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<v Speaker 3>So it is a little disappointing. The sequencing is a

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<v Speaker 3>little disappointing to start with, the tariffs and spending cuts

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<v Speaker 3>that's causing a lot of concern, and so we've definitely

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<v Speaker 3>been holding clients' hands as we all try to understand

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<v Speaker 3>exactly what's going on. But in the near term, it's

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<v Speaker 3>not causing us to make any changes to our portfolios.

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<v Speaker 2>It's interesting that you make that point about kind of

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<v Speaker 2>M and A and activity. Bill Dudley was making a

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<v Speaker 2>similar point. Expectations before mister Trump was sworn in were

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<v Speaker 2>that the administration would work vigorously at trying to get

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<v Speaker 2>some of the regulations kind of dialed back, and merger

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<v Speaker 2>activity would pick up. We really haven't seen that at

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<v Speaker 2>this point in time. The focus has been clearly on

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<v Speaker 2>trade policy. Does that concern you a little bit that

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<v Speaker 2>the M and A part of the story is still

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<v Speaker 2>kind of tepid.

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<v Speaker 3>Well, we do expect it to come, so we're not disappointed,

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<v Speaker 3>maybe a little more annoyed because the markets really are

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<v Speaker 3>concerned about what's happening from the tear perspective, and people

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<v Speaker 3>are really playing that forward and being worried about recession.

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<v Speaker 3>We think it's still early days, and we think that

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<v Speaker 3>it's really important for our clients who are corporate executives,

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<v Speaker 3>family business owners, and entrepreneurs to remain invested and to

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<v Speaker 3>maintain very diversified portfolios. We think that's going to continue

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<v Speaker 3>to help, as it has over the last several weeks.

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<v Speaker 2>Dudley was also saying that what we're dealing with right

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<v Speaker 2>now could put the FED in a bind, which is

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<v Speaker 2>to say, of tariff's lead to the combination of slower

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<v Speaker 2>growth and higher inflation expectations. That sounds to me a

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<v Speaker 2>little like stagflation. Is that a risk that you share?

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<v Speaker 3>Well, you know, I'm glad I'm not working for the

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<v Speaker 3>FED right now. I think it'd be very difficult to

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<v Speaker 3>administer monetary policy when there's all these fiscal variables in

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<v Speaker 3>flux and they're changing rapidly. In terms of our outlook,

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<v Speaker 3>we think that the key here is the labor market

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<v Speaker 3>because right now, inflation but it's not decreasing as quickly

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<v Speaker 3>as people would like. It's actually the progress is slower,

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<v Speaker 3>but it does seem to be cooling in most areas

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<v Speaker 3>outside of housing, which we think is generally positive. But

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<v Speaker 3>we think the labor market's really important here. So if

0:13:16.760 --> 0:13:21.400
<v Speaker 3>we see that inflation remains sticky and the labor market

0:13:21.720 --> 0:13:24.319
<v Speaker 3>stays strong, then we think the FED will just continue

0:13:24.360 --> 0:13:29.079
<v Speaker 3>to maintain policy rates, which will be good. And if

0:13:29.080 --> 0:13:32.240
<v Speaker 3>we do see some slack in the labor market, then

0:13:32.840 --> 0:13:34.599
<v Speaker 3>I think we would be in a position where we

0:13:34.640 --> 0:13:38.400
<v Speaker 3>would expect FED to cut rates. And you know, it's

0:13:38.480 --> 0:13:40.840
<v Speaker 3>really a matter of how quickly they can fight inflation

0:13:40.920 --> 0:13:43.359
<v Speaker 3>and then what is happening with growth in the economy.

0:13:43.440 --> 0:13:45.440
<v Speaker 2>I alluded to the fact a moment ago that we

0:13:45.480 --> 0:13:49.280
<v Speaker 2>are now technically into kind of correction territory. Does that

0:13:49.440 --> 0:13:53.920
<v Speaker 2>lead you to maybe identify some opportunities Given the pullback

0:13:53.960 --> 0:13:56.440
<v Speaker 2>that we have seen in stocks, are you still feeling

0:13:56.480 --> 0:13:59.320
<v Speaker 2>that we could perhaps trade lower from here?

0:14:00.559 --> 0:14:04.400
<v Speaker 3>We think volatility is likely to continue, Doug and so

0:14:05.280 --> 0:14:09.640
<v Speaker 3>the way we've been thinking about portfolios and deploying them

0:14:09.880 --> 0:14:13.199
<v Speaker 3>is to be well diversified, as I mentioned before, and

0:14:13.440 --> 0:14:15.880
<v Speaker 3>we do see some opportunities in that, and they've been

0:14:15.880 --> 0:14:19.080
<v Speaker 3>playing out as the SMP five hundred has taken its

0:14:19.920 --> 0:14:25.160
<v Speaker 3>recent dips. So we definitely have some allocation to bonds.

0:14:25.160 --> 0:14:28.160
<v Speaker 3>We're staying on the short side there, sorry, the shorter

0:14:28.240 --> 0:14:33.000
<v Speaker 3>term side there. In equities. We think there are some

0:14:33.080 --> 0:14:37.040
<v Speaker 3>great opportunities around the globe, in the US as well

0:14:37.080 --> 0:14:41.160
<v Speaker 3>as overseas, particularly in the areas of the equity markets

0:14:41.200 --> 0:14:44.040
<v Speaker 3>that haven't rallied as much in recent years as those

0:14:44.080 --> 0:14:49.680
<v Speaker 3>mag seven stocks. So talking about value stocks, quality stocks,

0:14:49.760 --> 0:14:52.960
<v Speaker 3>and small cap stocks here in the US in particular,

0:14:53.440 --> 0:14:57.200
<v Speaker 3>we think that if there's investors wanting to take more

0:14:57.280 --> 0:15:01.120
<v Speaker 3>risk in the portfolio, small cap US stocks definitely has

0:15:01.160 --> 0:15:06.400
<v Speaker 3>some room to run over the next several years. Outside

0:15:06.400 --> 0:15:10.680
<v Speaker 3>of the United States, we're pretty you know, we're pretty

0:15:10.680 --> 0:15:14.800
<v Speaker 3>excited about Europe overall from a valuation play. Valuations are

0:15:14.840 --> 0:15:19.680
<v Speaker 3>genuinely generally lower over there, and we're definitely keeping an

0:15:19.720 --> 0:15:23.600
<v Speaker 3>eye on the developments in Germany as a potential catalyst

0:15:23.680 --> 0:15:26.560
<v Speaker 3>for upside economic growth because you know, it does seem

0:15:26.640 --> 0:15:28.720
<v Speaker 3>like that country is getting ready to spend some money.

0:15:28.880 --> 0:15:32.520
<v Speaker 2>Yeah, definitely. So yeah, So I'd like for you to

0:15:32.600 --> 0:15:36.960
<v Speaker 2>kind of give me maybe your definition when you talk

0:15:37.000 --> 0:15:42.480
<v Speaker 2>about quality whether a company like Adobe represents a quality name.

0:15:43.040 --> 0:15:45.720
<v Speaker 2>The stock was down fourteen percent a day on a

0:15:45.800 --> 0:15:50.960
<v Speaker 2>disappointing outlook. I mean, it's unbelievable how sometimes a stock

0:15:51.000 --> 0:15:54.920
<v Speaker 2>can be punished severely with the slightest miss in terms

0:15:54.960 --> 0:15:58.320
<v Speaker 2>of investor expectations. Is that. I know, maybe you can't

0:15:58.360 --> 0:16:01.680
<v Speaker 2>comment on specific names, but with a company like Adobe,

0:16:01.720 --> 0:16:04.040
<v Speaker 2>when you see a pullback to that magnitude, does it

0:16:04.080 --> 0:16:06.400
<v Speaker 2>get your interest at all? Yeah.

0:16:06.400 --> 0:16:10.840
<v Speaker 3>I think to answer the first question about quality for US,

0:16:10.920 --> 0:16:14.040
<v Speaker 3>it's companies that are positioned to do well during good

0:16:14.040 --> 0:16:18.720
<v Speaker 3>economic times and bad economic times, and also companies that

0:16:18.760 --> 0:16:21.680
<v Speaker 3>have very strong balance sheets so little or no debt.

0:16:22.120 --> 0:16:28.680
<v Speaker 3>So that does tend to include many tech names, healthcare providers,

0:16:28.760 --> 0:16:35.200
<v Speaker 3>financial services, and certainly within those types of companies when

0:16:35.240 --> 0:16:37.680
<v Speaker 3>there is a pullback on the stock price and they

0:16:37.720 --> 0:16:42.240
<v Speaker 3>become less expensive than they were. From a long term perspective,

0:16:42.320 --> 0:16:45.160
<v Speaker 3>we do think that there are opportunities there. But the

0:16:45.200 --> 0:16:48.000
<v Speaker 3>reason why we like these quality companies is because they

0:16:48.040 --> 0:16:52.120
<v Speaker 3>are in general and especially on a diversified basis, bet

0:16:52.120 --> 0:16:56.880
<v Speaker 3>are positioned to do well when there's volatile markets, and

0:16:56.920 --> 0:17:00.360
<v Speaker 3>as I mentioned, we are expecting volatility to continue. We

0:17:00.480 --> 0:17:04.520
<v Speaker 3>also like focusing on low volatility stocks in the portfolio.

0:17:05.480 --> 0:17:10.560
<v Speaker 3>They've been doing pretty good this year four percent as

0:17:10.560 --> 0:17:14.080
<v Speaker 3>of today, when the SMP five hundreds down about six percent.

0:17:14.520 --> 0:17:18.760
<v Speaker 3>So this diversification is really important. A lot of folks

0:17:19.000 --> 0:17:22.679
<v Speaker 3>get tricked into thinking because they have index holdings that

0:17:22.720 --> 0:17:25.600
<v Speaker 3>they have a diversified portfolio. But with the SMP five

0:17:25.680 --> 0:17:30.320
<v Speaker 3>hundred in particular, so concentrated among a few stocks. There's

0:17:30.320 --> 0:17:33.320
<v Speaker 3>not nearly as much diversification there as people think, and

0:17:33.359 --> 0:17:36.240
<v Speaker 3>we think there's opportunity outside of those really big holdings.

0:17:36.600 --> 0:17:38.760
<v Speaker 2>So you deal with a lot of clients directly on

0:17:38.800 --> 0:17:42.400
<v Speaker 2>a daily basis at a time when it's much easier

0:17:42.480 --> 0:17:45.159
<v Speaker 2>for people to kind of track moment to moment the

0:17:45.200 --> 0:17:49.360
<v Speaker 2>fluctuation in market activity and at the same time track

0:17:49.440 --> 0:17:53.679
<v Speaker 2>their net worth as well. Do you see this route

0:17:54.040 --> 0:17:56.520
<v Speaker 2>right now that we have seen in the equity market

0:17:56.560 --> 0:17:59.920
<v Speaker 2>having potential at all to kind of feed on itself

0:18:00.080 --> 0:18:02.359
<v Speaker 2>and take the economy down with it. I know tomorrow

0:18:02.400 --> 0:18:04.560
<v Speaker 2>we're going to get data from the University of Michigan

0:18:04.680 --> 0:18:09.359
<v Speaker 2>on consumer centiment. But if sentiment were to a road here,

0:18:09.480 --> 0:18:12.119
<v Speaker 2>does that put us in a very precarious situation.

0:18:13.800 --> 0:18:16.879
<v Speaker 3>I do think there is a possibility for all sorts

0:18:16.920 --> 0:18:21.040
<v Speaker 3>of outcomes, and I think it's important to be prepared

0:18:21.080 --> 0:18:24.719
<v Speaker 3>for them. When we're working with clients. One of the

0:18:24.720 --> 0:18:27.680
<v Speaker 3>first things that we do during volatile times is we

0:18:28.200 --> 0:18:31.360
<v Speaker 3>review their long term financial plan with them, so they

0:18:31.520 --> 0:18:34.880
<v Speaker 3>have a chance to understand what the market volatility means

0:18:34.920 --> 0:18:39.000
<v Speaker 3>to them from the perspective of their personal long range plan,

0:18:39.080 --> 0:18:42.280
<v Speaker 3>so we're putting it in their context, and that's usually

0:18:42.400 --> 0:18:46.960
<v Speaker 3>very helpful. Many of our clients have very long investment

0:18:47.000 --> 0:18:50.680
<v Speaker 3>time horizons, and so it's important to remind them of that,

0:18:51.400 --> 0:18:54.440
<v Speaker 3>and it's important to remind them of what their reliance

0:18:54.520 --> 0:19:00.000
<v Speaker 3>is on market returns. I think, having lived through it

0:19:00.080 --> 0:19:04.800
<v Speaker 3>and work through many, many volatile market periods, one of

0:19:04.800 --> 0:19:09.400
<v Speaker 3>the biggest lessons is for investors to stay fully invested.

0:19:10.040 --> 0:19:14.960
<v Speaker 3>The biggest risk I think to investors is pulling out

0:19:15.000 --> 0:19:17.760
<v Speaker 3>of the market, because while that can make you feel

0:19:17.800 --> 0:19:22.280
<v Speaker 3>good when things are falling around you, you never know

0:19:22.359 --> 0:19:25.040
<v Speaker 3>when to go back into the market, and chances are

0:19:25.119 --> 0:19:27.439
<v Speaker 3>if you wait till you feel comfortable going back in,

0:19:27.520 --> 0:19:31.040
<v Speaker 3>the market is already rallied back. So I'm not sure

0:19:31.080 --> 0:19:34.240
<v Speaker 3>what will happen from here, Doug, We're not. We don't

0:19:34.240 --> 0:19:40.080
<v Speaker 3>expect this guy to fall. We think things are okay,

0:19:39.720 --> 0:19:42.560
<v Speaker 3>but there are a lot of things in our world

0:19:42.560 --> 0:19:45.680
<v Speaker 3>that are in flux, and so we think investors should

0:19:45.720 --> 0:19:48.760
<v Speaker 3>be ready for all of that and should remain invested

0:19:49.000 --> 0:19:52.200
<v Speaker 3>and really think about their portfolio from what they needed

0:19:52.280 --> 0:19:52.920
<v Speaker 3>to do for them.

0:19:53.200 --> 0:19:55.919
<v Speaker 2>Okay, So, if a client wants to dial back his

0:19:56.080 --> 0:19:59.560
<v Speaker 2>or her risk profile. Let's say lighten up on the

0:19:59.600 --> 0:20:03.479
<v Speaker 2>equity side, choose the bond market instead. Is there a

0:20:03.560 --> 0:20:06.400
<v Speaker 2>point at the curve that you feel represents the greatest

0:20:06.480 --> 0:20:09.199
<v Speaker 2>value right now? You know.

0:20:10.080 --> 0:20:13.320
<v Speaker 3>I think one of the ways we would also recommend

0:20:13.440 --> 0:20:18.920
<v Speaker 3>clients be diversified beyond stocks and bonds is adding diversified

0:20:18.960 --> 0:20:23.600
<v Speaker 3>strategies into their portfolios. So these are strategies that may

0:20:23.640 --> 0:20:26.960
<v Speaker 3>be grounded in bonds and stocks, but they're traded differently.

0:20:27.400 --> 0:20:32.840
<v Speaker 3>So I think liquid alternatives managers who are investing around

0:20:32.880 --> 0:20:37.200
<v Speaker 3>the globe without being constrained to any particular benchmark investments

0:20:37.200 --> 0:20:42.080
<v Speaker 3>in things like gold, those are really powerful diversifiers in

0:20:42.160 --> 0:20:46.479
<v Speaker 3>markets like this. So at this point we are you know,

0:20:46.520 --> 0:20:52.680
<v Speaker 3>we've been deploying these three general asset classes bonds, equities,

0:20:52.920 --> 0:20:56.440
<v Speaker 3>and diversifiers for quite some time, and so I would

0:20:56.440 --> 0:21:01.520
<v Speaker 3>say there's no real magic allocation between those three. It

0:21:01.560 --> 0:21:05.080
<v Speaker 3>really just depends upon where on the overall risk return

0:21:05.160 --> 0:21:07.360
<v Speaker 3>spectrum the client is trying to be in how their

0:21:07.480 --> 0:21:12.040
<v Speaker 3>own risk tolerance measures up to various asset allocations.

0:21:12.280 --> 0:21:14.400
<v Speaker 2>Sandy will leave it there. It's always a pleasure. Thank

0:21:14.440 --> 0:21:16.280
<v Speaker 2>you so much for making time to chat with us.

0:21:16.280 --> 0:21:20.080
<v Speaker 2>Sandy Breger. There. She is the chief client Officer at Esperian.

0:21:20.200 --> 0:21:24.119
<v Speaker 2>She's joining from San Francisco here on the Daybreak Asia Podcast.

0:21:26.520 --> 0:21:29.880
<v Speaker 2>Thanks for listening to today's episode of the Bloomberg Daybreak

0:21:30.040 --> 0:21:33.399
<v Speaker 2>Asia Edition podcast. Each weekday, we look at the story

0:21:33.480 --> 0:21:37.840
<v Speaker 2>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:21:37.840 --> 0:21:41.959
<v Speaker 2>can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

0:21:42.080 --> 0:21:45.080
<v Speaker 2>or anywhere else you listen. Join us again tomorrow for

0:21:45.240 --> 0:21:48.719
<v Speaker 2>insight on the market moves from Hong Kong to Singapore

0:21:49.119 --> 0:21:52.840
<v Speaker 2>and Australia. I'm Doug Chrisner, and this is Bloomberg