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Speaker 1: Single best idea. Good morning, good evening, wherever you are

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Speaker 1: around the world, here on Apple Podcasts and all the

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Speaker 1: other presenters we have. We are thrilled to the rollout

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Speaker 1: of these two ideas from our show and today it

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Speaker 1: could be like a two hour podcast because I didn't

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Speaker 1: have two ideas. I had about ten ideas of the

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Speaker 1: show real wisdom on economics, finance, investment, and international relations.

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Speaker 1: What do we do? We had easy decisions. We went

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Speaker 1: to Jeffrey you at Bny Mellon. But first, a really

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Speaker 1: important conversation to all of you. If you've succeeded, if

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Speaker 1: you've participated, if you've achieved in this pandemic recovery stock market.

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Speaker 1: Liz Anne Saunders is a Charles Schwab. I kidd her

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Speaker 1: about the short career she's had. The reality is she's

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Speaker 1: had an extensive career in different cycles, and part of

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Speaker 1: that is the arch academic debate over rebalancing. I'm not

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Speaker 1: going to go into the details because it's a too

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Speaker 1: short a podcast, but needless to say, the raging debate

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Speaker 1: over how to rebalance or if you should rebalance in

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Speaker 1: your retirement plan is a huge deal. I stopped the

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Speaker 1: show and I asked liz Anne Saunders about rebalancing.

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Speaker 2: Rebalancing is more about adding and trimming, not buying and selling.

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Speaker 2: So that's that's the beautiful component of that discipline is

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Speaker 2: it forces it's ad low trim high, distinct from by

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Speaker 2: low sell high. And one of the things that individuals

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Speaker 2: can consider doing, which is in contrast to what most institutions,

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Speaker 2: particularly cohorts like mutual funds, that have that calendar based

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Speaker 2: rebalancing final week of every quarter, I think for individuals,

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Speaker 2: and you have to take into consideration the effect of

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Speaker 2: turnover and transaction costs and even things like tax brackets.

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Speaker 2: So this is not a blanket recommendation, but for investors

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Speaker 2: to at least consider what I call portfolio base rebalancing.

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Speaker 2: Let your portfolio tell you when it's time to do something.

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Speaker 1: Wisdom from liz Ane Saunders, just a little background on

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Speaker 1: this to help you. Rebalancing debates are somewhat like the

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Speaker 1: debate over hedging. The gentleman who holds a high ground

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Speaker 1: on mathematics on this is a guy named Roman Friedman

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Speaker 1: at New York University. He's been brilliant on hedging and

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Speaker 1: basically hedging works one time, two times, three times four times,

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Speaker 1: you you know, buy a little insurance against a gain

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Speaker 1: that you have or to protect yourself, and then maybe

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Speaker 1: the seventh time you rehdge, you get clobberd and that

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Speaker 1: clobbard moment takes away all of the advantages you had

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Speaker 1: on the first four or five six hedges. That's sort

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Speaker 1: of the debate. Rebalancing is the same way, and that

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Speaker 1: rebalancing can really be efficacious until it's not. And I

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Speaker 1: love what she said there about a formulaic rebalance is

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Speaker 1: maybe not the way to go. That was hugely valuable.

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Speaker 1: That's what we try to do on surveillance every day

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Speaker 1: on Apple car playing on YouTube. See us at Bloomberg Podcasts.

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Speaker 1: We're gonna come back with someone smart, single best idea

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Speaker 1: we've been listening to Lysanne Sanders, Charles Schwab a really

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Speaker 1: really important comment on your retirement portfolio and on rebalancing.

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Speaker 1: Now I'm going to go a different way, and this

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Speaker 1: is a really interesting and I say he's a kid,

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Speaker 1: but you know he's not a kid. He's esteemed on

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Speaker 1: Wall Street and I'm I'm not going to mince words

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Speaker 1: in the derby for Jeffery Hugh's talent Bny Mellon hit

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Speaker 1: the home run. He joined BNY Melon. I'm going to

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Speaker 1: say two years ago off the top of my head.

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Speaker 1: This is an eclectic, complete kid out of London School

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Speaker 1: of Economics with just a wonderful synthesis of the correlations

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Speaker 1: of relationships across economics, and now it folds into the

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Speaker 1: markets and into global finance. Jeff, for you of b

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Speaker 1: n Y Melon, and you know, with him, I can

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Speaker 1: go anyway out, what's again going to do? What's this?

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Speaker 1: What's Liverpool gonna do? Whatever? But the answer is sometimes

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Speaker 1: he has a chart in his note where I just

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Speaker 1: stopped the show and we have to cover the brilliance

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Speaker 1: of his chart. His chart is there's wage growth, and

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Speaker 1: then you subtract the inflation and then you end up

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Speaker 1: with the inflation adjusted wage or the real wage in America.

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Speaker 1: The math it's like four point two percent wage growth.

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Speaker 1: Then you've got now a more quiescent inflation, and so

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Speaker 1: you have real wage growth, constructive wage growth in America.

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Speaker 1: Sticking out like a sore thumb is the crater. That's Japan.

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Speaker 1: We talked about that, but way more importantly, particularly to

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Speaker 1: those of you travel into Europe, is Italy Italy has

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Speaker 1: ginormous wage growth for maybe it's a reset for the

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Speaker 1: calendar here, I don't know. And they have very little inflation,

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Speaker 1: so they have a major, major real wage growth in Italy.

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Speaker 1: I started there with jeff for.

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Speaker 3: You, well, just based on headline numbers, they certainly are

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Speaker 3: looking a very good and you know there were one

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Speaker 3: offs in place and heading towards December, so that generated

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Speaker 3: a nominal age of them seven point nine percent. But

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Speaker 3: there's genuine disinflation in Italy as well due to lower

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Speaker 3: growth as you would expect lower demand. So that buffer

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Speaker 3: is in place right now. And if you think it's

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Speaker 3: what several Eurozone policymakers are worried about, they're looking at

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Speaker 3: real wage growth and saying people can still spend while

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Speaker 3: we talking about cutting rate.

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Speaker 1: In engineering, there's a course sophomore here typically which separates

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Speaker 1: the men from the boys, the women from the girls.

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Speaker 1: It's called statics and dynamics. And what you just heard

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Speaker 1: there was a little window into the dynamics the movable

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Speaker 1: parts that you see in economic analysis. Jeffery, you just

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Speaker 1: expert of that it be, And why Melan I need

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Speaker 1: to hear from you is we build out single best

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Speaker 1: Idea here on Apple Podcasts and across all of the

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Speaker 1: Bloomberg distributions. At Bloomberg Podcasts, we're keeping it to two

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Speaker 1: voices within a segment raging debate. I'd love to hear

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Speaker 1: from you. Don't give me this, wise guy, seven voices.

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Speaker 1: I'm too tired to do the show to do seven voices?

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Speaker 1: Shall we keep it at two voices? Short, sweet podcast,

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Speaker 1: or maybe extended out a couple of minutes longer. We

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Speaker 1: thank you for your support of Bloomberg Surveillance again on

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Speaker 1: Apple CarPlay. That's the place to get us internationally, and

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Speaker 1: on YouTube. You search for Bloomberg Podcasts and look for

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