Latest / Paramount Wealth Perspectives / Emily Roland Shares Her Perspective - 12/2/24

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Emily Roland Shares Her Perspective - 12/2/24 · Paramount Wealth Perspectives

• 0:00
  Intro song game on.
• 0:12
  Hello, everyone.
• 0:13
  Welcome to paramount wealth perspectives.
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  Your go-to podcast for the latest updates on global markets and current economic events.
• 0:20
  This is your host, Chris Coyle.
• 0:23
  Each week we strive to bring you expert analysis on market trends, economic shifts.
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  And key financial developments from around the world.
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  Whether you're an investor business leader.
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  Or simply curious about the global economy.
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  Our podcast is here to keep you informed and ahead of the curve.
• 0:41
  Now let's dive into the markets and explore what shaping the world of finance today.
• 0:46
  Here with us today.
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  We have Scott Tremlett chief investment officer and managing partner.
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  At paramount associates, wealth management.
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  And today we are especially excited to have our first guest speaker joining us.
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  Emily Roland from John Hancock.
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  Emily is responsible for developing and delivering timely market and economic insight to financial advisors.
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  And institutional investors across the country.
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  She has been featured on CNBC and Bloomberg TV.
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  And as quoted frequently in the financial press, including the wall street journal barons and the associated press.
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  She is a highly rated keynote speaker at a variety of industry conferences and events.
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  Scott and Emily recorded this last week.
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  Now I'm excited to share with you what they have to say.
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  So let's get started.
• 1:33
  Audio Only - All Participants: Excited to have Emily Roland here joining us from John Hancock, and I think we'll just jump into the questions right now.
• 1:41
  Audio Only - All Participants: I guess the first question is.
• 1:43
  Audio Only - All Participants: What's been asked a lot by investors and a lot by the general public is talking about the new administration and what does the new administration really mean for the U S stock market, inflation yields, things of that nature.
• 1:57
  Audio Only - All Participants: Maybe you can give us some color commentary on that.
• 2:01
  Audio Only - All Participants: Yeah, sure, Scott.
• 2:02
  Audio Only - All Participants: So great question.
• 2:03
  Audio Only - All Participants: There's certainly been a lot happening from a political perspective that's been driving process of returns in markets.
• 2:11
  Audio Only - All Participants: You know, some of the sort of post election winners have been areas like U.
• 2:15
  Audio Only - All Participants: S.
• 2:15
  Audio Only - All Participants: Credit.
• 2:16
  Audio Only - All Participants: We've seen equities so seemingly hitting new all time highs every day.
• 2:21
  Audio Only - All Participants: I think the idea.
• 2:22
  Audio Only - All Participants: Is that there are, you know, some potential and by the way, I've never used the word potential.
• 2:27
  Audio Only - All Participants: I don't think more in my career because we don't know how some of these policies are going to play out, but there are, you know, potential pro cyclical policies at play here, lower taxes or something that's been part of the campaign.
• 2:40
  Audio Only - All Participants: So we've seen those areas of the market do well.
• 2:42
  Audio Only - All Participants: Pretty remarkable performance out of areas like regional banks, which are a big part of the small cap indices.
• 2:50
  Audio Only - All Participants: So regional banks up over almost 20 percent since election day here.
• 2:55
  Audio Only - All Participants: The idea is that there may be some deregulation or deregulatory policies in the pipeline here.
• 3:02
  Audio Only - All Participants: Um, lower quality and speculative companies also getting a bid from things like, you know, unprofitable growth companies to crypto currency to crypto related assets.
• 3:12
  Audio Only - All Participants: So we've seen almost this sort of speculative frenzy building across markets since the election.
• 3:19
  Audio Only - All Participants: Um, and then finally, you've seen, areas like the dollar really outperforming.
• 3:23
  Audio Only - All Participants: So we are.
• 3:25
  Audio Only - All Participants: In an environment now where there's better relative economic growth in the United States, we have higher interest rates and other sovereign nations around the world.
• 3:33
  Audio Only - All Participants: And that's bringing a flood of dollars onto our shores, a couple of quote unquote, losers that have been emerging sort of just prior to the election and after.
• 3:44
  Audio Only - All Participants: Bonds, I would say, is the primary one.
• 3:47
  Audio Only - All Participants: We saw just a massive backup in bond yields.
• 3:50
  Audio Only - All Participants: Um, really, a lot of that took place before the election is Trump's odds of winning improved in the betting markets.
• 3:56
  Audio Only - All Participants: And you saw the really the idea that investors putting forward is that.
• 4:01
  Audio Only - All Participants: You know, tariffs could potentially be inflationary.
• 4:03
  Audio Only - All Participants: Tighter immigration policy could be inflationary.
• 4:07
  Audio Only - All Participants: And again, more pro cyclical policies could be accretive to growth in the United States.
• 4:13
  Audio Only - All Participants: So all of those things, pushing yields higher.
• 4:16
  Audio Only - All Participants: They have started to move sideways a bit here since the election again.
• 4:19
  Audio Only - All Participants: It was a really broad based, very sharp move higher.
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  Audio Only - All Participants: And then non U.
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  Audio Only - All Participants: S.
• 4:24
  Audio Only - All Participants: equities have really gotten crushed here versus their U.
• 4:28
  Audio Only - All Participants: S.
• 4:28
  Audio Only - All Participants: counterparts on sort of America.
• 4:30
  Audio Only - All Participants: 1st policies, the potential for higher tariffs again.
• 4:35
  Audio Only - All Participants: We have to point out that a lot of this is.
• 4:38
  Audio Only - All Participants: Speculative.
• 4:39
  Audio Only - All Participants: We don't know whether these policies are a, you know, negotiating starting point.
• 4:45
  Audio Only - All Participants: If there's something more substantive here, there's a lot still to be found, but the markets are telling you sort of how they're thinking about.
• 4:53
  Audio Only - All Participants: Potential policies under this new administration.
• 4:58
  Audio Only - All Participants: I will say that markets do have muscle memory.
• 5:02
  Audio Only - All Participants: We actually have a playbook for this in 2016 and 2017, which of course was the last time we saw a Trump presidency.
• 5:11
  Audio Only - All Participants: And we did see similar moves across currency markets, across unprofitable companies, regional banks, small cap equities.
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  Audio Only - All Participants: Um, a lot of those trades did happen very quickly.
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  Audio Only - All Participants: They were priced in the markets quickly.
• 5:24
  Audio Only - All Participants: And then they faded from here.
• 5:26
  Audio Only - All Participants: So I know one thing you were going to ask or we were going to chat about was, you know, what does this mean for investors longer term?
• 5:33
  Audio Only - All Participants: I don't think it's that important.
• 5:36
  Audio Only - All Participants: Um, I think investors are going to come back to fundamentals.
• 5:38
  Audio Only - All Participants: They're going to come back to the macro.
• 5:40
  Audio Only - All Participants: But for now, you know, some of these trades may be in sort of the 6th or 7th inning if you look back at the performance that we saw in 2016.
• 5:50
  Audio Only - All Participants: So for investors that are looking to get more tactical over the next quarter or two, there may be something there, but we do think that investors should and will refocus on where the best relative economic growth is, where the best relative earnings growth is, you know, as we head into the bulk of 2025.
• 6:08
  Audio Only - All Participants: Yeah, and I, I've kind of agreed with a lot of that I've been asked a lot about this, obviously, the last few months and my answer is always, well, the market could go up market could go down.
• 6:18
  Audio Only - All Participants: It's just going to go back to trend.
• 6:21
  Audio Only - All Participants: Um, but is there any meat per se?
• 6:25
  Audio Only - All Participants: Financials could be a winner here, is there any meat that you see with policy administration, things of that nature that could actually push certain areas of the U.
• 6:35
  Audio Only - All Participants: S.
• 6:35
  Audio Only - All Participants: stock market?
• 6:37
  Audio Only - All Participants: Yeah, I mean, there potentially is.
• 6:39
  Audio Only - All Participants: But let's take financials for an example.
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  Audio Only - All Participants: Very similar again in 2016.
• 6:45
  Audio Only - All Participants: And there was deregulation for financials.
• 6:48
  Audio Only - All Participants: But during the Trump administration, frankly, it was not a great part of the market to own.
• 6:53
  Audio Only - All Participants: Simply because interest rates were low, and that's negative for banks, net interest margins, and the earnings trends weren't there.
• 7:00
  Audio Only - All Participants: Frankly, the best places to invest during the first Trump administration was tech stocks and growth because the earnings trends were better there.
• 7:08
  Audio Only - All Participants: And that's the same thing that we're seeing today.
• 7:10
  Audio Only - All Participants: In fact, if you look at the top 10 performing sectors under the Trump administration, our areas of the market indices, is Not only were technology stocks way up there, but so were Chinese stocks, even though we applied all of these tariffs to China simply because we were in a period of global synchronized growth, which means countries around the world.
• 7:32
  Audio Only - All Participants: We're all growing at a quick, fast pace together.
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  Audio Only - All Participants: Those environments tend to benefit the most cyclical areas of the world.
• 7:39
  Audio Only - All Participants: And China, of course, is the poster child for cyclicality.
• 7:43
  Audio Only - All Participants: Likewise, if you looked under the Biden administration, the best sector to own by far has been energy.
• 7:50
  Audio Only - All Participants: It's exactly the opposite of what you would have thought.
• 7:53
  Audio Only - All Participants: Based on Biden administration policies around green energy and poor treatment of fossil fuel companies.
• 8:00
  Audio Only - All Participants: So trying to use politics as an input to making these decisions is fraught with landmines.
• 8:06
  Audio Only - All Participants: Again, we would be looking at at relative earnings trends, for example, large cap stocks right now.
• 8:13
  Audio Only - All Participants: Are seeing positive earnings revisions.
• 8:15
  Audio Only - All Participants: Earnings were up about 6 percent for the S and P 500 this quarter.
• 8:20
  Audio Only - All Participants: Earnings for small cap stocks are negative negative 7 percent this quarter.
• 8:25
  Audio Only - All Participants: Analysts are penciling in a total of negative 4 percent earnings growth for small cap stocks in 2024.
• 8:32
  Audio Only - All Participants: The earnings trends just aren't there.
• 8:34
  Audio Only - All Participants: So we want to try to gravitate to parts of the market where we're seeing Those profit margins stable, great return on equity, lots of cash, companies that can really navigate an environment in which corporate profits are coming back down to sort of following gravity back down from very advanced levels during the height of the pandemic and over the last few years.
• 8:59
  Audio Only - All Participants: Yeah.
• 8:59
  Audio Only - All Participants: And then I'm not a big bank guy.
• 9:02
  Audio Only - All Participants: I've never been a big bank guy.
• 9:03
  Audio Only - All Participants: My financial exposure is really limited to asset managers right now and insurance firms.
• 9:10
  Audio Only - All Participants: There has been some momentum there.
• 9:11
  Audio Only - All Participants: And I did read something that you said a few days ago, take profits where you can.
• 9:16
  Audio Only - All Participants: I think that a lot of people become collectors of investments.
• 9:19
  Audio Only - All Participants: And they never sell things and they from time to time.
• 9:23
  Audio Only - All Participants: Well, you had mentioned China.
• 9:24
  Audio Only - All Participants: I think that's probably a good leeway over to international markets.
• 9:28
  Audio Only - All Participants: I have my own rankings.
• 9:30
  Audio Only - All Participants: I am a big fan of India have been for a while.
• 9:33
  Audio Only - All Participants: I like more of their small mid cap area.
• 9:35
  Audio Only - All Participants: I think there's just more to choose from on the industrial side.
• 9:39
  Audio Only - All Participants: Specifically you talked a little bit about China, but there's other.
• 9:43
  Audio Only - All Participants: Countries regions that are going to be affected by potential, tariffs, you know, what might mean stuff for Europe might mean things for Canada.
• 9:50
  Audio Only - All Participants: Um, maybe you could touch on some of that.
• 9:52
  Audio Only - All Participants: Yeah, sure.
• 9:53
  Audio Only - All Participants: So, I mean, markets are certainly telling you that and, you know, you've seen like the Canadian dollar taking a beating today based on something that Trump posted on, you know, his social media channel.
• 10:04
  Audio Only - All Participants: So it's really hard to kind of discern the signal from the noise right now.
• 10:09
  Audio Only - All Participants: Um, so we would be really careful trying to kind of make guesses about how tariffs are going to impact different parts of the world.
• 10:16
  Audio Only - All Participants: Frankly, we don't know yet.
• 10:18
  Audio Only - All Participants: When we look more structurally at these areas, China's got problems.
• 10:22
  Audio Only - All Participants: Their property sector is very, very challenged.
• 10:25
  Audio Only - All Participants: Now there's demographic issues there.
• 10:27
  Audio Only - All Participants: They're moving away from capitalism, which is a very business friendly.
• 10:32
  Audio Only - All Participants: Political regime.
• 10:33
  Audio Only - All Participants: So we want to be mindful of China.
• 10:35
  Audio Only - All Participants: The earnings trends aren't there.
• 10:37
  Audio Only - All Participants: Now, India certainly to your point is a bright spot within emerging market equities from an earnings perspective.
• 10:43
  Audio Only - All Participants: One way to think about it in terms of portfolios though, is yes, we can talk about India.
• 10:47
  Audio Only - All Participants: We can be overweight India within emerging markets.
• 10:50
  Audio Only - All Participants: We have to be mindful of the fact that, you know, the United States is really very concentrated right now.
• 10:56
  Audio Only - All Participants: We need to think about how powerful the impact of the earnings growth and the returns and the multiple expenses.
• 11:03
  Audio Only - All Participants: So we're modestly underweight emerging market equities.
• 11:11
  Audio Only - All Participants: We modestly underweight China.
• 11:13
  Audio Only - All Participants: India would be a bright spot.
• 11:15
  Audio Only - All Participants: But again, that the power that we've seen out of the US mega cap tech space is kind of hard to stop here.
• 11:22
  Audio Only - All Participants: obviously, there's momentum right now and some of those names that we're all making money on no matter what we're invested in really.
• 11:29
  Audio Only - All Participants: But, you know, if we looking at the underlying aspects for inflation.
• 11:33
  Audio Only - All Participants: growth is by 1 model productivity plus immigration per se, or new jobs, and if we shut down, new people coming into the country, just talking about.
• 11:46
  Audio Only - All Participants: Economically don't have to come from somewhere.
• 11:49
  Audio Only - All Participants: So I do kind of feel like there's going to be some pain felt somewhere along the line.
• 11:54
  Audio Only - All Participants: If it's something drastic on that realm, and that could push up wages.
• 11:59
  Audio Only - All Participants: Is that how you see it?
• 12:01
  Audio Only - All Participants: Or, what are you thinking?
• 12:03
  Audio Only - All Participants: Yeah, actually, if we didn't have immigration, our monthly jobs, growth numbers would be negative.
• 12:09
  Audio Only - All Participants: And while that could have a modest impact on on wages, it's actually growth negative, which is disinflationary.
• 12:16
  Audio Only - All Participants: So, immigration has helped the economy grow at an above trend pace that could reverse if we, if we have much tighter immigration policies, some of the other things that are driving.
• 12:28
  Audio Only - All Participants: Disinflation in our view are actually wage growth is one.
• 12:32
  Audio Only - All Participants: So we've gone from a high of about 6 percent average hourly earnings a couple of years ago, down to four and slowing.
• 12:40
  Audio Only - All Participants: We're seeing corporate profitability come under pressure that ultimately should push wage growth even lower from here.
• 12:46
  Audio Only - All Participants: That's disinflationary.
• 12:48
  Audio Only - All Participants: The housing market, um, we're seeing, some changes there, particularly in those sort of COVID hotspots that people move to, think about Texas and Florida, they were very much overbuilt.
• 13:00
  Audio Only - All Participants: And now inventories are up up nationally about 25%.
• 13:05
  Audio Only - All Participants: Year over year, remember all those people that moved to Texas.
• 13:08
  Audio Only - All Participants: Now they've got to go back to their Manhattan and their California company that they work for because they want folks to be in office.
• 13:15
  Audio Only - All Participants: So we're seeing that contribute eventually to some disinflation within the housing or the shelter component of CPI.
• 13:23
  Audio Only - All Participants: And then finally, commodity prices.
• 13:25
  Audio Only - All Participants: If you're expecting some kind of.
• 13:27
  Audio Only - All Participants: significant reacceleration and inflation that has to come hand in hand with higher oil prices, higher energy prices, and we're just not seeing it.
• 13:36
  Audio Only - All Participants: They're just moving sideways right now.
• 13:39
  Audio Only - All Participants: Um, and I think, you know, that's notable even during a time where we've had some flare ups in geopolitical issues over the last few years.
• 13:45
  Audio Only - All Participants: Few weeks here, we just haven't seen oil prices go up.
• 13:49
  Audio Only - All Participants: So in our view, all of those things are disinflationary.
• 13:52
  Audio Only - All Participants: And the great, the great news about that, even though it doesn't sound that great, that wage growth is slowing, is that bonds are offering a lot of value here.
• 14:01
  Audio Only - All Participants: Given the backup and yields that we saw, you know, we were approaching four 50 on the 10 year treasury briefly.
• 14:06
  Audio Only - All Participants: That's come down a bit.
• 14:08
  Audio Only - All Participants: But we still think that the aggregate bond index around four and a half to 5 percent offers a lot of value right now.
• 14:15
  Audio Only - All Participants: The bond market is just so myopically focused on these potential political outcomes that it's not sniffing out all of these pretty significant disinflationary forces that are at play.
• 14:27
  Audio Only - All Participants: Remember, inflation was your worst enemy as a bond investor.
• 14:32
  Audio Only - All Participants: And in our view, it's actually going to start to become your best friend as we go into 2025.
• 14:37
  Audio Only - All Participants: Well, that's interesting.
• 14:38
  Audio Only - All Participants: I hadn't thought about it from that side.
• 14:40
  Audio Only - All Participants: I appreciate you giving you that commentary.
• 14:42
  Audio Only - All Participants: So we're looking at inflation coming down, potentially over the next year.
• 14:48
  Audio Only - All Participants: What does that mean for the Fed?
• 14:49
  Audio Only - All Participants: What do you feel about, the Fed and their path?
• 14:53
  Audio Only - All Participants: Yeah, I mean, December is going to be really interesting.
• 14:57
  Audio Only - All Participants: I don't think it's a done deal for the Fed.
• 15:00
  Audio Only - All Participants: You know, the things they have on their side are that, you know, they've got some, the disinflation traction that we already talked about.
• 15:07
  Audio Only - All Participants: And then they've got, you know, the unemployment rates creeping upward 4.
• 15:11
  Audio Only - All Participants: 2 percent and they've said they don't welcome any further cracks in the labor market.
• 15:15
  Audio Only - All Participants: So we know that.
• 15:16
  Audio Only - All Participants: So as far as the Fed's dual mandate goes, Um, you know, I think they've probably got the room to cut given inflation's low enough, that they can do that.
• 15:27
  Audio Only - All Participants: You know, the challenge, of course, is that we have seen this modest reacceleration in economic growth and in animal spirits.
• 15:34
  Audio Only - All Participants: The Fed's job is kind of being done for it in terms of keeping the economy afloat right now, given the fact that we've seen not only some upside surprises in the economic data, I mean, the U.
• 15:45
  Audio Only - All Participants: S.
• 15:45
  Audio Only - All Participants: services side is on fire.
• 15:47
  Audio Only - All Participants: We got a 57 services side PMI.
• 15:51
  Audio Only - All Participants: And for those that don't follow PMIs, I get it.
• 15:54
  Audio Only - All Participants: There are their monthly business surveys that tell us about the health of the underlying economy and anything over 50 is expansionary and 57 is quite extraordinary.
• 16:04
  Audio Only - All Participants: The consumer is doing well.
• 16:05
  Audio Only - All Participants: There's a massive wealth effect going on.
• 16:08
  Audio Only - All Participants: The S and P five hundreds up roughly 25 percent year to date for the second year in a row.
• 16:13
  Audio Only - All Participants: Um, and that's been great for investors, portfolios, the jobs market's good.
• 16:18
  Audio Only - All Participants: So a lot of things are happening, are good in terms of the economy right now, which I think sort of limits the feds flexibility here.
• 16:27
  Audio Only - All Participants: Um, I do think they'd like to cut, but they also, you know, you heard chair Powell last week sort of address.
• 16:34
  Audio Only - All Participants: This potential for more, more stimulus, more pro more pro cyclical policies.
• 16:40
  Audio Only - All Participants: In 2016, the Fed did pause.
• 16:43
  Audio Only - All Participants: If they pause, I think that would be the equivalent of a hike.
• 16:46
  Audio Only - All Participants: Uh, the bond market is telling you that it's about a 60 percent chance of a cut, 40 percent chance of a hold.
• 16:53
  Audio Only - All Participants: We still have another nonfarm payrolls report.
• 16:56
  Audio Only - All Participants: We have another CPI report.
• 16:58
  Audio Only - All Participants: We have more information probably coming out about how these policies might look.
• 17:02
  Audio Only - All Participants: So there's a lot of data for the Fed to contend with.
• 17:06
  Audio Only - All Participants: But I think, you know, it's certainly not a lock at this point, 3, 3 plus weeks out here.
• 17:11
  Audio Only - All Participants: Yeah, I think I kind of agree on that, too.
• 17:14
  Audio Only - All Participants: I think it's all data dependent.
• 17:15
  Audio Only - All Participants: I do appreciate the fact that they're willing to be data dependent and not just sticking to their guns because they say so.
• 17:24
  Audio Only - All Participants: I appreciate that very much to be.
• 17:26
  Audio Only - All Participants: Yeah.
• 17:27
  Audio Only - All Participants: I guess, tariffs are tariffs.
• 17:29
  Audio Only - All Participants: We will see how that all works.
• 17:31
  Audio Only - All Participants: We talked about the wage and job market, I guess, where are the cracks?
• 17:37
  Audio Only - All Participants: You see, because when I'm reading about earnings and I'm seeing, the averages of beats and I'm seeing that your revenue growth and everything is kind of below 5 year, 10 year averages, and I think, obviously earnings don't completely follow the revenues and sales, but there is some sort of equation to that.
• 17:57
  Audio Only - All Participants: What do you think about earnings going forward?
• 18:00
  Audio Only - All Participants: Yeah, it's a good question.
• 18:01
  Audio Only - All Participants: You know, we're heading, we just had a pretty decent earning season again, about 6 percent earnings growth for the S& P 500, which was a little bit better than expected, but the bar was really low.
• 18:12
  Audio Only - All Participants: And that's the last time we're going to have a low bar.
• 18:15
  Audio Only - All Participants: The expectation was for 3, 4 percent earnings growth.
• 18:18
  Audio Only - All Participants: From here.
• 18:19
  Audio Only - All Participants: We're just starting a series of quarters where analysts are penciling in double digit earnings growth.
• 18:25
  Audio Only - All Participants: So the bars just gotten a lot higher.
• 18:28
  Audio Only - All Participants: I certainly think that there's companies that can clear the bar.
• 18:31
  Audio Only - All Participants: we're emphasizing areas like, U.
• 18:34
  Audio Only - All Participants: S.
• 18:34
  Audio Only - All Participants: Large cap stocks, U.
• 18:35
  Audio Only - All Participants: S.
• 18:35
  Audio Only - All Participants: Mid cap stocks, which are seeing some pretty robust earnings trends benefiting from an overweight to the industrial sector.
• 18:42
  Audio Only - All Participants: I know you mentioned earlier, That's a favorite of yours.
• 18:45
  Audio Only - All Participants: We see that benefiting from the fiscal spending that's playing out the manufacturing renaissance that we're seeing in the United States.
• 18:52
  Audio Only - All Participants: So I certainly think there's pockets of the market that can.
• 18:56
  Audio Only - All Participants: That can clear that bar.
• 18:58
  Audio Only - All Participants: You know, I think the biggest challenge right now in terms of risks into 2025 is that the consensus is so one sided Lee positive, you know, that that corporate earnings are going to continue to soar.
• 19:10
  Audio Only - All Participants: See double digit growth that stock prices are going to continue to go up.
• 19:14
  Audio Only - All Participants: The growth is going to modestly reaccelerate that inflation is going to come down.
• 19:19
  Audio Only - All Participants: It's like that in this utopia that you're seeing and cross investors is going to continue.
• 19:24
  Audio Only - All Participants: That might all happen.
• 19:26
  Audio Only - All Participants: And I hope it does.
• 19:27
  Audio Only - All Participants: Hope's not a great investment strategy, by the way.
• 19:30
  Audio Only - All Participants: I hope it does.
• 19:32
  Audio Only - All Participants: But the problem is that markets are already priced for it.
• 19:35
  Audio Only - All Participants: The S& P 500 is trading at 22 times forward earnings, 27 times trailing earnings.
• 19:41
  Audio Only - All Participants: This is about as expensive as stocks have been over the course of the last decade or two.
• 19:47
  Audio Only - All Participants: So we want to be mindful there as markets may be priced for perfection.
• 19:51
  Audio Only - All Participants: Bonds, on the other hand, I don't think are priced for perfection.
• 19:55
  Audio Only - All Participants: Um, again, with the focus on these potential political scenarios.
• 20:01
  Audio Only - All Participants: We've seen yields back up and they represent a really attractive entry point right now.
• 20:05
  Audio Only - All Participants: So we would look at areas like treasuries, mortgage backed securities, investment grade, corporate bonds.
• 20:10
  Audio Only - All Participants: You don't even need to dip down into credit anymore to generate these yields that are close to 20 year highs.
• 20:17
  Audio Only - All Participants: So we would be leaning into an area.
• 20:20
  Audio Only - All Participants: Of the market that, frankly, hasn't done well, um, that offers a lot of value here.
• 20:26
  Audio Only - All Participants: That's probably not priced for the economic reality that we're heading into into next year, which is a modest contraction and economic activity.
• 20:35
  Audio Only - All Participants: So that's the way we think about this.
• 20:36
  Audio Only - All Participants: Where is the best relative value that you can find across markets?
• 20:41
  Audio Only - All Participants: And right now, we think that bonds can probably do some more heavy lifting in portfolios into next year.
• 20:48
  Audio Only - All Participants: Yeah, and I think that diversification is key right now, just to not get caught up too much in the momentum because it can turn on you quickly.
• 20:57
  Audio Only - All Participants: And if everybody owns the same stuff, and they're all selling at the same time, it may not feel very well when you're going down.
• 21:03
  Audio Only - All Participants: Exactly.
• 21:04
  Audio Only - All Participants: How about alternative space?
• 21:06
  Audio Only - All Participants: I know you have to jump off here in a couple of minutes, but any thoughts on alternatives, and how they kind of fit going into 2025.
• 21:15
  Audio Only - All Participants: Yeah, sure.
• 21:16
  Audio Only - All Participants: So we, we sort of bucket alternatives into a couple of different pieces.
• 21:20
  Audio Only - All Participants: Um, you know, 1 would be sort of capital, more sort of capital appreciation type strategies, riskier ones and then risk mitigating strategies.
• 21:30
  Audio Only - All Participants: So areas of alternatives that can provide a volatility buffer, a dampener.
• 21:36
  Audio Only - All Participants: And really a diversification benefit and we're favoring risk mitigation strategies right now, you know, sort of given where we see the economic environment going into next year.
• 21:47
  Audio Only - All Participants: So an example would be, we've already talked about.
• 21:51
  Audio Only - All Participants: Things like infrastructure.
• 21:52
  Audio Only - All Participants: I think, you know, looking at private credit versus private equity makes a lot of sense in portfolios.
• 21:57
  Audio Only - All Participants: Now, given the income that's available there, embracing a multi alternative strategy that's going to sort of help smooth the ride out.
• 22:06
  Audio Only - All Participants: Within an alternatives bucket, I think would all be sort of good potential ideas as we look into next year to help really buffer some of the potential risk after a couple really, really great years across risk assets.
• 22:21
  Audio Only - All Participants: Well, thank you.
• 22:21
  Audio Only - All Participants: Thank you.
• 22:22
  Audio Only - All Participants: I know you have to jump over to Bloomberg anything you want to leave us with here.
• 22:26
  Audio Only - All Participants: You're 1 of my favorites.
• 22:27
  Audio Only - All Participants: I appreciate you taking the time with us today.
• 22:29
  Audio Only - All Participants: Anything you want to leave us with.
• 22:31
  Audio Only - All Participants: Oh, well, thanks for saying that.
• 22:33
  Audio Only - All Participants: You know, again, I think it's just about kind of managing emotions, which it always is.
• 22:38
  Audio Only - All Participants: And you and the team are so great at helping your clients do that.
• 22:41
  Audio Only - All Participants: It's so hard during times like this, you know, not only with the election, but, but also with, kind of the, the excitement, I think that's permeating markets right now.
• 22:51
  Audio Only - All Participants: so, continue to think about, I think, pruning risk, trimming into strength, looking to redeploy assets into areas that are, that offer, better fundamentals, mid cap stocks in the United States, um, we didn't talk much about, but infrastructure, more defensive areas like utilities, and then just taking advantage of the backup and bond yields that we've seen, I think, are all potential.
• 23:12
  Audio Only - All Participants: You know, great ideas for portfolios into next year.
• 23:15
  Audio Only - All Participants: But I know you continue to do a great job, you know, managing risk and finding opportunities with your clients.
• 23:21
  Audio Only - All Participants: So best of luck to you and the team into next year.
• 23:23
  Audio Only - All Participants: And I'm sure we'll be in touch.
• 23:25
  Audio Only - All Participants: Thank you, Emily.
• 23:25
  Audio Only - All Participants: Appreciate it very much.
• 23:27
  Thank you to both Scott and Emily for the informative update on what they see coming in 2025.
• 23:33
  We are incredibly grateful to Emily Roland for sharing her knowledge with our listeners.
• 23:37
  And we eagerly anticipate her return to our podcast next year.
• 23:41
  Please remember that the views and opinions expressed by guest speakers are solely their own.
• 23:46
  And do not necessarily reflect the views of paramount associates, wealth management.
• 23:51
  The information provided by external speakers is for informational purposes only.
• 23:56
  And is not intended as solicitation or recommendation for any particular investment strategy or any product or service.
• 24:04
  For now.
• 24:05
  Stay informed.
• 24:06
  Stay ahead and join us next week.
• 24:09
  For more key updates shaping the global economy.
• 24:11
  Thank you for tuning into paramount wealth perspectives.
• 24:14
  We hope you all have a fantastic week.