Todd Jablonski
speaker
37 appearances
1 recordings
1 series
first heard Jan 2019
last heard Jan 2019
Todd Jablonski’s voice in public audio — every appearance, attributed to the second.
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Appearances
I think what we're seeing is quite clearly a case of a deteriorating risk return opportunity in the markets for investors.
Quite frankly, 2017, even though it had produced spectacular sharp ratios for investors, really did them no favors in terms of setting expectations.
You know, it's our belief that, in fact, the high return, low volatility paradigm that's existed in the markets since the global financial crisis is really set to turn as we head into 2019.
I'm commenting on what I think is some of the biases that investors bring to the marketplace today, specifically they're suffering from recency bias.
The high return, a low volatility paradigm that's existed again since the global financial crisis means that investors now have expectations that are misaligned with late cycle realities.
What you've seen in the majority of the up in risk asset classes, equities, credit going out into emerging markets has been rewarded since the financial crisis.
What we see a turning, in fact,
is that investors need to realize that we're back to a more normal level of volatility.
I think they're underappreciating what that means in terms of ups and downs and price movements of the things they own in their portfolios.
Fixed income assets are interesting from our standpoint in terms of what they do to a multi-asset portfolio.
I'm an asset allocation investor, and the way I view the world is through some up and risk options like equities that deliver growth.
And when you think about what fixed income delivers, it's two things.
It's volatility reduction and income.
So how can you approach the market in an area where we've likely got a flattening yield curve and where we have had rising rates this year?
On the outlook, I think it's safe to expect that, yes, we think there's potential for one additional increase.
Perhaps there's room for more.
We call it one plus or one question mark feels appropriate.
What we forecast then is perhaps a more flat curve.
And what investors can do is shorten duration.
I think at one to three year credits, for example, is a place in the market where you can look at an asset class and say, I can get a return commensurate with a very low level of, excuse me, a high level of risk with while in fact the risk is quite lower than that.
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