00:00 Speaker A

So I would ask you first of all, about the round trip that the markets have taken, right? The big dip on tariffs, the comeback from tariffs. Now we’re pretty much flat on the year, more or less. That’s kind of true for large cap growth, also. Um, should there, should that have been the trajectory? What is the market factoring in the full picture, I guess.

00:28 Brad

Yeah. Unfortunately, I don’t get to decide the trajectory, but I can analyze it. And I think, I think what we’ve seen is investors coming back to the same playbook that they’ve been familiar with since November 2008, when we started quantitative easing is that whenever there’s some dispute or disagreement, you just buy the dip. Something will go the right way of the market. And unfortunately, what I believe is that’s no longer the case. We had from November 2008 to really March of 2022 when we started quantitative easing. I think the rule book has changed. We had zero rate policy going to higher rates. We had no inflation, a Goldilocks inflationary scenario, going to now a sort of anchored embedded inflation. We had globalization, now going to isolationism. And we’re still trying to play that a playbook that we had over the last 15 plus years. I think that’s dangerous territory. So what I would say is, yeah, we had this emotion that pulled the market lower, we had emotion that pulled the market up. Expect that for the next five years, at least is what I would say. There’s going to be a lot of chop.

02:24 Speaker A

So you, you would actually define, Brad, did I read this right? You would define the market as super risky here? Talk me through that.

02:41 Brad

Yeah. Yeah. I think from a, from a super risky standpoint, it goes back to that narrative I just presented where I think, you know, 12 or 15 years ago coming out of global financial crisis valuations were very attractive in the market broadly. And so, I would say at that time, if you had a dollar to spend, put it in the market. Just, I think that’s why passive ETFs became so popular, just invest a dollar into, get it in the market. And unfortunately, we’ve kind of squeezed all the good out of that. And now valuations are pretty rich, broadly I think, and for growth stocks. So what I, how we’re handling that is we’re, we’re using valuation discipline, we’re putting quality before growth, we’re just being very using a lot of discretion. I think just blindly throwing market money into a sort of concentrated market is just risky at this point.