First Trust ROI Podcast
ROI Podcast | Episode 22 | Are Investors Ignoring a More Powerful Secular Growth Theme than AI? | Richard Bernstein | June 3, 2024
Jun 3, 2024
Richard Bernstein, CEO/CIO of Richard Bernstein Advisors, shares insights on pressing economic themes such as deglobalization and reindustrialization. He highlights how investors are overlooking significant growth opportunities beyond AI. Bernstein emphasizes the crucial need for modernization in the U.S. grid infrastructure to meet rising energy demands and forecasts a staggering $14 trillion capital requirement. He also addresses the Federal Reserve's challenges in managing inflation and the evolving landscape of profit growth, urging a long-term investment approach.
37:15
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Quick takeaways
- Investors are currently overlooking significant opportunities in small-cap stocks, which may offer untapped potential compared to the dominating large-cap sector.
- The podcast emphasizes the importance of re-industrialization in America as a powerful growth theme, driven by de-globalization and government support for domestic manufacturing.
Deep dives
The Challenge of Diversification in Investment Portfolios
Investors often struggle with maintaining a diversified portfolio due to a common aversion to holding assets that do not align with their personal outlook on market trends. This behavior leads to under-diversification, as investors prioritize high-performing assets and neglect those that may serve as protective hedges against their misconceptions. Consequently, during unforeseen events like the COVID-19 pandemic, many portfolios lack the necessary safeguards, exposing investors to significant risks when their views prove incorrect. The conversation emphasizes the importance of understanding diversification as an insurance policy that may yield lower returns but mitigates the impacts of volatility.
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