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Excess Returns
Beyond the Magnificent Seven: Liz Ann Sonders on Markets, Cycles & Investing
Jan 9, 2025
Joining the discussion is Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, known for her data-driven insights. She delves into the shift from the 'Great Moderation' to a 'Temperamental Era,' marked by increased volatility. Liz Ann emphasizes the need to look beyond headline indices, the importance of behavioral sentiment in investing, and lessons from legendary investor Marty Zweig. She advocates focusing on sound investment decisions amidst uncertainties rather than future predictions, offering enduring wisdom for all investors.
01:02:10
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Quick takeaways
- The transition from the Great Moderation to the Temperamental Era suggests an increase in market volatility and challenges for investors relying on past trends.
- Current inflationary trends, driven by supply chain disruptions and demand shifts, necessitate a reassessment of investment strategies for greater resilience.
Deep dives
Shifting Market Dynamics
The current investment landscape indicates a departure from the so-called Great Moderation era, characterized by low inflation and benign interest rates, as it transitions towards a more volatile economic environment reminiscent of earlier decades. This shift will likely impact how bond yields and stock prices move in relation to each other, creating potential challenges for investors who have relied on prior market patterns. The discussions illustrate that periods of increasing yields may now correlate with negative returns in the equity market, reversing previous trends where rising yields signified growth positivity. As investors adjust to these new dynamics, embracing diversified strategies that include non-correlated asset classes could become critical.
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Discover
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