Barron's Streetwise
How Low Can We Go?
Apr 11, 2025
David Steinbach, Global Chief Investment Officer at Hines, joins to discuss market corrections and economic uncertainties. They delve into the bear case for the S&P 500, questioning the sustainability of current valuations. Steinbach highlights how global tariff pauses might impact demand. The conversation also navigates the evolving economic landscape post-COVID, emphasizing the importance of resilient supply chains. With a touch of humor, they use skiing metaphors to illustrate the need for adaptability in the unpredictable market terrain.
25:37
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Quick takeaways
- Understanding market corrections, which occur 30% of the time, is essential for investors to maintain resilience and diversify portfolios.
- The shift towards deglobalization and rising trade costs necessitates a new approach for investors to generate alpha in an evolving economic landscape.
Deep dives
Market Corrections and Historical Context
The podcast discusses that markets spend about 30% of the time in correction territory, defined as a decline of at least 10%. Historical instances highlight significant downturns, such as COVID, where the market plummeted 40%, and the 2008 financial crisis, where it fell over 50%. Understanding these frequent pullbacks is crucial for investors to develop resilience and maintain diversified portfolios. Past experiences show that investors who weathered these challenges often see positive returns in the following years.
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