Let's bring in our first guest.
Julian Koski is chief investment officer at New Age Alpha.
Nice to see you here today.
Very grateful for your time, kind of top of mind for a day like today.
It's nice to see green on the big board, but it's the first time in about a month or so since mid to late July.
We actually have a down week for the markets.
What most stood out to you these last few sessions?
Well, it's, I tend not to look at trends through the weeks or the months.
I look at it on a long term basis and what we see is really a healthy economy.
We don't see the kind of stress that you see in the markets right now.
It's very much behaviorally driven.
There's always somebody wanting to talk down possible recessions, possible something bad, but it hasn't showed up in the data.
The American economy is large and it's resilient and until we see some Of the bad things that are going on, things like inflation, oil showing up in the data, it's not time to react.
So I tend to look at things more long term.
I don't see the kind of risk that maybe is being seen right now.
Up and down markets are going to happen all the time, of course, with eyes on the big picture, what is there for one long term story, one long term reality, Gillian, about these markets that you think we should be paying a little bit more attention to?
I think at the end of the day, in the last 17 years, there have been almost 40 drawdowns in the S&P 500, negative drawdowns.
If you had stayed 80/20, 71% of the time, you would have outperformed.
So stay the course.
A lot of what's happening in markets today is V-shaped, it's reactionary, and the, the, the goal should be to stay in the market.
No evidence to suggest that it's the kind of risk we saw in 2008.
That was the only one time where the signals said go to cash, but all the other signals say no, stay 80 to 20, at worst 60 to 40, but stay in the market.
To be clear, when you say 80 to 20, you mean equities to bonds, correct, to fixed incomes.
So you mentioned bonds.
Let's talk fixed income, because the bond market flashes us some warning signals that simply cannot be ignored.
We had this kind of.
Treasury buyback program.
I don't, maybe it's too soon to tell quite yet if we really had the desired impact that Secretary Bessett wants.
What did you make of that and more broadly, how are you thinking in particular of that long end of the yield curve?
Well, again, I think that what Secretarycent did was noble, but you have to do it for a long time and with a lot more money, and I think that the markets in the of the day triumph, not for any individual person.
I think high interest rates again, it's not quite clear if it's actually manifesting in the underlying economy.
It could have an offsetting effect on inflation, which is not actually a bad thing because that is the one concern that we do see in the markets right now is inflation.
So it's all about tradeoffs.
What are we trading off?
We are trading off higher interest rates for maybe lower inflation.
And again, is this a long-term persistent problem, or is this something you know that could change?
We're in a political environment right now.
We're in an election year, right?
So you know a lot of what's going on right now.
Now I'm not going to use the word manipulation, but sort of one has to look at that.
That's why to me it's like stay the course, stay with your 80/20, don't worry about what you see.
Going on, it might not manifest.
It might, but then you'll manage your risk downward from there.
But right now, don't react to it because you are becoming the bigger risk by reacting.
Julian Kosky, chief investment officer at New Age Alpha, was this the first time you've been on the show with us here on Taking Stock?
Yes, a terrific first appearance.
Please come back and see us again.
Enjoy your weekend.
Grateful for your time.
