Podcast: The Future of Markets and Investing (Episode 189 of Compound Insights of the CFA Society of New York)
I recently had the opportunity to tape an interview with Gary Farber, the Director of Programming of the CFA Society of New York, for his podcast Compound Insights. In this episode of 𝘊𝘰𝘮𝘱𝘰𝘶𝘯𝘥 𝘐𝘯𝘴𝘪𝘨𝘩𝘵𝘴, I discussed the forces reshaping capital markets, portfolio construction, and the future of investing. Key themes included:
The outlook for interest rates: The dramatic upward shift in interest rates, particularly real interest rates, since 2022, after almost 50 years of secular decline. We discussed how this is likely related to the ongoing AI-driven capex revolution and rise in productivity as well as the impact on defense spending of the ongoing global geopolitical situation.
How AI-driven capital investment is influencing growth, productivity, and asset prices
Market valuations and the potential for a bubble
The implications of rising public debt, inflation risk, and fiscal policy
Why risk management may become increasingly important in institutional portfolios
The future of active management, including the ongoing rise in ETFs
Lessons for investing and asset allocation