00:00 Speaker a
You have three basic market drivers that can guide you in your approach to equity allocation. Take us to those.
00:07 Alessio de Longis
Of course, the biggest theme next to the stock sell-off is to make investors obviously pay attention and argue more defensive postures, and the biggest theme that is now emerging is also the shift from US stocks to international developed markets, especially from the perspective of US household investors. The story of the exceptionalism in the United States has dominated the global stock market for 15 years, and we are beginning to see some cyclical catalysts, but long-term structural catalysts also rotate with a more balanced spin to allow this global stock exposure and to enter international stocks as well. What are the three drivers we like to watch? Relative income momentum. Relative revenue revisions have argued that European revisions have declined momentum in the U.S. due to large-scale technology sell-offs. Second, we need to see a better tone when it comes to global risk appetite. Global growth expectations are slowing down. It is not a good environment in itself and has been spinning into an international stock that is more susceptible to global trade. The third item is US dollars. For me, this is the biggest potential long-term trend in our immediate development. Both cyclical and structural developments have begun to plant seeds for long-term dollar depreciation cycles and thus the benefits of dividing diversification into international stocks benefit from this trend.
03:08 Speaker a
OK, then, investors should now consider all the key drivers you mentioned, and what type of portfolio allocation should be considered now?
03:19 Alessio de Longis
Well, the first step is always the most important decision to be relative to the stocks of bonds. Compared to the standard, for example, most investors prefer to allocate to the 60/40 distribution, uh, this is when fixed income is slightly overweight relative to stocks. We believe that this valuation still has a certain way to go. Now, it is important that in this equity portfolio you can still maintain defensive exposure through low volatility departments and defense departments. As I mentioned, make sure today you diversify it into international stocks, not just US stocks, compared to the past few years. In terms of fixed income, cautious credit spreads may widen and spread risks. Therefore, we want to invest in high-quality investment-grade fixed income.
04:42 Speaker a
You know, you mentioned the income season. What do you think are commonalities, themes, themes in this income season?
04:54 Alessio de Longis
Continuous adjustments to both topics are clearly estimates, speculations on the overall impact of trade tariffs, and impacts in all areas. Therefore, the volatility of guidance in guidance may be a big topic and the continuous reduction of AI valuation or guidance around AI. Why? It seems like a long time ago, but what happened in late January was that DeepSeek announced it was a big important development, which in itself could challenge the assumption that Big Tech nearly monopoly conditions in terms of AI R&D.
06:18 Speaker a
So with that in mind, one thing companies are talking about, it’s the uncertainty you’re talking about a moment ago, that’s the prospect of tariffs and where or not their industry is or isn’t affected. Of course, the target route seems to be a good negotiation or deal. I mean, all of this is in the air right now. So, how do investors protect their portfolio from some of these risks?
07:04 Alessio de Longis
I think you're hitting your nails. There is no rhyme or reason in the methods of committing crimes we are used to, right? So, trying to use basic analysis, well, what we could have done, trying to measure the impact of tariffs or tariffs, in this environment, isn't necessarily going to pay. So, I'm going to say that the outcome is much wider, so your confidence in the current outlook should be a discount. Well, a common topic is dollar depreciation. In my opinion, regardless of the tariffs, which sectors and how these negotiations are developing, this is one of the results consistent with the new government's desire to lower the trade deficit, a environment for weaker dollars, stronger, stronger, weaker dollars and stronger foreign currencies.
08:42 Speaker a
Alessio, I'm glad to see you in person. Thank you very much for taking the time.
08:46 Alessio de Longis
Thank you for having me. Absolutely.
