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00:00 Speaker A
a lot of momentum Matt, but, you know, big picture, your advice to your clients here in 2026, you say, prioritize disciplined risk management. How do you define that, Matt?
00:10 Matt
Yeah, it’s starting with income and producing income for clients and investors and thinking about how to do so in a risk managed way. So it’s a higher quality, uh tight tilt. We’re still getting attractive income out of the bond market. We’re able to lock in these yields as the short end and short-term interest rates fall.
00:32 Matt
You know, money markets have seen massive inflows. There’s $7 trillion dollars sitting in money markets. And what we’re just advocating for is locking in that capital into higher quality bonds that can provide income for years. On the equity side,
00:50 Matt
it’s hard to get much more out of the valuations. Uh we’re already stretched. We were stretched coming into this year and earnings just powered through. We want companies that grow earnings all over the world. We’re looking for high quality companies with good earnings momentum. We like that more than just the price momentum. So it’s a higher quality tilt around portfolios starting with the fixed income side and then even thinking about it in your equity part of the market, too.
01:21 Speaker A
You you mentioned earnings growth, Matt. What are your forecasts for profit growth this year? What are you expecting?
01:29 Matt
More like, I’d say kind of high single digits. So 5 to 10%. Um, right now the street is looking for nearly 15%. That’s the consensus. That looks optimistic to us because you’re caring on top of a huge base. This year is going to be a high bar to go against into 2026. Um, just because earnings growth was so robust. And analysts were really offsides on it all year long. After April, really, earnings just turned up and they just kept rising.
02:00 Matt
Next year, we think we can do high single digits. We think that’s what you get in return out of equities from here. But it’s going to be with a lot of volatility because it’s go there’s a lot of markets, pockets of them that are getting traded and retail investors are coming into this market all over the world and trading markets like a behavioral way that is, you know, often leads to fast moves up and fast moves down. So we’re really trying to think about this more strategically, thinking about it less as a trader, more as a long-term fundamental investor and finding those companies that have the best earnings growth around the world.