Michael Arone: 3 Investment Strategies for the Rest of 2024 and 2025

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Hello and welcome to Barron's The Way Forward. I'm Greg Bartlett, and my special guest today is Michael Arone, Chief Investment Strategist for State Street Global Advisors, which has about $4.4 trillion in assets under management. Today we're going to discuss the markets, the economy, the Fed, the presidential election, and importantly, how investors should position their portfolios for the rest of the year and for next year as well. Welcome to the podcast, Michael.

Thanks, Greg. Happy to be here.

My pleasure. Now, we are interviewing this at a really interesting and important moment. It's the 19th of September, and the Fed cut rates yesterday by a half a point. And as we're speaking now, futures are surging. The market will likely be surging. Now, you're probably listening to this a few days later, but I just want to set the stage for exactly when we're having this conversation. So first, Michael, tell us a little bit about yourself and what you do at State Street, and then let's jump into the markets and discuss strategies that investors can enact.

Sure. I've been at State Street Global Advisors for 26 years. I've done a lot of different things over that time. I actually even spent some time in London from 2008 to 2011, but for the last 10 years, I've been the chief investment strategist for our SPDR ETF business. And in that role, I primarily do 4 things. I do media engagement similar to what we're doing right now today. I meet with our clients, both institutional clients and wealth management or financial advisor clients, to talk to them about the markets and ways in which they might use ETFs in portfolios for their kind of beneficiaries or their clients. I also write some of my own content, most notably under this title Uncommon Sense is the primary way which I deliver that. And I also speak at a lot of industry conferences. And so as we're chatting, I'm here to actually present at one of the Barron's conferences for the top advisors in the country. So those are primarily the 4 things I do as the Chief Investment Strategist for SPDR ETFs.

Okay. Now for advisors and other investors listening, there is so much happening right now in the market. Given your expertise and what you do, let's try to dig into this and discuss, you know, what are some good strategies for investors?

Right. So I think from our perspective, I think that the soft landing has already happened. So there's a lot of debate whether soft landing, hard landing, or we're headed towards recession. My contention is that the soft landing's already occurred. So why I say that, Greg, is that last year in the third quarter, US GDP was growing at an annualized rate of 4.9%. This third quarter in 2024, it's likely to grow at about 2% based on the Atlanta GDPNow forecast. So it's clearly slowed, but it's not recessionary. When we look at the labor economy, unemployment's gone from 3.4% to about 4.2%. And you mentioned that the Fed met yesterday and cut interest rates for the first time since March of 2020. So Chairman Powell and Fed officials acknowledged that the labor market has weakened, but in historical terms remains pretty strong. Inflation is on the trajectory towards the 2% target. And when we look at consumers, high-end consumers in particular, those that are in the top 20% of income earners who are responsible for 40% of spending in the US are in great shape. Their earnings are growing, they're fully employed. They own 85% of the stocks, 80% of the bonds, two-thirds of money market funds or kind of demand deposits that are yielding roughly 5% or so as we're chatting today. And they only own about a third of the credit card balances.

And they also have done well. A lot of them own real estate and have seen big gains.

Real estate, absolutely. So their assets have grown dramatically and they're fully employed and they are in good shape. So certainly spending has slowed from the revenge spending post-pandemic, but the high-end consumer's in good shape. And finally, companies are in good shape. Earnings, as you know, are growing by double digits and profit margins are exceptionally high. So when I put that all together, Greg, the soft landing has happened. What I'm concerned with is a lot of that, I believe, is already reflected in asset prices, valuations, credit spreads, and most measures of market volatility. So I think the risks are skewed to the downside. And I think investors need to think about what that means for their portfolios going forward.

Okay. And, um, Can you be more specific then? What are they and what are some investing ideas?

Certainly. So when we wrote our mid-year outlook, we typically write that at the end of May. And one of the key themes of that outlook as it relates to equity investing was to diversify beyond mega-cap stocks. So it was our view that as interest rates were expected to fall, as the economy slowed, inflation cooled, and the Fed began to cut rates, that as that occurred, rates would fall. Inflation is kind of slowly cooling from that standpoint. The yield curve has now— is not inverted anymore. It's normalized. It's steepened. And so from that perspective, we anticipated that ultimately you'd see this rotation or transition in leadership. And what's interesting, Greg, is this has been unfolding now for months. There's this view that all of a sudden tech stocks, you know, are kind of out of favor. In fact, NVIDIA hasn't hit a new high since June. Tech has not been able to regain leadership since the early August volatility. And ultimately, as rates have fallen, inflation has cooled, the Fed's expected to cut rates even further, and they suggested that yesterday, and the yield curve has normalized, you've seen a massive rotation into financials, real estate, staples, utilities, industrials, value versus growth, small versus large. So it was our contention that as that transpired, as rates fell and inflation cooled and the Fed cut rates, that ultimately that transition would occur. It has been occurring. And we do expect that going forward, this will continue. So diversifying beyond just the concentration that we have observed in 2023 and the first half of 2024?

It's really interesting. I, uh, if the year to date, the key indexes have all outperformed the small-cap Russell 2000. So you had the, uh, S&P was up about 18%, NASDAQ over 16%, Dow roughly 10% or 9.5%, and Russell just a little below that. But in the past 6 months, the Russell 2000 has beat all of those indexes quietly. So it's kind of like the inertia, the Tech, tech, tech, everyone's aware of the weakness, but what's getting far less attention is, to your point, the gains elsewhere in the market that are just quietly marching higher.

And that's what creates the opportunity is that investors are often slow to react. Then all of a sudden they wake up and realize, oh boy, this is happening. And then that momentum builds. So as it relates to small cap in particular, again, when you start with high rates and high inflation like we did, and they begin to fall like in the early 1980s, those are tailwinds for small-cap stocks, as are tight credit spreads, which we have, as is a weaker dollar. So the dollar has actually been weakening as expectations for Fed rate cuts have been increasing. So all of those typically result in tailwinds for small-cap. Now, the thing going into 2025, Greg, that I think is important is that the earnings growth for small-cap versus large-cap. Large-cap has dominated, but that's expected to change in 2025. And that earnings growth is expected to compress at a time when small-cap stocks are cheap. And so interestingly enough, you also have these other mean reversion characteristics. And what I mean by that is when we look at the Russell 3000, the total market, small-cap as a percentage of that total market is at 5%. That's the lowest it's ever been. And we know that 3 companies individually make up more than all of small-cap market capitalization put together. So when we take those 4 tailwinds combined with the fundamentals in terms of the cheapness and the earnings growth compression combined with the mean reversion, we think small-cap stocks is a way to diversify away from those mega-cap stocks, not only for the rest of this year, but into 2025. The key risk is if we enter recession. So our view is, again, if that soft landing outcome remains intact, small-cap stocks could outperform.

Okay. And now digging a little further into small caps, is the skew or is the bent more towards growth, value, or are you kind of agnostic on that? Or what are your thoughts on that point?

So we really have a preference for quality small-cap companies, and I kind of chuckle a little bit when we talk about that. Quality is definitely in the eye of the beholder. But when we look at the Russell 2000, for example, the history is, is that coming out of the early 1980s period, again, that was characterized by high rates, high inflation that was cooling, led to a massive small-cap rally. There was a view that this market was inefficient, and institutional managers began to do dedicated small-cap searches, and active was viewed because of the inefficiencies as the way to go. And again, not in any kind of in a malicious sense or any kind of malicious way, but active managers picked the Russell 2000 as their benchmark because it was easier to beat. And ultimately became the de facto small-cap benchmark. Now, more than 40% of that benchmark doesn't earn any money.

Right. That's one of the common criticisms.

Absolutely. It's not profitable. So when we look at the way the S&P builds their benchmark, the S&P 600, which is their measure of small-cap stocks, it requires several consecutive quarters of profitability to be included. So we think when we look at this over time, and you look at things like return on assets, return on equity, return on invested capital, it's much higher in the S&P 600 than the Russell 2000. The companies are more mature. They're about 12 years old on average versus a far lower number in the Russell 2000. And then ultimately we believe over time this leads to better performance. We like the quality small-cap and the S&P 600 as a way to get that exposure.

[Speaker:HARRISON] OK. Where else, just while we're talking about equities, where else do you have high conviction? We mentioned steering away on a relative basis from big-cap tech, foreign stocks, highly rate-sensitive things like REITs. I'm just curious, where else do you really You put a stake in the ground. Right.

So I think the market is definitely transitioning from getting ahead of the Fed to don't fight the Fed. And under this scenario, it's interesting if we keep pointing to 1995 as a potential corollary. So it was the last time the Fed engineered a soft landing. I can't express or emphasize just how rare soft landings are. So if we believe that this is another one, In 1995 is our more recent kind of example. In the 6 months that followed the first rate cuts in 1995, things like healthcare, staples, financials were leadership. And when we look at that, it's certainly kind of what's been transpiring over the last several months. And we anticipate that that could be the case again. Those stocks are inexpensive relative to the broader market. They have some good growth characteristics, some defensive properties, some bond proxy-oriented income that's important. So as rates fall, as the Fed cuts rates, as the yield curve becomes normalized, steepens, it's not inverted any longer, historically what works well are bond proxies, income plays, interest rate beneficiaries. So when I look at things like healthcare, staples and financials, it's the right or nice mix of those types of properties.

Okay, and is that bullishness generally, I don't know, to put a timetable on, is that next 6 months, year or 2? I mean, it's hard to put a timeline on it.

No, I think it's definitely the next 6 to 12 months, and that's consistent with what we saw post the first rate cuts in 1995. And interestingly enough, Greg, in the 6 months following the first cuts in '95, that other soft landing, tech had put in its high and ultimately was the worst-performing sector. Now, I'm not predicting that tech will be the worst-performing sector this time around, but it just goes to indicate— and we know that history doesn't repeat itself, but it rhymes— that ultimately you saw a transition in leadership. We've been quietly under the radar seeing a transition in leadership again this time, and we think that that will persist going forward.

Okay, now per the Fed and the half-point cut, you know, obviously it was discussed ad nauseam. Historically though, when the Fed cuts by that much, there's often some duress or something going on. So the messaging by the Fed and generally the market response has been like everything's fine. But for the skeptics, I'm just curious, what would you say that if things are going so well, why wouldn't a quarter point suffice? I'm just curious, especially, you know, in the context of an election where things are magnified. I mean, I'm just, I'm not saying I per se believe that that was the right point. I'm just kind of putting out that argument.

I was a bit surprised that they went by half a percentage point yesterday. That took me a little bit off guard, admittedly. And so from my perspective, the economic data suggests we're not in recession. I think Powell is a student of history and Volcker in particular, and is concerned about reaccelerating inflation. And finally, I thought that they would shy away from it because the election is around 50 days or so from now, and I think they wanna maintain their integrity and their kind of independence, so to speak, or not be viewed or painted in that light. So I thought it was gonna be 25. What I found really interesting, Greg, is in the statement and in the post-meeting press conference, Powell kept emphasizing that the economy was expanding at a solid pace, that inflation, he was reluctant to declare mission accomplished. And ultimately he kept emphasizing that the labor market was in good shape, although it had weakened, historically was in good shape. So it really did beg the question from my perspective, why half a percentage point? And I wanna give you some quick context on this. Since 1994, which is when the Fed began, they had to reveal what their kind of results were from the FOMC publicly. That started in 1994. Yesterday was the 7th time that they started cutting interest rates. And so there was 3 other times before yesterday where they cut interest rates by half a percentage point to start the rate-cutting cycle. They were 2001, we were in recession following the TMT bubble bursting. 2007, we were on the onset of the global financial crisis. In March of 2020, during the COVID-19 pandemic. So I was a bit shocked that they would take such an aggressive stance yesterday, given that I don't believe that we're in any of those situations. The economy is expanding, inflation is cooling, but is above target, and the unemployment rate is in good shape. So I was a bit surprised by their move. I think it's an admission that they were behind, or they're fearful that they're behind. And that they missed an opportunity in July. And this is a bit of a catch-up. They kept talking about recalibrating, recalibrating. To me, that's just the same thing as saying we're behind the curve. We missed the opportunity in July. They just don't want to admit that potential, not mistake, but that potential missed opportunity.

Yeah, I think that makes sense. And I do think they mentioned the word recalibrate 9 times, I believe, 7, 8, 9 times anyway. But that was kind of the word of the day. But that explanation makes sense if you think about it, because You know, a few years ago we were told repeatedly that inflation was transitory, right? In nature, transitory, transitory, transitory. Oops. You know, rapid set of hikes. And to your point, I think that let's just use, you know, simple language here. If they were wrong, then they are late. They don't want to be late twice. So they might err on the side of being like, hey, let's be aggressive because the worst thing might be do a quarter point and then they're, you know, so that might be informing that. But who the heck knows?

Right. And at 5.25 to 5.5, where the target Fed funds rate was before yesterday, and their preferred measures of inflation around 2.5, that is restrictive monetary policy. And so if you are going to begin to adjust the policy rate to become less restrictive, you might as well jump in with both feet in the beginning. And so I think that's ultimately what they did. I think they feel like they can do this aggressive move now and adjust later versus the mistake of staying too tight for too long. And I think that's the choice they made. And what was interesting too is for the first time since 2005, there was a dissension. So clearly it wasn't a slam dunk. There was some debate by Fed officials on how aggressive to move. But ultimately, I think Chairman Powell won out and half a percent is what we got. And at least for today, markets are celebrating.

Exactly. Exactly. Okay, so let's go back to the investment strategies. We talked about diversifying beyond, you know, mega-cap stocks and tech stocks, etc. Let's talk about more credit, you know, rates. What are your takeaways?

So what's been interesting over the last little bit here is that ever since 10-year Treasuries broke through 4%, which was way back in September of 2022, investors have been either flirting with or extending maturities, lengthening duration. So the expectation is, is that as interest rates fall, price would improve dramatically there, but it's been as volatile as the stock market. And so it's been somewhat of a wild ride. So our view is that ultimately as rates fall, slowly but surely money market fund rates will fall. It won't be in tandem, you know, one for one, there will be a lagged effect, but ultimately,, you'll see those rates fall, and investors will need to search for higher yield. For us, I think for the conservative investor, short-term Treasuries, about 2 years, or intermediate-term Treasuries make some sense. For someone who's willing to take on some greater credit risk, investment-grade corporate bonds with intermediate maturities. You don't have to give up as much yield relative to today's money market fund yield, and should rates fall, you will see price improvement. That seems like the sweet spot. Now, we also believe that credit has been far more stable than anyone anticipated because the recession never materialized. So ultimately, we talked up front early on when I talked about the soft landing, that corporate profits are growing, profit margins are very high. They've been expected to come down, but they continue to expand. Interest coverage ratios are good. So when you look at bond investing, there's all this kind of discussion around price volatility as it relates to interest rate movement. But ultimately the return you often receive in bonds, and I read this in Barron's by the way, is the starting yield. And so ultimately when I look at starting yields for credit in high yield bonds or loans, there's 7, 8, 9%. And price changes have very little to do— in fact, they detract a little bit over long periods of time. So the point I'm making is credit's been far more stable. Yields are much higher, 300 to 400 basis points above Treasuries or the aggregate index. Although not for the faint of heart, if you believe in the soft landing outcome, those yields may be realized and are significantly higher. Similar to the small-cap call, The risk here is that the economy is going to go into recession. That would be problematic for credit spreads, but that's not our call. That's not our expectation. We expect the economy to continue to expand, albeit at a slower rate going forward over at least the next 12 months or so.

To that point that you just mentioned about the importance of the starting point on yield, someone— I might— I'm paraphrasing, but the distillation of the idea was that yield is destiny. Which I thought was a great way to kind of cut out a lot of the extraneous noise, kind of because sometimes, you know, depending on your time horizon, people are very much backward-looking with investing often, and they see all the down arrows in their portfolio for bond holdings, and it's like, well, okay, but.

Right, and I think investors have been far more willing to, I don't know, speculate's too strong a word, but to try to time movements in interest rates. And getting that call is incredibly difficult and has proven to be this time, especially coming out of the pandemic and some of the unusual circumstances we find ourselves in. It's been as volatile as stock market investing. Meanwhile, credit has been incredibly stable because companies' earnings are growing, profit margins are high, and interest coverage ratios are good. So Picking up 300-400 basis points, or 3-4 percentage points above the aggregate index, which is most everybody's fixed income benchmark, or Treasuries, isn't for the faint of heart, but it could be a good potential opportunity for fixed income investors. So really, the conclusion is to barbell, moving one step away from money market fund instruments because you're going to have reinvestment risk as yields fall, to things like shorter duration investment grade corporate bonds or treasuries, and barbell that with some credit risk, in our opinion, because we expect that the economy will continue to expand at a slower rate, but not enter recession. So that's the barbell approach that we have. We think longer maturities will continue to be volatile.

And a lot of that volatility, you know, really, I don't know if it kicked off, but was particularly pronounced in 2020, to when stocks and bonds get hammered. And that was a wake-up call for so many people to see that price action.

So I think there's two things to think about here. One, that we've been talking a little bit about 1995 as the last soft landing. And interestingly enough, and again, you did a nice timestamp as we started our conversation. Interestingly enough, post the half percentage point rate cut yesterday or on September 18th, Ultimately, interest rates increased a little bit. And I think that caught some by surprise. So in 1995, after the first rate cut by the Fed and that previous soft landing, for the next 8 weeks, interest rates actually bounced a little bit higher. And then, then ultimately came on their trend in '96 to go lower. So it speaks again to the volatility and a little bit of the counterintuitiveness of what could happen. The second point, I think, is that ultimately the fiscal position of the US is in far worse shape today than it has been in previous, and the wiggle room is shrinking. So Treasury debt to GDP, 108% today. In 2018, it was 84%. In 2008, it was 42%. For the last 35 years, interest costs have been falling. That's allowed us to spend more than we take in. We as a country, as a US, and ultimately reduce taxes. That is changing. And I think more and more treasuries need to be issued. So there's been a 41% year-over-year increase in treasury issuance through the first 6 months of this year. Last year was a record. We'll break that record again. And ultimately all of that supply needs to be absorbed. And I think that could lead to higher interest rates than expected or more volatile or both. Again, I think there is a little bit of this notion that taking on longer maturity interest rate risk could be a little bit more dicey than it has been historically. We don't know that, but meanwhile, credit risk and companies are in good shape, and they continue to be in good shape. That seems to be an interesting trade-off because I can pick up so much additional yield relative to those long maturity bonds.

Okay.

And another thing in terms of macro volatility, well, let's talk about real assets. I know that you were bullish on gold at the end of 2023. I saw an interview and we're up about 25% year to date. Gold or any other things. Let, tell me about that. The role of real assets.

Yeah. So in regard to that call, a broken clock is right twice a day. So it's better to be lucky than good. So I appreciate you flagging that and praising me or kind of showcasing for the audience that, we got something right, so thank you. I think this is a bit more of a structural— so this isn't, hey, the next few months, the next year per se, a little bit more of a structural change. So the way I think about this, I've been in the buy-side asset management industry for around 30 years now. I view that as a short amount of time, but throughout that period, the global economic superpowers have had a peacetime dividend. And we've had globalization, and both of those things led to lower rates and fairly benign inflation. I think, and so under those conditions, the 60/40 portfolio did well, stocks did well, long duration assets, credit bonds did exceptionally well, 40-year bond bull market up until 2022. And so my view is, is that you could make an argument or a thesis that those things are shifting. We're moving from a unipolar world to a multipolar world. It's clear that Iran, Russia, China, North Korea are testing the US's resolve, and that's increased geopolitical risks. So that peacetime dividend is at risk. Now, again, I'm not warning of World War III, but certainly there's this kind of transition that is happening. And both under Trump and Biden, there's been a desire for US to focus more on domestic policy. Versus foreign policy. And I think that'll continue under either Trump or Harris going forward. We're in deglobalization now, and that could prove inflationary. We're taking on a multi-decade transition from fossil fuels to something else. That's proven more inflationary than anticipated. We just talked about interest rates. So my view is structurally going forward, interest rates and inflation may be a bit higher than the QE period from 2008, to 2020 or 2022. And so under that, your stocks will continue to do well. Stocks are a great inflation hedge and have proven to be again this time, but your bonds may not do as well. And that's what we have been observing. The last 4 years have been a really challenging period for bond investors. So all we're suggesting is that under a higher rate, more inflationary period, including more real assets into a diversified portfolio may make some sense. Now, I'm only talking 5-10% that can either be paid for out of cash, if cash balances are elevated, or taken equally from equities and bonds. Greg, when we think about this, diversified real assets would include things like real estate, commodities, natural resources, infrastructure, gold, industrial metals, and the like. And some of these investments have income. So you can get a diversified real asset portfolio that generates a yield of around 3.5%. That's consistent with where 10-year Treasury yields are today. And it's a better hedge against interest rate volatility and inflation. I believe it's under-owned, under-appreciated, and there could be this opportunity kind of moving forward. To include more of those things in diversified portfolios under those kind of conditions of greater rate volatility and potentially higher inflation. I just want to finally make it clear, I'm not suggesting a return to the 1970s. I don't anticipate that. But what's been clear is that in the QE era, rates have been artificially low and inflation has been benign. Those things may be changing directionally to be a little bit higher, Even Chairman Powell recognized yesterday in his post-meeting press conference that the neutral rate that neither stimulates the economy or restricts it is likely higher than they anticipated. And so again, this idea that rates are more volatile, a little bit higher, and inflation may be a little stickier than anticipated. He also acknowledged that, yes, a lot of progress has been made, but we're still above the target. So we think that real assets could help in diversified portfolios help kind of manage that environment. Okay.

And within the universe of real assets, do you have high conviction on any one or two, or do you generally recommend a more diversified approach to investors for the amount that they allocate there to kind of spread their—

We prefer a bit more of a diversified approach. And the reason why I say that is many investors that I meet with believe, oh, I own gold, I own TIPS, I have a kind of an inflation hedge. And to me, it just doesn't go far enough. So we think having that diversified exposure to a broader set of real assets makes more sense. Certainly at certain periods of time, some are better relative value opportunities than others. So right now we do like gold. We have liked it for a while. We continue to like commodities and natural resources relative to TIPS, for example. And so we think that some of those kind of can change, but we think that ultimately as it relates to real assets, investors are underexposed. They don't own enough of them or enough of a diversified basket of them. And we would suggest including kind of components of all those things.

Okay. Let's see. What else should investors know? Anything else that we haven't talked about that you think is worth keeping in mind?

Well, I think the last thing is we are roughly 50 days or so ahead of the U.S. election. And I was actually in Toronto visiting clients about a week or so ago. And I'll tell you, Canadians are obsessed with the U.S. elections. So what we've really been encouraging investors to think about is that yes, when it comes to elections, you should be passionate. You should be passionate about policy, your candidate, your party. You should be involved, you should vote, and you should be engaged. But when it comes to your investments, being more objective is the way to go. And so ultimately, when it comes to your investments, when we look at market history, whether it's been a Republican president, Senate, House of Representatives, or Democrat, President, Senate, House of Representatives, those two things rarely happen, or any mix thereof, statistically we cannot say that any one mix is better than the other. And so we tell everyone, yes, be passionate about policy, passionate about your candidate, get out there and vote, do all those things. But when it comes to your investments, don't overreact. And in fact, when clients overreact and they begin to make sizable adjustments to their portfolio because their candidate won or lost, Ultimately, it's proven to be a big mistake. And so that's one thing I would say as we're kind of 50 days or so headed to the election. The other thing I would say is that there are some things that are somewhat counterintuitive that investors should think about. So there are some things that happen at the sector or industry level based on who wins and loses, considered what policies might come forward. So I think it would surprise many listeners to know that under the Trump administration, energy stocks underperformed and clean energy investments soared. So drill, baby, drill wasn't necessarily good for traditional energy companies. You increase the supply and then the price goes down and ultimately they earn less money. Consequently, under the Biden administration, energy stocks have done very well and clean energy investments have been a disaster. And so again, here, I think when you don't drill on federal lands, when you cancel the pipelines and things like that, and you curtail the supply of oil, it increases its prices and the companies do a bit better. The point I'm making here is that there will be at the margin, some things that change at the sector and industry level, winners and losers, but sometimes they're a bit counterintuitive. And we think about dimensions, things like healthcare policy, tax regulation, trade, et cetera. Depending on who wins, you'll see some movement, But we encourage folks not to overreact too much.

That dynamic you just described is really interesting. And I, I would almost characterize it as unintended consequences. And you see this manifest itself in so many ways. It happens in politics, investing, et cetera. On paper, there's a plan. And if this happens, this should happen and that should happen. And so often some wildcard thing emerges and, you know, everything changes.

Right. And that's why for me, that was the draw to this industry and the markets and the asset management industry. Industry and investments broadly. They're complex, they're dynamic, and every little piece of information that we read in Barron's or anywhere else ultimately has an influence on something somewhere. And sometimes it's intuitive and sometimes it's counterintuitive. And so it's just an incredibly exciting time. You mentioned up front in our conversation, right? There's so much going on. There's the election, monetary policy, fiscal policy, foreign policy. So there's always something interesting, curious, and things don't always go, you know, best laid plans, they don't always go in the way that you think. And so for me, that's the draw and the excitement of our industry.

I would put it exactly as you just said it as well, personally. I just love how, you know, at any given moment in time, you can take, if you will, a snapshot of the markets, like stop, what is each index at? What are rates? What's the price of this? What's the whole backdrop? And, you know, seconds later, everything is going to be different. Weeks later, even more different. And I think it's just a fun and fascinating thing that everyone has, well, more or less access to the same information. But you know what I mean, in broad strokes. And it's— yeah, it's a great intellectual venture in addition to being incredibly important. Well, I think on that high note, this is a nice place to wrap up. So thank you so much for joining.

My pleasure. I enjoyed it.

This was a lot of fun. Excellent. Excellent. Well, my guest has been Michael Larrone. For more podcasts and the latest wealth management news, visit barons.com/advisor. For The Way Forward, I'm Greg Bartalus.

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