In a year that has been characterized by the COVID-19 pandemic and the swift response of central banks around the world, the health of global capital markets has been front and center. BNY Mellon Wealth Management CEO Catherine Keating weighed in on this topic on Monday in a virtual panel discussion at the Milken Institute Global Conference.
Keating addressed several topics in the conversation, including recent fiscal and monetary stimulus, the risk of inflation, the aging of the world’s largest economies and the rise of the retail investor. She was joined by Scott Minerd, Chairman of Investments and Global Chief Investment Officer at Guggenheim Partners, and Rajeev Misra, CEO at SoftBank Vision Fund. The discussion was moderated by Erik Schatzker, Editor-at-Large at Bloomberg Television.
A few highlights:
On the contraction of the global economy amid COVID-19: “We look at the fiscal stimulus as the bridge to the vaccine and to improvement in the virus, and we look at the monetary stimulus as something that will have a longer life as the economy continues to heal.”
On inflation: “No investor can take his or her eye off of inflation. It has enormous impact on the accumulation of wealth over time.”
On 60% equity / 40% bond allocation portfolios: “The 60/40 portfolio isn’t going to do for you what it used to do. If you look back at the last decade, a well-diversified portfolio probably [generated] about 7%. Looking ahead, without any adjustments, that will probably be about 5%.”
On the election: "For individual voters, the election is about politics. For the markets, it’s really about policy."
Watch the full replay of the panel discussion here.