MEGI | NYLI CBRE Global Infrastructure Megatrends Term Fund | earnings call 2026-09-15
Verbatim transcript (source: faster-whisper-small.en)

Hi, welcome everyone and welcome to this webinar from New York Life Investments called Girl Math Making Investing Work for You. My name is Lauren Goodwin and I'm the Chief Market Strategist at New York Life Investments and my colleague Julia Herman and myself are going to share some of our passion for economics, for investing with you today. We hope that you'll take away some good nuggets that can make you more interested or more educated about investing and that you can share some of those nuggets with family, friends, whatever the case may be. This is something that we're incredibly passionate about. We're also passionate about bringing more women's voices into the fray, bringing more of you into the conversation around investing. So we're really looking forward to the conversation today. Exactly. And before we kick off, I would like to share a few stats on why conversations like this one that are financial conversations, women-centric are so important. Now according to New York Life Investments own internal survey on how confident and comfortable women feel about investing, we found there have been sharp declines in the research which started in 2019 to the most recent research in 2023. A few examples I want to highlight here. Among women who are married breadwinners, just 24% are confident in their knowledge of the market, down from 65% in 2019. Only 11% of single women breadwinners feel confident in their knowledge of the market. When it comes to comfort and making investment decisions, a third of married women who are breadwinners are comfortable with this compared to just 16% for single women breadwinners. And finally, as of 2023, just to summarize, fewer than one third of any of our survey categories of women feel confident and comfortable making investment decisions. So today we want to be a small part of turning that around. Per a 2023 investment survey by Elvest, 86% of women said that investing helped them feel more powerful. And I just love that that can be a part of our work. I love that too. So again, we're going to spend some time on that together today. But first we wanted to share a little bit about ourselves, why investing and economics make us more confident, more passionate. So just to get started, share a little bit about me. As I said, my name's Lauren Goodwin and I've been at New York Life for just shy of six years. Before that I've taken more traditional economics roles in places like Wells Fargo, JP Morgan, Frontier Strategy Group. But like many people in the business, my career has not been a single solid straight line. I've done lots of different things and always really focused on where I could learn. Sometimes that's been really hard, but it's a process and an adjustment that I think really benefits our work today. Yeah, absolutely. I would love to augment that little bio of yours, Lauren, by asking you a few questions. Okay, go for it. All right, I'm going to pull up my notes here. Very critical question. What is your favorite way to spend a Saturday? Oh gosh, I love all things music. I also love all things sleeping, but my family and myself, we love to go to concerts, to just play records around the house, anything music. Amazing. What is the last book that you read? I recently read the latest book by Zadie Smith, an amazing British female author. It's called The Fraud. It's a novel, but it's historical fiction around a very real trial. It was really fun, really good. Fantastic. We read so much market information all day that I love fiction. Preach, I almost never read non-fiction out of the office anymore. All right, name one woman from history you admire, and why? You mean besides Mama G? Yes. Just to explain the joke, my mom is maybe the number one fan of our podcast, the Market Matters podcast. She's always sending feedback. Sometimes it's good feedback, sometimes it's constructive. Not always. Frankly, there aren't enough women in history, I think, that we can point to, especially in our business, but if I were to point to just one, I love a living figure, actually, Christine Lagarde, who has taken all kinds of roles in economics, finance. She's currently the head of the European Central Bank, and her fashion sense is incredible. She's not the only European Central Bank head that's on your hero's list. That is true. She's referencing Mario Draghi, who's one of my favorite ... I guess you can't even call him a politician, but political hero powerhouse. Hero powerhouse. All right, Lauren. What is your favorite animal, or rather, who is your favorite animal? You anticipated it. My favorite animal is Hank, who's my dog. He's a schnauzer mix, and he's a lot of fun. I also love penguins and giraffes, because they're weird. Okay, I love that. I love that. Speaking of penguins and giraffes, you might have already told us, what is your favorite travel destination? I love anywhere where I can hike. The next one on my list, I don't know that it's actually happening, but I would love to go on safari and see some cool animals. That would be amazing. Giraffes, especially. Now, kind of back to the reason why we're here today, what made you want to go into finance as a career? As I mentioned, I definitely didn't start out in finance, but one of the things that I think is so amazing about the sector is that we are learning every day. We are getting schooled by the market and the economy every day. No economic cycle is the same. As I moved through different parts of my career, I found that this was the place where you could just never take your knowledge for granted and always had to be testing yourself, which I really love. That's so wonderful. All right, we're going to pivot to me now. As Lauren mentioned at the top, my name is Julia Ferman. I am a global market strategist here at New York Life Investments. I've been with the firm for about two years and been in the industry about nine. I came from the world of emerging markets for the first five years of my career, which I think really teaches you how to analyze a country, how to work in a bunch of different environments. It's very exciting. In terms of degrees, I have my undergraduate degree from the University of Notre Dame, Go Irish, and I went to the Johns Hopkins School of Advanced International Studies for my master's. I'm going to hand the interview power over to you, Lauren, and I await your questions. I don't know that this was a forum where we were allowed to root for Notre Dame. I don't know that that's appropriate. I know that you're a big hiker. What's the hardest hike you've ever been on? Ooh, okay. There's been some hard ones. I'd say the hardest was Mount Fuji in Japan, which was actually a bit of an homage to my dad who was deployed there after 9-11, and he did the hike. He came back with this amazing hiking stick with brands in it from each station of the hike, and I decided I had to go get one for myself. It did not come easy because there was a typhoon the previous day, and there were still typhoon-force winds. I came back with a lot of volcanic ash in my hair and in my skin. Crazy hike, but so rewarding and so wonderful. I was going to ask if you can actually go to the top of Mount Fuji and jump into the volcano or how high you really get. Jumping isn't encouraged, but you can see in there. You really can. Wow, that is so, so cool. If you were not in finance, what would you be doing, do you think? I'd be a travel blogger. I love to write, and I love to travel. Ideally, I could do both at the same time. I deal with a penguin and a giraffe on either side of me. One tall, one short. Tell me a little bit of a different take on the question you asked me earlier. Tell me about one woman in your educational or career path that's made a big difference for you. Absolutely. I will spare her name for her own privacy, but there's a former Boston mentor of mine, other than this wonderful woman here, who made a really big difference for me early in my career in emerging markets. She was so generous with the information that she shared with someone who was so young. She gave me so many opportunities, probably before I really earned them, honestly. I learned a lot about the field, but I learned a little bit more about how to navigate a career as a woman in finance. Ultimately, something that I learned from her, and generally, is all we have as professionals at the end of the day, is our integrity. A small kindness for a junior person now could end up being an incredible, fruitful career relationship that you can have. Knowing that everything always comes back around is really important. That is so... I have goosebumps. That's so beautiful. Maybe for our younger participants in the audience, it's also maybe an example that trying hard really matters. People see that. That's wonderful. I know that you're an English speaker, obviously. You're also a Spanish speaker. If you could learn another language, what would it be? Yeah. I tried to learn a little bit of French and a little bit of Portuguese, in addition to my Spanish. Everything just got jumbled up in my head. I'd be speaking Spanish with a French accident and calling it Portuguese. I would like to depart from that. I'd probably love to speak Mandarin Chinese. Sounds hard. Yeah. That probably takes a little more than playing on an app, but maybe that's just my lack of affinity for a language. I know that you love baking, but if you could only make and eat one meal for the rest of your life, would it be baking or would it be something else? I don't know how far my sweet tooth would get me in terms of a lifetime, but if I had to focus on just sweet treats, I'd focus on cinnamon rolls. Yum. Yum. We haven't gotten any cinnamon rolls in the office yet, just as a note for our listeners here. Then finally, now we'll edge into some of the real content for today, but what made you want to get into finance as a career? Yeah. I think for me, using the global financial world as a way to understand how things work and why certain countries get along or don't, and how certain relationships have formed is really important. Wow. That's very powerful. Now that we've established why we care about the economy investing, I think it's a good idea to get into why the economy is so important for investors. This is something that in our work, it almost comes as a given, as economists by background, market strategists now in our roles. This is a connection that we're making all the time, but I think it begs the question why? What really is that link between the economy and markets? For us, links to why we think everyone, but especially this deficit that you mentioned in terms of women, can and maybe should be investors. Exactly. I think the two portions of the economy that come to mind for most people when we're talking about this are jobs and inflation. When jobs are available and well-paying, the economy feels strong. When life feels affordable, when we can afford to take that vacation, when we're not feeling sticker shock at the grocery store, the economy feels stronger. As it happens, not only are these two factors key determinants of investor and consumer sentiment, they're also the two most critical areas of data that we as professionals track when we're assessing the economic outlook. For the past few years, we've seen a bit of a trade-off here. The job market has been very strong. We just have been rising across sectors, and that's helped to keep consumers afloat, and that makes sense, right? Really what I'm saying there is that when you are making a little bit more of a wage, that's a little bit more money that you can spend. But even with a strong labor market, historically high levels of inflation have been eating at people's wallets. So you might have more money from that higher paycheck, but it's buying the same amount of goods or maybe even fewer goods. I don't know if you've been to a grocery store lately, but certainly where Julia and I live in New York City, it's been pretty crazy to see the price differences over the past couple of years. Now, price growth itself has been coming down this year, but price levels are still well above where they were before the pandemic. They certainly are, Lauren. Now, beyond what we just discussed, jobs and prices, I want to highlight a few other factors that can influence the path of the economy and also inform us practitioners and investors about the path of the economy. The first is the global outlook, specifically how the U.S. economy is faring relative to other major economies. For example, an expansion in the U.S. might not feel as wonderful if the rest of the world is expanding as well. Number two, the stock market. Now, volatility affects us all, right? When asset values are going up and down in crazy fashion, it can contribute to a lack of confidence in investment goals. When asset prices are doing well, for example, home prices, stock prices, there is what we call a wealth effect where higher asset values that we own can encourage us to spend elsewhere, maybe by taking that vacation. I also want to highlight loan activity. This is a big one. From getting a mortgage to getting a loan for your small business, how easy or expensive it is to get a loan can be a really critical driver of economic activity. Let's also talk about confidence. There are positive and negative spirals to confidence here. This is actually a puzzle of this specific cycle that we should spend a second on. Confidence amongst consumers has been relatively poor this cycle, but if you look at the real economic data, retail sales and actual activity have been quite strong. Consumers seem comfortable spending even in the face of a less than positive outlook. And then finally, the government, taxes and government spending. They can be huge determinants of economic health, but oftentimes they're less visible and a slower economic driver. Sometimes changes in tax policies or things like those pandemic era stimulus checks or election years can make government policy a bit more top of mind. That's a lot of stuff, Julia. So I just want to acknowledge that that's a lot. That was a lot of economics just in one little slide. And so it's a lot of different factors. And I want to point out that many times, in fact, most times, those factors might be moving in different directions. That's part of what makes our job really interesting and also investor's job as a whole really challenging. And just to add a layer of complication or maybe to just bring a little bit of humility into the business, there are a lot of different factors that influence investments too. So Julia described all these different links and ways that the economy impacts investments. There are other things, other layers impacting investments as well. And one of those is you. What are your goals? Someone who's just starting their career and trying to save for retirement, you might have 30, 40 years before you need to use the money that you're saving or investing. That's a long, long trudge towards retirement that I feel every day. But there are others who maybe are closer to retirement or who are saving up to go to college. We're going to have to spend that money a little bit more quickly. Then you might have less time to invest the money. You see how those trade-offs might change the types of things you might invest in? So there are all these different factors influencing investors. And I think it's important to acknowledge just how complicated the picture can be. But there are a couple of as close to tried and true investment themes that we've seen that are relevant for the marketplace. And so we'll focus on those today because we think they're the most actionable. The first is to stay invested, especially for those that are maybe saving for a longer time horizon. The second, and we'll get into each of these a little bit more, is to stay diversified, to acknowledge that putting all of your eggs in one basket is not typically the best plan. And then a third has to do more with a year like this one, where there's a lot of uncertainty. There's also an election I hear coming up in November. And so that investment theme is to keep calm and carry on. We've seen historically that not making a ton of changes, again, especially for investors that have a little more time before they need to pull their money from whatever they're investing in, that not making changes, sort of, staying the course can also help to reap some benefits, which is, again, something we'll shed a little bit of light on in the conversation today. Let's start with that first one then, staying invested. That sounds so straightforward. Don't go around changing your investments. Don't hide your cash in a mattress, whatever the saying might be. But it can be so difficult in periods of volatility and uncertainty. I mean, think about just the last couple of years we had. We're not talking just about some of those economic factors you described, Julia, like price growth, like what's happening in the job market, whether you have a job, can find a job. We've also been living through a global pandemic. That's not something that most people had a whole lot of experience with. But on this issue of staying invested, long-term data, from my perspective, speaks for itself. Sitting on the sidelines, hiding your cash in a mattress, it might be a good choice on any given day or any given hour, but in the very long term, it's rarely a winning proposition. In fact, just a fun fact for everyone, missing the best 10 days of the economic cycle after the financial crisis, that would have reduced equity returns by a half, 50%. That's missing just the 10 best days. And no one knows what those best 10 days are going to be. So it just helps to build the case that sticking around, staying consistent can make a big difference. Exactly. Another way to phrase this is that time in the market has historically trumped timing the market. And I want to visualize this, what Lauren just said, in a slightly different way here on the chart. What we're doing here is we're tracking three different investors, investors A, B, and C. And this is that period starting in and going after the global financial crisis, which started back in 2007. Let's talk about investor A. Investor A starts out with $10,000, and they stay invested. They stay invested through the crisis. They go through the muck, and they end up at the end of this period, which ends in 2023, with $44,782. That's from setting it and forgetting it. But let's go to two other investors who might have thought that they were a little bit more clever than investor A at the time. Investor B decided, hey, the economy is looking not that great. I think I'm going to exit the market. I'm not going to take this ride down. And I'm going to reinvest after one year. When the economy was at its worst, I'm out. And then when it's looking better, I'm back in. What did that do to investor B's returns? That $10,000 wound up as $29,152. So not quite half of what investor A had, but a significant reduction in total returns just from missing that year, the year when the economy felt at its worst and somehow missing that time for total returns over this historical period. Finally, investor C. Investor C said, hey, this economic cycle is just not for me. I'm going to cash. I'm going to the money market. This investor's $10,000 ended up, especially when you consider the impacts of inflation over this period, with $5,815. What does this chart tell me, for example? It tells me that investing, even when the economy feels uncertain or even bad, that is usually, historically, the winning strategy. Trying to time the market like Lauren had said, those 10 best days, that can be an incredibly difficult proposition, even for the professionals. Now, what you're describing, Julia, I think it's important to point out that it's easy to look back on history and say, this is what would have happened if you had made the perfect choice. It's so hard to do that in the moment. I mean, we're looking at a similar situation today and a year ago and two years ago, where everyone's been talking about uncertainty, volatility, recession. It's not easy to hold your nose and sit through it. But you could get a little bit into the why, like why this dynamic tends to work historically. And that has to do with the second investment theme that I mentioned earlier, which is diversification. Now, we're going to talk a little bit about an average investor in this part of the conversation. And I think we all know there's no such thing as an average person. But if we're looking at a moderate risk, moderate time horizon, average investor, just as an example to make the case, we like to think in the business, we use a baseline example called a 60-40 portfolio. What that means is a portfolio that's made up of 60% stocks, big group of stocks, and 40% bonds, big group of bonds. And over time, historically, we believe that this allocation has been close to optimal for the average investor. It gives you a little bit of the historical more volatility but more return potential of the equity market, with less volatility, less return potential, but a little bit more balance of the bond market. Now, a 60-40 portfolio, it's a base opportunity, not a constraint. So I mentioned that there's no such thing as an average investor. That's really what this is about. Investors can diversify within bonds, for example, that 40% of your portfolio, with asset classes that include, bear with me here, all kinds of things, investment grade bonds, riskier high yield bonds, or even municipal bonds, which are those issued by local governments for things like infrastructure and education. The same is true for the 60% of the portfolio, the equity side. You can look at different types of stocks or equities in terms of the size of the company they represent, the investment strategy or business strategy that they have, like growth equities, value equities. There are different sectors within the equity market. Again, we're giving a lot of different terms here, but the idea is just to paint a picture that there really is no one tried and true approach. But this mix of opportunities allows an investor to have access to different pros and cons of investments when you might not know exactly what's going to perform well on any given day. Exactly. And just to drive home that point that this mix is going to look a little bit different for every investor, our team likes to refer to the 60-40 portfolio as the Arnold Palmer of asset allocation. And by that, we mean that the lemonade and iced tea mix, stocks and bonds, is going to be a little bit different based on the preferences of every investor. I like a little bit more lemonade in my polymers, for example. Now, that Arnold Palmer mix of yours for a 60-40 is going to depend on several things. Number one, risk tolerance. Those with a lower tolerance for risk would likely have a greater allocation to bonds in this scenario. This will also depend on your age. For example, the older you get, and therefore your investment time horizon gets shorter, investors can consider less risky allocations, perhaps with a greater allocation to bonds as well. This will also depend on your goals. This is an opportunity to potentially work with a financial professional to establish your goals. Each of those goals can also have its own mix, its own asset allocation, its own Arnold Palmer. One of those goals, for example, could be a travel budget. Another goal could be a wedding. Another goal could be college. And another goal could be retirement. I love that you're pointing out the differences in different ideas of what a goal could be, because what I've found, not just from speaking with new investors, but also in my own life, even as an investment professional, sitting down with someone and really breaking down your goals, it can be so intimidating. How do you even start that conversation? But I think the key, at least in my experience, has been just to start, to ask the silly questions. Because I guarantee you they're not silly. These are things that all of us are thinking about. It's tax season, for example. How do I think about that? It's, you know, there's lots of uncertainty in the market. How do I think about that? You can get all kinds of different ideas just from asking. And so I think the biggest thing is to start, right? To start somewhere. And I think that's what we all do. I mentioned that it's tax season, so I think it might be a good time to bring up that third investment theme we were thinking of. So if the first was to stay invested, the second was to look at a broad range of potential investment opportunities. The third, keep calm and carry on. It is an election year. With about eight months to election day, our fundamental election year principles are to stay above the noise, mind policy gaps, and remain engaged with your long-term goals. So there's a little bit of consistency here with what you've already heard today and a little bit of new stuff, so let's break it down. First of all, stay above the noise. Historically, we found that consumer, business, and market outcomes typically don't depend on the party in power. And I'm gonna repeat that for those in the back. We looked at different types of presidents, different types of Congress, mixed, really dominant, Republican, Democrat, and we found that really, really, really the outcomes for households, businesses, and the market don't tend to depend on the party in power. A second really helpful, we think, investment principle for election years is mind the gaps, because in the short term, there are differences in tax or spending priorities between different types of governments, and that can create tactical investment opportunities. Typically, we see that in this phase of an election year, before any real policy proposals have been put forward, that's maybe not the time that we start to see those gaps emerge, but as we get closer to the election and maybe policy proposals become clearer or more defined, then we might start to see differences in the investment strategies that reflect those preferences or differences in tax and spending priorities. And then finally, align your allocation. For most investors, as we've talked a lot about already today, sticking with a diversified allocation meant to withstand the ebbs and flows of the economic cycle, sources of volatility, that can sound like a boring or straightforward thing to do, but I do think, and we have seen historically, that staying calm, keep calm and carry on, can be a powerful investment strategy during a volatile time. Let's look at how that final principle you mentioned, Lauren, about aligning your allocation, staying simple, staying diversified can materialize historically. Now, if you look at the chart on your screen, through elections, wars, cross-border crises, the rise and fall of great companies, the highs and lows of many economic cycles, what you see here is the S&P 500 Index, which has delivered annualized returns of over 10% since its 1957 inception. Now, we understand the urge to reallocate toward less risky strategies when all of this uncertainty is coming to the fore, and when political noise is at its peak especially, but doing so runs contrary to the historically strong election year performance of US equities. The good news here is that there are people who can help. This is a prime time in our view for investors to check in on their allocation and make sure your risk tolerance, your time horizon reflects your expectations for maybe a little bit of extra uncertainty in 2024. Julia, I wanna just point out or reiterate something that you've raised right there, which is that there are folks who can help. We've brought up some foundational concepts for the economy, for markets, for election years, but even that, I'm in the business and my head is spinning a little bit, and so I think maybe the main takeaway from all this information is that there are resources that you can use to keep yourself informed. Not every investor needs to be a professional or needs to be on top of every market move. In fact, in many cases, it's best to just let it ride as we've been discussing today. Now, what can you do about it? We talked about putting one foot in front of the other in a election year or a particularly volatile time or even just in March every year. It can be a good time to check in with a financial professional and talk about what are your goals? What time horizon do you have to meet those goals? How much time do you have? Based on that, how much risk could or should you be taking? And putting all those pieces together, what's a baseline allocation that could get you started towards reaching those goals? Now, today we wanna highlight a few resources because even if you prefer to leave the investing to the professionals, we can all benefit by increasing our awareness, our knowledge, our interest in market-based themes and frankly, the economy. So we wanna point you in some of our favorite directions. Now, on our own team, we are very proud to have many public resources that can help keep investors educated and informed. Lauren and I host a weekly podcast for New York Life Investments called Market Matters. And we cover our investment views and global macro themes on a weekly basis. We also have a plethora of written research available at the link in the QR code on your screen. But that's not all. There are of course tons of amazing people in this business that we think have great ideas and that we regularly use as a resource to prime our thinking, help us think outside of the box, really just get educated on what's going on. One of our favorites is a podcast called Odd Lots from Bloomberg. It's an interview-based podcast. I think there's just really excellent and holistic, wide-spanning ideas that come up on that podcast. My personal every morning podcast is Marketplace from American Public Media. That's an easy 30-minute talking about the major drivers in the economy and markets in a way that I think is so understandable and accessible. We also love when it comes to trying to think outside the box, a Bloomberg column or newsletter from an author called John authors, ironically. And then for those of you who love videos, there's an independent newsletter video-based from a thinker called Kyla Scanlon who's a little closer to our age who just has great ideas and is really fun. So any of these resources, any that you find and connect to are a great way to stay engaged and to remain and build education on these topics. With that, we wanna thank all of you so much for joining us today. We're really proud to celebrate Women's History Month with you and we're really proud that hopefully this can be just one way that you can realize that all women can and should be investors. Absolutely, thanks so much for joining me. Julia, thank you for coming and we hope to see you soon. That concludes our webinar. All of us at New York Life Investments wish you all a happy Women's History Month.