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Natixis Global Asset Management CEO John Hailer on how investors can prepare for risk while growing their portfolio.
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Skip -- macro picture -- Tyler says that investors cannot and should not avoid risk.
But he's got a plan for you to prepare for it into embrace it.
750.
Billion dollars in assets under management John -- is the CEO and president of Natixis global asset management good to see John thanks for joining us from Boston.
Great -- the CTO (%expletive) it interesting because -- longer term investors yet you say.
Look at risk it's almost more important than looking for growth and yield tell me what you mean by that.
Look when I first started in the industry and 22 years ago.
I grew up in in an industry in Boston that talked about.
Protecting the principal never touching the principal and over the last 25 years it's seen the definition was -- -- wanna -- upside.
And people forgot about risk and they forgot about understanding volatility.
And it we've now today back to making that the foundation of anybody's portfolio understanding the risk that you portfolio.
-- and then understanding what type of volatility you can live with.
And then building a portfolio we exact criteria as you number one goal.
And one of the things we've seen is people rushing in to what they've seen with that old style of investing and that is let me look at a safe haven.
Third I don't know what -- treasuries gold so that I hold on to that principle.
Is this haven concept at -- Well I think very near zero money in the backyard -- in this -- have -- -- a tough way to go but it seems that for some of the people headed.
Recently -- look at the 6040 split.
The old traditional diversification asset allocation that's gone it's gone the way of the dinosaur and it's going to be that way for good.
And then there's nothing wrong with that it just means people have to understand how the markets changed.
And basically when you look at the S&P 500 and we use that as an example the first quarter was almost a record breaking first quarter guests and -- Then it gave it all back in the second quarter.
And guess what we got it all back in June skull.
The volatility in the equity markets are there.
Yet you still need to invest and we think if you're looking at Russia getting through these different volatility.
Cycles.
You have an opportunity still make money in traditional investments such as equities bonds and cash but however -- lot of headwinds against them.
Can you give us a couple of ideas on how to construct a durable portfolio that can get a portfolio through these very volatile and difficult times.
Yeah on the firm believer in traditional asset classes even now but the volatility -- the brought into the equity markets has a lot of institutional and individual investors spoke.
So you need to still look at long term only.
And some people have asked me what -- sectors you look at banks will and financials around the world.
Evolving beaten up in fact non bank financials have been really tossed out with the bath war water.
So there is some good asset classes here -- some good equities -- it just means you have to look at the longer term to get through those cycles.
Bonds bonds -- -- you know.
On opportunity we don't believe in government balance sheets right now so we're recommending in what I'm talking to people about you still need yield he still -- com.
He still need to look at.
Investing in bonds.
The difficulty is rates throughout the historical lows so you need to hedge and build a portfolio that helps you hedge against interest rate sensitivity.
Finally on cash cash is a great defense if investment but when you tie in yield -- inflation's -- negative rate of return right now.
That's were alternatives come in hedged equity strategies looked at hedge fixed income out first -- restraining.
Yup you got -- and you have to look at those -- you look at Gateway investments which does.
A covered call strategy you look at -- simplex data replication.
You look at things at Loomis Sayles is doing not only on fixed income but in their interest rate hedging.
These -- the types of but areas that people need to look at it adding into traditional asset classes.
John Tyler CEO and president of Natixis global asset management 750 billion you're doing something right good to see John -- that's -- -- good to see.
