Balancing $5.7T in Active and Passive Management with Lori Heinel

26:30But ultimately, it really is a committee that gets together and makes those macro calls. And then within our individual active capabilities, we've got fundamental and quantitative equity and fixed income. Those portfolio managers are basically charged with doing the hard work to figure out how they are going to generate alpha. and we've been quite successful. About 65 % of our strategies are outperforming on a trailing one, three-year basis. Really interesting. You mentioned a variety of different colleagues and portfolio managers and economists and strategists, but really it's just the tip of the iceberg.

27:08You lead a team of over 600 investment professionals, and they're located around the world, how do you keep an investment organization that large and that dispersed all on the same page, all coherent, all moving together? Well, I have a lot of help. So I think any manager will appreciate that the most important job you do once you're in a leadership position like mine is you hire well, right? And you let your good people do their work and you pressure test their theses and you make sure, as you said, that everybody's singing for the same hymn book where they need to be or that they're doing their own thing when that's appropriate.

27:49And you provide a sort of guidance and oversight opportunities to collaborate, all those good things. Our business, in one sense, is a simple business. We're here to serve our clients. We have all the tools at our disposal to serve our clients. We gather together routinely to develop thematics and market outlooks and other kinds of collateral that both myself and And the other senior executives can take to our clients as ways to engage with them and demonstrate our facility with markets and our capabilities and insights. And then, you know, basically I let the team do what it does best, which is deliver the results.

28:24So walk us through a day in the life of a global CIO with$5.7 trillion. I would imagine that day-to-day events are just so overwhelming. No two days really look exactly alike. No, it's a bit of a crazy day. It's one of the things I love about the job, but I would say the first thing is I spend a lot of time with clients. So in the first quarter of 2026, I was on 45 planes traveling around the globe, Middle East, luckily before the war started, Asia, Europe multiple times, across the U.S. as well. So I spend a lot of time talking to clients of all types. So we have, as I mentioned earlier, a large institutional base of business, some of the largest central banks, sovereign wealth funds across the globe.

29:15But we also have a lot of private clients. We have private banks that we work with, large broker-dealers that we work with. Sometimes I'll even meet directly with end clients, depending upon the form. So I would say that's probably a good chunk of my time. I do a lot of time, or spend a lot of time, rather, on things like strategy. So we have an executive management team which gets together and talks about from a business standpoint, where do we want to emphasize? What does that require all of us to do? So for investments, one of our big efforts over the last couple of years has been innovation.

29:51Since Yi Xin-Hung joined us as CEO in 2022, we've been very aggressive in terms of launching new products and new spaces, including partnerships with firms like Bridgewater and Apollo. So a lot of the strategy for what do we want to do to be relevant to our clients globally, ultimately it comes from the investment team's ability to execute against those mandates. And so we spend a lot of time talking about what kind of resources do we need? What kind of research can we do that addresses the client problem we're trying to solve? How do we partner effectively with these third parties where they might contribute some content?

30:30And we ultimately own the portfolio construction and we might have our own research that we want to bring into the mix. And so one plus one equals three. But ultimately, we're accountable to that for our clients. And then talent. I mentioned earlier that, you know, you need to have really good people. So we just came off of our annual talent reviews where I get all my CIOs in a room. We work with our HR business partner. We go through our top talent, succession planning. What kind of vectors do we see coming on the horizon? AI right now is a huge theme. So how are we readying our teams to be good stewards and users of AI and adopt that in ways that we can, you know, make better efficiencies and better judgments?

31:15And then the last part of it is there's a lot of reading, listening, consuming information. Again, I am expected to be the face of State Street Investment Management from a client standpoint. So I didn't know what's going on in the world. And as you know, the world's been a really crazy place this year. It certainly has. You mentioned Apollo and Bridgewater. The criticism about privates and things like 401ks or target date products is they're expensive. All right, so you don't have the liquidity issue. but they're complex. What's the case for putting private assets into a 401k? I think there are a couple of things.

31:58First and foremost, if you look at the equity side of the ledger, more and more capital creation is happening in private markets. Meaning pre-IPO before companies are public. Back in my early part of my career, and I'm sure yours as well, if a company came public at$100 million, that was a big number, let alone like a billion. Or a trillion. Well, now, yeah. So fast forward, you know, and now we're talking literally in hundreds of billions or even trillion dollars. So if you think about just that magnitude of opportunity that's lost if you can't participate in those markets, it's just incredible.

32:35So that's number one. If you look on the fixed income side, I think we've launched PRIVE, which is a collaboration with Apollo. And there, again, this is investment-grade credit that just happens to be issued in private markets instead of public markets for all manner of reasons. It could be that the company wanted to move quickly or they didn't want to go through the filing process or there might be some specific assets that they want to collateralize with the loan. And so those are really high quality investment grade assets, but they collect a premium for an investor because they're done through the private markets instead of the public markets.

33:14So to us, those are just natural extensions of what clients should have access to. Makes a lot of sense. And we mentioned earlier GLD. What an incredible run gold had in the 2010s, pretty much right up through last year. It's since off on about 20, 23 percent, something like that. But when you're thinking about equity and fixed income and alternatives and you see a metal which has been widely traded for thousands of years, can I say 10 ,000 years, that some people have been called barbaric. How do you contextualize how GLD trades and what is driving the psychology of those investors versus all these other asset classes?

34:04Yeah, so again, I want to take us back a little while because we were advocating for a position in gold in client portfolios for six, seven years. So long before we had this run up to 5 ,000 and plus. And the basis at the time, obviously, interest rates were very low. So you didn't have an opportunity cost. Today, that's different. But what we were seeing was that fixed income wasn't likely to play the role it historically played diversifying portfolios. You had no income. You likely didn't have a lot of diversification benefit from fixed income because how much lower could rates go, you know, if the market crashed?

34:45And we weren't even sure it was going to provide capital preservation. And we were right. Like if you fast forward a couple of years, that turned out to be a bit of a challenge as well. And so we were looking for other ways or other exposures to put into the portfolio that would provide some of that cocktail of diversification benefit that fixed income just wasn't likely to provide. And so we settled on gold for lots of reasons. And oh, by the way, we were also writing a lot at that point in time about concerns with fiscal profligacy and the fact that the U.S. debt burden was getting large. And this is several years ago now.

35:22It's obviously a much bigger nail. And gold to us was kind of an interesting asset that would benefit from any kind of debasement concerns or any of these other sort of issues. So we advocated clients to add it many years ago. Of course, very few of those clients did so until it went up to 3 ,000. And then suddenly you started to see more interest. And then 4 ,000, you start to see a bit more interest. But I would say gold still plays an important role in a portfolio. It doesn't have to be a huge exposure. It protects against a number of different tail risks in a portfolio. Yes, it's expensive from a carry cost standpoint right now, given the give up and fixed income.

36:05But we still have in our strategic allocation portfolios, you know, a couple percent allocated to gold because we do think that it provides very distinctive benefits in certain kinds of crises. So today we have Bitcoin cut in half from the high. And a lot of the narrative around crypto sounds like sort of a digital refresh of the historic narratives around gold. How do you think about crypto? Some of your competitors have aggressively pushed into it. Others have very much steered clear. It might be a little early to declare which side is winning, although anything that gets cut in half kind of comes with a little bit of a black mark on it.

36:49How do you think about crypto these days? Yeah, so I want to just first share a story. So back in 2012, so this is many years ago now, my daughter and her boyfriend started mining Bitcoin. And, of course, being in this industry, I thought they were crazy. What, was it$100 back then? It was under$1 ,000. I think it might have been$500 or$600. So it wasn't quite as low, but it was still very, very low. And I thought, you can't just manufacture. Money doesn't grow on trees. You can't just manufacture it on a computer. But at the time... Turns out you can. It turns out you can. So I was very skeptical, but I kicked myself for not having at least bought a couple, because at the time, I could have put$10 ,000 into it, and I'd be...

37:32Right,$10 million. We might not even be having this conversation today. Who knows? We would. It would just be on your yacht off of St. Bart's. Well, there you go, which wouldn't be half bad, right? It wouldn't be half bad. So in any event, I've never really understood the case. Now, what I will acknowledge is that over the years, I did learn of a couple use cases that made sense to me. So I can remember seeing a woman from Pakistan present, and she was talking about why Bitcoin is so popular in Pakistan. It was because at least they had a stable currency because it was pegged to the dollar effectively.

38:07And so people preferred being paid in Bitcoin instead of getting paid in Pakistani. So I thought, OK, well, that's interesting. But that's a tiny little use case. But I never really understood because you don't have anybody who's got the taxing authority or the backing of it. Whereas even with gold, you've sort of got the central bankers as a collective in some sense back gold. Sure. There's still massive buyers of gold. In fact, that's surpassed treasury holdings. So I never really got it. But, you know, you fast forward and suddenly you've got an asset that's up to$30 ,000,$40 ,000, you know, over$100 ,000 at one point in time.

38:46And you're like, am I wrong? Like, what am I missing? So I don't know. The jury's out. We do believe in the sort of the digital ecosystem very much. where we're trying to work on tokenization and we're working on all kinds of other sort of digital finance types of endeavors. So there's something about the digital that is very compelling. And in a weird way, it may be that once that digital infrastructure gets more evolved, it'll make Bitcoin even less important, right? Because now suddenly you'll get all the benefits of Bitcoin in terms of the tradability and all those kinds of things without having to have the exposure to an asset that I don't know how to price that asset.

39:26Wildly volatile, to say the very least. Really interesting. Coming up, we continue our conversation with Laurie Heinel, Global CIO at State Street, talking about the current market environment. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Laurie Heinel. She is executive vice president and global chief investment officer at State Street Investment Management, the asset management arm of State Street with$5.7 trillion, with a T, trillion in assets.

40:05And that's as of year-end 2025, and we're up 10%, 12 % since then in the market. So do the math. I'm going to say over$6 trillion. Let's talk a little bit about the current market environment. Your global market outlook was titled Forward with Focus. That sounds like you were constructive on risk assets. I always put a question mark where I see, but you must stay agile. Explain what that means. Well, so to your point, we did see 2026 as being still a pretty good year for investors. We thought that earnings were going to continue to do well. We thought that inflation, while not quite back to the 2 % target that the Fed had set, was marching in that direction and would possibly give some more room for rate cuts in 2026.

40:58And so when we talk about being agile, it was focus on equities over fixed income, but do so in a bit more broad-based way. Like, don't just put all your eggs into the large-cap U.S. trade. Look at small caps. Maybe even look at things like emerging markets, places where you might get a bit of broadening out of the market as we saw, you know, maturation in 2026. Of course, the altercation war with Iran turned that a bit on its head. And so for a short moment, we were revisiting whether that was going to be true. Obviously, inflation became a bigger sticking point once again or a bigger concern once again, concerns about whether you're going to get that broadening out or whether investors would just sort of go back to the trades that they knew and loved and had, you know, more security.

41:46And but I think as we get into the middle of the year, we're seeing that our views were largely rewarded, that sort of moving to small cap and other parts of the market certainly have done quite well on a year to date basis. and we obviously are still worried about fixed income and rates and what that might mean as inflation remains a bit more tricky. But the prints that we're having every month are all over the place. Just as we're speaking, we're having a good CPI print, right? So while we think that the Fed is likely on hold for the balance of the year, we don't see rate hikes in the offing.

42:20Kind of interesting. We'll talk a little bit about CPI and PPI in a bit. But you mentioned something that I want to explore because it's so interesting. So the Magnificent 7 in 2025, only two of the seven outperformed the S &P 500. I think it was NVIDIA and Google. And this year, if you're looking at small cap or mid cap, you're looking at growth or value, you're looking at Europe, you're looking at developed XUS, you're looking at EM. everything seems to be outperforming large cap U.S. growth. Is this just the reason to have a diversified portfolio or is it indicating, is this a cyclical shift or is this suggesting something else?

43:06Yeah, well, our view is generally to have a diversified portfolio. At the margin, we might favor large cap or favor Europe or favor emerging markets at different points in time based on relative value trading. But we do think that it's incredibly difficult to time those inflection points perfectly. And as you noted, coming into this year, you still had a lot of momentum and flows into the things that had done well in the past, including some of those large cap names that you mentioned. So, you know, I'm kind of a traditionalist in that way. I do believe you want to be diversified and have exposures to multiple places.

43:41But I do think that this AI enthusiasm, I believe in it in terms of a technology. But when you look at the massive amount of spending that is now being undertaken by some of these companies, they've gone from leveraging balance sheet cash to make those investments to now accessing fixed income markets in a massive way, and even in some cases issuing equities. So you do have to sort of wonder whether that vein alone is going to be where the money is going to be made going forward. I'm not saying that they can't still generate good earnings, but there are plenty of other places. If you think about energy, if you think about utilities, you think about all the ecosystem required to enable that AI transformation.

44:29And then perhaps most importantly, you know, the real economy and how sectors like finance or health care or other things are going to benefit from these technologies. I think we're just at the tip of the iceberg in terms of what that will mean for innovation or productivity. So when you're looking at this enormous capital spend that you referenced, and we didn't even bring up all the private credit that's been pouring hundreds of billions of dollars into that, how do you judge when the spending is productive and producing sufficient returns? Given the firehose of capital, there has to be some misallocation and there are going to be some winners and losers.

45:09But when does the next incremental dollar become bad money after good? How can we tell? We're watching for when does that CapEx not translate into incremental earnings. So let's stay with the idea of artificial intelligence. You work at a very large asset manager. I would imagine the biggest shops have a little bit of a lasting advantage in deploying AI, not only looking at their own language models that they've created internally, just the ability to deploy that capital in a way that makes them more, to deploy that technology in a way that makes their capital more efficient, more productive. How are you looking at AI from the perspective of the finance sector?

46:00This is a whole podcast in its own right. But let me just, I guess, share a couple of thoughts. First and foremost, we've been on the AI journey for over a decade. We've been using machine learning and natural language processing and other types of technology in our active strategies for over a decade. And I think it's important to also know as a GCIFI, we're a highly regulated institution. So we've also spent many, many years on the infrastructure, governance, other things to deploy these types of tools, being mindful of cybersecurity threats, privacy, all the other things that you would expect a large bank to be worried about.

46:45So where we are now, I would say the biggest places that we're seeing AI support our business are in more things that are operational in nature, that are repeatable processes, where we can deploy some technology and free up people to do other more interesting things. If you think about some of the marketing elements, things like RFPs or commentary writing or other kinds of client servicing elements, they lend themselves beautifully to leveraging this technology because you have a database of information, the question might get asked in a slightly different way, and the AI can actually feed back the most relevant answers.

47:24And then you have a human in the loop always in our environment today that ultimately owns the final product. But those are, I think, the sort of early wins for us is that kind of efficiency gain, leveraging people to do more higher order things. Down the road, will this get more integrated into our investment process and philosophy. We're experimenting with a lot of things. We've got the concept of a research co-pilot, which lets a portfolio manager, you know, survey hundreds, dozens, whatever, you know, research reports and do so very efficiently using an AI type of a tool. They still have to, you know, pressure test whether the results are getting back make sense, and they still ultimately make the decision about what they're going to do with that information from a portfolio standpoint, but we see lots of opportunities for that kind of augmentation of the human as well.

48:14Let's talk a little bit about inflation. We've had a series of things that have contributed to it. Tariffs, war in the Middle East, etc. Here we got the best CPI print we've had in five years, but that's primarily been because we briefly thought the war was over and oil prices plummeted. Now the war is back on and I track things like the producer price index is six and a half percent. We know that's just going to push into final prices over the next few quarters. So how do you think about inflation and fixed income and specifically and has macroeconomic forecasting in this environment just become, I don't want to say impossible, but so challenging.

49:04Well, macroeconomic forecasting is always difficult. And I would say what we've also seen over the last several years is data revisions coming in at a massive level, too. So what you see in a print one day, whether it's the payroll data or the GDP or whatever, a quarter later might be changed pretty dramatically. So you have to be a bit humble in this kind of environment when you're making any kind of bold calls. But I would say our core view is that inflation will still trend lower over time. We think it might not get back to the 2 % level, but we aren't necessarily thinking that 6 % is something that's sustainable.

49:41The good and the bad news here is that when you have inflation shock coming from things like commodity prices, they rebase. So you get that one-time shock, and then you're done unless there's another shock on top of that. So at some point, that sort of recalibrates in its own right. I think the thing that we've been most surprised by this year is the underlying resilience of the U.S. economy in particular. We were thinking that labor markets were going to be under a lot more pressure than they ultimately have been, at least so far. We thought that the inflation coming from the war would filter into other places like fertilizer and food and other things, which may still happen.

50:22We haven't gotten through the farming cycle here in the U.S. But we're not seeing the consumer, while they're stretched, we're not seeing the consumer necessarily pull back the way that we thought that they might. So, you know, the second half will be a very interesting second half. Yeah, to say the least. Let's stay with the consumer. There's a couple of things that I've noticed that's kind of interesting. If we look at the second quarter sector breakdown, consumer discretionary, worst performer of the group, essentially flat. If you look at consumer spending, there's a greater reliance on short-term credit and credit cards than just salary increases.

51:02And then consumer sentiment, and I think we can all agree the University of Michigan sentiment measure has become broken over the past few years. But still, whether you call it the vibes, the sentiment, whatever, seems to be shockingly negative. um i don't disagree with you about the resilience of the economy but how do we figure out what's going on with the consumer and their importance to the ongoing resilient economy well i think the first thing is that i agree with everything you're saying but there are also offsets so people are getting tax refunds you've got you know other benefits coming through from the one big beautiful bill so you do have some other things that are still propping up the consumer at the margin and And employment still is pretty strong here in the U.S.

51:524.2 % unemployment is pretty good. So you still have pretty good sort of underpinnings, if you will. But it's clear that the average consumer is feeling like they're losing ground, right? There have been lots of articles about even couples that are making over$100 ,000 feeling like they have food insecurity. Well, that's a problem for sure, and it probably means they're going to pull back somewhere else. But my point is that in the aggregate, whether it's from CapEx and other corporate spending, the sort of K-shaped consumer economy where the upper echelon, if you will, is being benefited by housing prices, which while they're plateauing have come up a lot, but asset prices are going up a lot still.

52:30There's still a lot of resiliency there. So I'm glad you brought both of those up. The pushback I get from bearish colleagues are, A, yeah, the economy looks good, but it's almost all driven by the upper quarter, and I think that's being generous, on the quartile side. But the other criticism is, hey, all of this AI-related CapEx is masking underlying weakness, although I don't see that weakness in much of the data. What's your response to those sort of criticisms? Look, I think that the good and the bad news is that you don't need 100 percent of the consumers to participate to have the consumer economy doing just fine.

53:11So that's a sad thing in a lot of ways, but it's just the reality. And by the way, companies are generating productivity from things like the deployment of AI already. And we think that that's very constructive. And then speaking of productivity, we really haven't talked about, you know, everybody talks about the Magnificent Seven. What about the other 493 companies in SPY that are becoming more efficient, more productive, more profitable? How do we contextualize that? Well, we think we're in the very, very early innings. So I mentioned earlier, we've got active teams, right? And this is their domain, right?

53:49So these are people who are in the tech sector, in the healthcare sector, in the finance sector, doing the hard work to understand who the winners and losers are going to be. And the mantra over and over again, is that the companies that adopt technology for efficiency gain, for innovation, to create competitive moats are going to have a really good runway from that deployment. So we are quite optimistic in terms of what that means for long-term prospects. So before I get to my favorite questions, there were a couple of items I had to talk to you, ask you about that are a little more off the beaten path.

54:25You were chosen to lead State Street's Fearless Girl campaign. Explain what that is and why you were chosen to take that role. Yeah. So this is true serendipity, right? So as with anything, these things take a village, right? And so we had this placement of what is now the iconic statue of the fearless girl, initially down on Bowling Green, facing off against the bull. And I had been one of several people who had been involved in that effort and got a call the night before the statue was going to be placed. And somebody said, can you go to New York like now and be there when we place the statue just in case there's attention, just in case some of the networks pick it up?

55:12And just to just to flesh that out a little bit, everybody knows the Wall Street charging bull is actually not on Wall Street. It's on lower Broadway. It's a massive 25 ton statue. the fearless girl is proportional real life a 10 year old little girl sort of just standing up to the bull her little you know right hands on her hips almost like a big sculpture exactly standing staring down the bull so so tell us what happened when you were called to new york so i fly down i you know show up the next morning bright and early and you know there's a little bit of milling around. It happened to be a rainy day, so there weren't too many people out and about.

55:56But suddenly, it started to get a little bit of interest. And so, we had a couple of reporters come by and say what's happening. We explained to them that this was a moment where we were trying to advocate for everybody's future and used it as an opportunity, given it was International Women's Day specifically, that that was the timing of the placement. And so, So one thing led to another. And before you know it, I'm booked on three or four or five news programs over the next 48 hours and telling the story about how the fearless girl came about and why we did it and how important it was to stand up for those who perhaps couldn't stand up for themselves.

56:33So very successful campaign. And where is the fearless girl today? Well, she is now opposite the New York Stock Exchange. So one of the things that happened is that she started to attract so much attention that they were worried about the safety risk. Because as you know, where the bull is, it's a very narrow street there and people were milling onto the street. So we got a permanent or semi-permanent, at least for now, placement in front of the New York Stock Exchange. And that's where she's been since. That makes a lot of sense. That's a good location for that. So I know you serve on a couple of boards.

57:06The one that really jumped out at me, the Boston Ballet. Tell us a little bit about what that's like. Yeah, so I've always been a great fan of the arts. I was a gymnast as a child. I wasn't a ballerina, but I think there's a lot of rhyming there. And I've always been a fan of ballet as an art form. And the Boston Ballet is very interesting because they are trying to consolidate both the legacy classical repertoire with a lot of more modern, contemporary, avant-garde kinds of repertoire. And so they did a collaboration with the Rolling Stones, for example, where we did a ballet set to some of the Rolling Stones music.

57:43And so it's just been a great way to meet people in the cultural community in Boston, but also be part of art making that, you know, I find just fascinating. Really, really interesting. So I only have you for a few more minutes. Let me jump to my favorite questions, starting with who were your early mentors? Tell us about who helped shape your career. Yeah, so I would say I didn't really think about mentors when I was younger. I would say my bosses were my mentors in the sense that they stretched me, they gave me opportunities. I talked earlier about that situation at First Boston where we were in front of the airport authority.

58:20And, you know, I would not have had the opportunity to be in a room like that in a lot of companies. But I think my boss felt that I'd done the work and I deserved a place at the table. So throughout particularly my early career, I would say it was my bosses who stretched me, gave me opportunities. And then I would say about mid-career, with another colleague, I created this group called Connected Women. It was a very informal type of a thing where a number of women, sort of similar vintages, got together regularly. Vintages? Vintages. If I ever use that. We drank a lot of wine, so I can use the word vintages.

58:53so it was really a wine drinking club but there was a benefit that we got to know each other well our professional and our personal stories and so we could help each other out so when we were you know looking at career situations it was a a good circle of friends that I could turn to who were in similar states in their careers and trying to make it on the corporate ladder that I could lean on. Really interesting. Let's talk about books. What are some of your favorites? What are you reading currently? Yeah, so, you know, I tend to like biographies. I've read a bunch of the, you know, Chernow, the Titan, and House of Morgan, and the Walter Isaacs, and, you know, Stephen Jobs.

59:35And I like biographies because they meld history with leadership, with whatever the, you know, topic is. So obviously with the, you know, the Titan and House of Morgan, it's a finance centric kind of a story. And with jobs, it was a technology centric. But seeing how those leaders navigated, you know, innovation, their time, the people around them, I just find that fascinating. Much better than reality TV, in my opinion. Well, to say the least. It is reality TV. Speaking about TV, are you streaming any Netflix or Amazon Prime type shows? Yeah, yeah. So right now I am on a bit of a hiatus. I've been trying to read some fiction.

1:00:18So I'm doing some Toni Morrison right now. I went to Princeton, as you probably remember. And so I've been trying to do a bit more reading in my spare time. Our final two questions. What sort of advice would you give to a recent college grad interested in a career in either investing or asset management? Well, the first thing I would say is it's a fantastic career. you can do so many different things. You get access to technical acumen. You have the interpersonal piece of things. You have to solve problems. I love the problem-solving aspect of it. And I think it's something where no matter what your preferences are, you can find your vein, right?

1:00:56You know, I happen to make my way to Global Chief Investment Officer, but there are people in marketing or people in distribution or people in processing. And all of those are just absolutely fascinating careers. It's never a dull moment. And our final question, what do you know about the world of investing and asset management today might have been useful back in the 90s when you were first getting started. Yeah, well, I wish I had started investing earlier and more often. I was a net creditor for many, many, many years because I wanted to have nice clothes and jewelry. I can't tell you how often I hear that, which is really just a backdoor admission of the power of compounding.

1:01:35And maybe that Bitcoin, that was my other thing I probably should have done in 2012. If you had a crystal ball. But what's the big insight that would have been useful to know generally about markets? You know, I'm not joking about the early and often. And truth be told, I'm 100 % equity invested even now. I'm a big fan of that as well. So back in my day, you know, it was the 100 minus your age, which would put me squarely not in the 100 % equity category if I followed that rubric. But I think a lot of people would just be served by being in equities, you know, over the long term, unless you only have a couple of years.

1:02:12And who knows? That's where the money is. This is a little hindsight bias, but I am always shocked. It's literally a chapter in the book of people who are 20, 30, 40 years old that have a substantial fixed income. I understand it's ballast that offsets the volatility of equity. but really until you're over 50 maybe even over 60 do you and getting closer and closer retirement do you really need to have 40 of your portfolio and bonds it doesn't make a whole lot of sense well look i mean for a lot of institutional clients it makes perfect sense they're liability matching right and they need that fixed income and i think if you need liquidity or you're you know going to have your children's college education or weddings or things like that in a couple years, absolutely fixed income plays a role.

1:02:58But if you have the ability to not touch that investment capital, I think equities is the way to go. Thank you, Lori, for being so generous with your time. If you enjoy this conversation, well, check out any of the 649 podcasts we've done over the past 14 years. You can find those at Apple Podcasts, Spotify, Bloomberg, YouTube, wherever you get your favorite podcasts. I would be remiss if I didn't thank our crack team that helps put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.