On this episode of THE FINANCIAL COMMUTE, host Chris Galeski invites Managing Director of Investments Sasan Faiz to discuss current trends and investment opportunities. 

Sasan believes there are many growth opportunities in credit and there may be higher return in credit than equities. Even though the stock market is up nine percent, only a handful of companies are driving the market upwards like Microsoft, Apple, NVIDIA, etc. If inflation and deglobalization continue and prices increase, companies’ profits will shrink unless they pass costs down onto their consumers. Eventually, Americans will not be able to buy as many goods and services as before, thereby negatively impacting the stock market. 

Sasan also says we are becoming more involved in private credit right now because of the regional bank crisis. Since banks have been pulling back, there are more opportunities for investors in private lending. 

Another current macrotrend is decarbonization (the shift to renewable energy) which may bring more investment opportunities in natural resources. Sasan recommends listeners to consider researching companies in the mining, extraction, and processing of natural resources. Another trend that is happening is with capital expenditure cycles- in the past, when commodity cycles boomed, companies would generally invest to take advantage of higher prices. This cycle has been different, though. Companies are fiscally prudent right now and are returning capital to shareholders.

Disclosure:

Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.