An Economic Update with Julia Hermann, CFA, Ep #68

I'm excited to introduce Julia Hermann, a Global Market Strategist at New York Life Investments. As a director on the Global Market Strategy team, she provides economic research, asset allocation insights, and thought leadership to guide investment decisions. Julia is also the co-host of the weekly "Market Matters" podcast.

Previously, she was a Global Market Strategist for an emerging markets equity fund. A CFA charterholder, Julia graduated summa cum laude from the University of Notre Dame and holds a Master's in International Economics from Johns Hopkins SAIS. Today, she’ll discuss her research on global market narratives and their future impact.

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LISTEN IF YOU ARE INTERESTED IN…

(00:00) Welcome to Upthinking Finance
(01:30) How Julia discovers what information is important to investors
(07:00) How should people develop a reliable market view?
(08:30) What narratives Julia believes have a significance into market decision making
(10:10) Julia’s research strategies about USA Federal debt
(16:10) AI’s influence on the market
(25:00) Impacts of tariffs on businesses and the market
(31:40) Global markets exploring alternatives to the US dollar

How do People Choose Investors who Align with Their Market View

Julia emphasizes that trust is essential in investing. What you trust—whether it’s your own analysis, a strategist’s track record, or their approach to the markets—directly influences your investment decisions. She notes that trust is built by assessing the accuracy of a strategist’s past predictions or by aligning with perspectives that match your long-term values and investment goals.

For example, an investor focused on incorporating cryptocurrencies will have a different outlook on time horizons, risk, and correlation than a deep-value equity investor. Ultimately, Julia believes that markets are founded on trust, and that trust can be shaped by different factors for different people.

Global Narratives that Shape Marketing Portfolios

Julia highlights several key narratives that drive investment decisions. She points to a recent shift in market sentiment and momentum, which could influence short-term allocation strategies. However, she stresses that her team at New York Life Investments takes a longer-term view.

One of the key themes she’s focused on is the future of artificial intelligence investing. She’s also researching debt sustainability and its connections to the future of the U.S. dollar, geopolitical developments, and interest rates—factors she sees as crucial for shaping investment strategies.

AI’s Influence on the Market Shows Investors Should Monitor Past Trends and Anticipate Future Impacts

Julia discusses the long-term impact of AI on markets, highlighting the role of the "Magnificent 7" companies driving AI infrastructure. She explains that AI is still in its early stages, with data centers and infrastructure expected to have massive energy demands—potentially requiring as much energy as a country like Japan by 2030. Julia views AI as a significant investment opportunity in energy, utilities, and real estate, though its full market impact is still unfolding.

She also addresses the evolving investment landscape, noting that the rise of AI and the increasing availability of information have shifted investors' roles, prompting a move from active to passive management. While these changes are notable, Julia believes there is still value in active management, particularly for specific or cyclical asset classes. Investors must adjust to this shifting market environment.

Julie Herrman is not affiliated with or endorsed by LPL Financial or Capital Investment Advisers.

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.

The financial professionals associated with LPL Financial may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

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RESOURCES MENTIONED

Market Matters Podcast: https://www.newyorklifeinvestments.com/insights/market-matters-podcast

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CONNECT WITH JULIA HERMANN, CFA
Julia Hermann: https://www.newyorklifeinvestments.com/who-we-are/our-leaders/authors/julia-hermann

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Website: www.CIAdvisers.com