Howard Marks: MASSIVE Opportunity is HERE (1980s again?)

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자막 기준으로 저금리 시대가 끝났고 금리가 새로운 정상 수준에 도달했다고 진단함. 과거 저금리 때 채권 수익률이 매우 낮았으나 현재 미국 10년물 국채 수익률은 약 4.5%대로 올라 채권 매력이 커졌다고 설명. S&P500은 연초 이후 약 5.9% 수익이고 조정 우려가 제기되는 상황이라 신용시장(채권) 비중 확대를 강조. 인플레 우려 시 TIPS 활용과 현금 보유, 분산투자도 제시. 자막 상 발언은 금리·채권에 대한 견해 중심이며 개별 자산의 1~3개월 가격 방향 예측은 명시적으로 없음.

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01. imagine standing on the deck of a ship feeling the winds shift and the waves pick up knowing that the course ahead will be treacherous well that's precisely where we find ourselves today Howard Marx the legendary investor with over five Decades of Market wisdom has recently warned that the financial markets are experiencing a sea change and when Mark speaks investors listen the billionaire investor and co-founder of oak tree Capital Management has witnessed three significant sea change events during his illustrious 54-year career including the dot bubble burst of the late 1990s and he believes that the market is Shifting in a big way for the first time in 40 years creating a once in a generation opportunity for investors like you or me these moments like Tides shifting can reshape the investment landscape and leave Lasting Impressions on investors worldwide in this video we'll explore why Howard Marx sees the current economic climate as such a huge opportunity and will reveal what you can do to profit from such challenging times so let's get started Howard marks recently stated the overarching theme of my SE change thinking is that largely thanks to highly accommodative monetary policy we went through unusually easy times in a number of important regards over a prolonged period but that time is over let's explore what he means by this monetary policy is basically like the Playbook central banks like the Federal Reserve used to manage the money circulating in our economy they tweak interest rates and credit availability to keep inflation and unemployment in check and encourage economic growth inflation is the rate at which prices increase over a given period of time and is the broad measure used to understand the overall increase in prices or the incre increase in the cost of living in a country since the 1980s the US economy has enjoyed many years of low inflation and even deflation in fact for a long time there were concerns about inflation being too low which although sounding good can actually be harmful for the economy as a result the US's Central Bank the Federal Reserve set an inflation Target of 2% in 2012 in an attempt to keep a low and steady rate of inflation in the the economy the FED managed to keep inflation at or below this target during most years since 2012 but this all changed in 2020 and 2021 in order to prevent a widespread economic disaster following the Corona virus pandemic the FED started supplying trillions of new dollars into the US economy the fed's goal was to keep markets functioning after they were spooked by the global pandemic by promoting economic growth and making debt cheaper this worked in the short term and prevented an economic collapse but one of the major downsides of supplying more money in the economy is inflation when the Federal Reserve attempts to stimulate the economy by growing the money supply prices will increase over time the cost of goods will be unstable and inflation will likely occur following the fed's effort to stimulate the US economy the Consumer Price Index a commonly used measure of inflation Rose 6.8% between November 2020 and November 2021 driven by price increases for gasoline food and housing higher energy costs caused the inflation to rise further in 2022 reaching a high of 99.1% in June 2022 a high not seen since 1981 so what did the FED do to try to tackle this inflation problem one of the key tools available to central banks to keep prices under control are interest rates put simply interest rates are the price of borrowing money when interest rates are low it's cheaper to borrow money for things like buying a house or starting a business but when inflation starts to climb the Federal Reserve might decide to raise interest rates they do this to slow down the speed of price increases as higher interest rates make it more expensive for people and businesses to borrow money discouraging consumer spending and discouraging companies from taking on debt to finance expansion this can help keep inflation from getting too high and it is for these reasons that the FED has aggressively increased interest rates in recent years to their highest levels in 20 years as you can see from this chart after 40 Years of declining or almost zero interest rates the FED has been increasing interest rates since early 2022 with significant if ific increases in December 2022 and early 2023 currently the FED funds rate stands between 5.25% and 5.5% matching the highest level since 2001 now before we see why Howard marks sees this shift from low to high interest rates as such a big opportunity please don't forget to click the Subscribe button if you want more weekly updates on how to build massive wealth even in Market downturns okay back to Marx While others see higher interest rates and the end of easy money as a reason to panic Marx sees it as massive opportunity to profit and we'll explain why during periods of low interest rates or so-called Easy Money borrowing costs are low and access to credit is abundant this encourages both consumers and businesses to take out loans for spending and investment businesses can borrow to finance investments in New Machinery technology and infrastructure Drive economic expansion consumers have less incentive to save and low interest rates make it more attractive to buy assets like a house this increases demand for housing which in turn pushes house prices up further increasing wealth and consumer confidence as wealth and consumer confidence increases demand for stocks is high and stock prices go up Howard Marx has argued that the Tailwind provided by Falling interest rates is hard to overstate he contends that such easy money was responsible for a significant chunk of all the money investors made over the last four decades but when central banks increase interest rates it means they are making borrowing more expensive higher interest rates lead to reduced borrowing as consumers and businesses are less likely to take on debt due to higher costs as a result companies May delay or reduce Capital expenditures higher interest rates also discourage spending on Big Ticket items like homes and cars and all of these factors can damage stock prices and potentially lead to a market crash to understand this let's consider the concept of present value present value is used by investors to assess the attractiveness of investing in the stock at its current price by calculating the current value of a company's future cash flows the formula is present value equals future cash flow divided by 1 plus the required rate of return to the power of n n being the number of periods into the future the cash flow occurs by discounting expected future cash flows back to their present value using an appropriate discount rate investors can determine whether an investment opportunity is undervalued overvalued or fairly valued this helps investors make informed decisions about allocating Capital to different investment options and one of the factors that can impact the present value of an investment is interest rates let's use an example to explain this Peter invests in a stock that is forecast to generate $1 million in cash flow for the next year and has 100,000 outstanding shares at the time of investing interest rates are at 2% as a result Peter's required rate of return from owning the stock is 5% to calculate the present value of the Stock's future cash flows we divide 1 million by 1 + 0.05 to the power of 1 which equals 95238 this means the company's stock price is $952,500 th000 shares which equals $952 a share now let's see what happens when the interest rate increases to 8% Peter's required rate of return from his stock goes up to 11% and as a result the present value of the company's future cash flows Falls to $900,000 this means the company's stock price has fallen to $9 a share all because of an increase in interest rates so if stock markets are falling how is there any opportunity out there for invest s well Marx believes that interest rates have reached a new long-term level and the era of ultra low rates that many investors are counting on is over he dismisses concerns that today's rates are high and says that while rates are higher than they've been in 20 years they aren't high in absolute terms or relative to history looking at this chart again you can see that when Mark started working in 1969 the FED funds rate a averaged 8.2% in the 20 years after that the rate ranged from 4% to 19% from 1990 to 2000 the last period that Marx thinks was normal the rate was between 3% and 8% suggesting that today's rate of 5.25 to 5.5% is firmly in the range of normal and indeed the low and almost zero interest rates experienced since 2008 were actually abnormal in his words there clearly isn't much room for interest rate declines from today's levels and I don't think short-term interest rates will be as low in the coming years as in the recent past I'm not saying interest rates are going to go back up I just think they're done coming down with interest rates reaching their new normal Marx sees a huge opportunity for investors to profit as a result he recommends the following strategies strategy one enter the bond market the bond market is where people lend and borrow money when you buy a bond you're lending money to the government or a company which promises to pay you back with a little extra in the form of Interest or coupon rate and when interest rates are high newly issued bonds offer higher coupon payments relative to their face value so investors purchasing bonds at these higher rates receive more income in the form of interest payments compared to bonds issued at lower rates bonds are typically considered less risky than stocks because they offer fixed income payments and return of principle at maturity this means investors can potentially preserve their Capital more effectively by investing in bonds during periods of high interest rates in the past because interest rates were so low bond yields were incredibly unattractive when compared to equities as it was so hard to make any more from them take a look at this chart as you can see the yield on a 10-year us treasury bond in the middle of 2020 was approximately only 0.5% per year whereas today thanks to the interest rate hikes over the last few years yields are now Above 4.5% This is the highest rate since 2007 almost 17 years ago compare that to the snp500 which has so far returned 5.9% in 2024 and for which many are forecasting a market crash later in the year as the FED is expected to fail to achieve a soft Landing for the economy from high inflation when you consider that treasury bonds are widely considered to be one of the safest Investments going the additional 1.4% return you would have got so far this year from investing in the S&P 500 hardly seems worth the significant risk associated with the current market uncertainty and remember this is in the current climate where many stock market commentators suggest the S&P 500 Could Fall by as much as 30 to 40% in the coming months compare that level of risk and potential downside to the guaranteed 4.5% earned on a 10-year us treasury bond and it's a pretty easy choice to make and this is why Howard Marx is so strongly in favor of the credit market right now Marx believes that investors can now access returns in credit markets that are highly competitive versus the historic iCal return on equities without having to face the risk and uncertainty associated with Equity stocks it's a sea change that separates the adaptable from the anchored in his words unless there are serious holes in my logic I believe significant reallocation of capital toward credit is warranted and if you're worried about high inflation you can invest in bonds that adjust for inflation known as treasury inflation protected securities or tips these bonds increase their payouts with inflation helping to protect your money when inflation Rises so does the value of a tips investment both in terms of the base value and the interest paid on the base value as the interest payments increase with the base value increase strategy two build up cash first and foremost when interest rates are high cash and cash equivalents such as money market accounts or short-term certificates of deposit CDs offer higher yields compared to periods of low interest rates by holding cash in interest bearing accounts investors can earn a more attractive return on their idle cash balances maximizing the potential for income generation holding cash also provides investors with flexibility and liquidity to capitalize on investment opportunities as they arise this is particularly important during a market downturn as when others are panicking and selling stocks this can create opportunities to pick up a bargain whether it's buying shares of strong companies at discounted prices or investing in undervalued sectors cash gives you the flexibility to capitalize on these opportunities when others are fleeing the market by holding cash you can also resist the temptation to chase after every Market Trend or hot stock instead you can wait patiently for the right opportunities to come along knowing that you have the financial Firepower to act decisively when the time is right so if you're looking to position yourself for success as an investor don't underestimate the importance of holding cash it could be the key to profiting from Market crashes and building long-term wealth strategy three diversification and asset allocation diversifying your investment is equally important it means spreading your money across different types of Investments instead of putting all your eggs in one basket you place them in several this way if one investment doesn't do well you have others that might be performing better you can diversify your investments in many ways this includes investing in different Industries different types of assets and even in different countries this strategy helps to reduce the risk of losing money and can lead to more consistent growth over time as mentioned earlier bond yields are very attractive right now particularly with all the current uncertainty on what's going to happen to the stock market in the coming 12 to 18 months however that doesn't mean to say you should now sell all your equities and put all your money into bonds nobody really knows what will happen in the stock market in the coming years while some investors expect a significant market crash others expect a much softer recovery one thing that is for certain is that it's impossible to predict the market and as a result it makes sense to hedge your bets and invest in a broad range of Diversified Investments by including a mix of equities that may be less attractive when interest rates are high and bonds which will be less attractive if interest rates fall back to previously low levels so there you have it the reasons why Howard marks sees such a big opportunity in 2024 and the steps you can take to maximize your returns during these times if you want to learn more about how you can Max maximize your investment opportunities during a recession head on over to this video where I show you just that thanks for watching and