Navigating Investing in Today’s Markets with Matt Wittmer
Portfolio manager Matt Wittmer emphasizes the importance of diversification, both across portfolios and within secular growth trends.
Transcript
Cameron Pickoski: We're here in Fort Lauderdale this week at our National Sales Summit, where the theme is “Charting the Course.” With that in mind, we wanted to talk to you, Matt, about how you're navigating investing in today's markets, especially with equity market performance increasingly concentrated in such a small group of large-cap stocks, and how that makes you think about durability and diversification within a long-term portfolio.
Matt Wittmer: Yeah, I think it's an important topic, and I think you said the key word there—and that's diversification. I think that's going to be an important part of long-term returns, especially risk-adjusted returns. So, especially what we're seeing in the market today with all that concentration, for long-term investors, it's important to have exposure to those secular growth areas of the market. But, I think you need to diversify across the whole portfolio, but then also within that—those secular growth trends. If you think about AI (artificial intelligence), especially the five layers—you've got energy power; you've got the large language models; you've got the infrastructure, which is basically the chipset; you’ve got the hyper-scalers, those cloud providers; and then you've got the applications that are sitting on top—I think it's important to have exposure to all five segments, not concentrated into just one. And, so, that also goes further out into the whole portfolio itself—a holistic approach to investing not only across the portfolio but also within the secular growth trends themselves.
Key takeaways
- Diversification is Key: In a market increasingly concentrated in large-cap stocks, Matt believes diversification remains critical for achieving strong, risk-adjusted long-term returns.
- Broad Exposure to Growth Trends: Investors can look to diversify within secular growth areas, such as AI, by gaining exposure across its five layers, including energy, infrastructure, and applications.
- Holistic Portfolio Approach: The team believes a well-rounded investment strategy requires diversification not only across the entire portfolio but also within specific growth sectors to mitigate concentration risks.
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