This will be the year of the bonds, says TIAA's Kourtney Gibson

Let's welcome Courtney Gibson of TIAA into our conversation as well. Court, it is so good to see your face and have you back on our network. Welcome back. What is your market view? Scott, it's so great to see you and Joe, as always, it's a pleasure to see you too. So, you know, it's really interesting at TIAA, we have a long term view. And so whether it's my personal portfolio, as both of you know, I've always been a buy and hold. It was rare that I was kind of planning and out of the markets anyway, because at the end of the day, what I'm using the markets for is to help secure the future.

And you can't kind of go back and forth. Joe, I love what you said about kind of us being in purgatory right now around the markets. You know, the VIX has really sat kind of in a one to two point range. It's really since the beginning of the year. It has not flurried a whole ton. And when you think about why that is, I mean, this is going to be the year of bombs, if we're being honest with each other. Right, so stock market, we're going to be focused on high quality dividend playing stocks.

You're going to be kind of seeing that flight to quality continue. You're going to see a stock pickers market. This is not the time for passive managers to really kind of shine. It's the time for those active stock pickers to be in the market. And when you think about a diversified portfolio, really thinking about what is that allocation to bonds look like? Are you conservative? Are you risky? You know, Scott, seven months ago when we were talking, everything was going up. When you think about where we were in the market cycle, anything you kind of threw a dart at a wall, you could win. But right now you've got to have some skills to be picking stocks.

And so if that's not your game, focusing on a diversified portfolio, high quality stocks right now is where I'm focused, having an allocation to bonds, having an allocation to bond proxies like the infrastructures, as well as some alternatives exposures, including annuity. So give yourself a well-rounded portfolio, and that's how I'm focused right now. Are you then leaning on it's more, if you're an equity investor, that it's more time to take profits than take on more risk? If you said in your words, this is going to be the year of bonds? You know, so I am not telling you to sell your stocks. I'm not selling mine personally, especially not if they're at a loss. There might be some points in the market or in your portfolio, depending on how long you've been in them that you've got some nice gains. And this may be a time to take a little off the table, but I'm not selling, quote unquote, my losers. I'm not going to be selling Goldman Sachs today, for example.

I'm not going to be selling Walmart. I'm not going to be selling some of those names that are kind of in my portfolio for the long term, because this isn't the time to do that. I'm not scared of the markets like you just talked about time and price, right? So if you believe in the fundamentals of the equity holdings that you have, you stick with them until you hit a point where you believe that it's time to sell. And there might be some points where you are reallocating. Again, if you're a young person in the market right now and you have a longer time horizon and you have the income to sustain without selling, maybe you're dabbling in some of those high quality names right now that you might be underallocated in your equity portfolio because of the dips that we've seen over the last almost two years at this point. So I want you to weigh in. I mean, it's an interesting comment and maybe controversial in some respects.

It's going to be the year bonds, right? I mean, there's this whole conversation about 60-40. 60-40 got off to one of the best starts it has had in decades this year. Are we fooling ourselves into thinking where equities might be able to go? Well, first of all, I have to say it's great to see Courtney back on the network. Courtney, I look forward to many more times and appearances with you. But it's been this year about the value restoration in the taxable fixed income market. And the fixed income market has been leading overall markets to wherever the journey is going to take them. I agree wholeheartedly with what Courtney is saying, where she's identifying opportunities that go beyond concentrating towards the big five, concentrating towards the hyper growth stocks, concentrating towards the US or large cap or the areas of the market where you were rewarded the last several years.

Now it's about considering full diversification. And yes, the bond market is giving you tremendous value that's being restored again. The last point on that is think to yourself for a second. You have an unprofitable company.

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