Name: NY Life Insurance CEO Says 'Take the Emotion Out of Investing'
Uploaded: 2018-08-16
Duration: 4 min 35 s
Description: CEO Ted Mathas is confident about the 'long-term' outlook for the financial market.

[ MUSIC ] Ted, most people don't connect life insurance with the stock market, but your company, New York Life, manages more than half a trillion dollars for your clients. A lot of that money is in the stock market. And we've seen the markets hitting [ UNKNOWN ] To new highs, new records. But also, we've seen the Stock Market going in the opposite direction. Now that we're at the halfway point of the year, tell us what is your outlook for the rest of 2018? Sure, so if you look to the fundamental Economic indicators, right? The unemployment levels are at all- time lows. It does look like we have seen and we continue to see growth around the globe, with the US being a strong provider of growth. Companies are still doing very well. So we still feel very good. We're not increasing any of our Exposure to equities, but we're very confident with the level of equities that we hold. The things that we would be watching over time would be to see is there any sign of wage inflation to a specific degree that might force the federal reserve to react quicker than it is planning. That would likely be in the nearer term some downward Economic news. It could depress the equity markets. Well given the volatility that you're talking about, and also the uncertainy, what are New York life agents telling your clients to do about their portfolios? Is it time to rebalance them? Time to change the investment strategy? Or just Stand packed. The best thing that our agents do when they meet with people is they try to take the emotion out of investing. If they own equities, they should have a longer term time horizon. And if they have a longer term time horizon, they shouldn't be as worried about near term market movement. Well, thinking of the long term perspective that you're focusing on. What is your take on this recent proposal from Warren Buffet of Brookshire Hathaway and Jaime Diamond, who's CEO Of JP Morgan that they're saying that public companies should move away from providing quarterly earnings guidance. And they say that long term strategy, not short term profits, is what drives economic growth. What's your take on all of this? I think they're absolutely correct. So if you remove the guidance , okay, then what you are doing is you are freeing up senior management teams to more dynamically make one of the most important decisions they have to make, which is the tradeoff on any given day or week between Investing the longer term, or taking the gain that day. So I think it's actually a smart idea. I think it's a start in the right direction of helping companies manage more for the long term. The point that they are also making that companies are holding back on investing. In tech spending or in research and development because they wanna have good quarterly results. Do you agree with them on that? I do agree that why put off a smart decision, right? Because of the near term which Frankly are optics associated. Often times when we're dealing with these quarterly earnings, you're talking about the difference between companies do and what they said they were going to do. It's such a small amount and yet it moves the market. Well that difference There should not be a driver, and it isn't really related to the longer- term economic fundamentals of that company. Now, can I talk to you a little bit about interest rates, and you refer to it just a moment ago, it seems that interest rates are going up, do you see that returns are going to be improving and what does this mean for New York life. Clients who have fixed income portfolios and annuity investments. It is good news and welcome news to see a slow, upward movement in the longer term interest rates. Now you don't want to see a big spike, we don't want volatility in this area either. But for us. The ability to essentially lean into a rising interest rate environment and pass on those higher yields in terms of products that we offer our clients would be welcome news. Are you coming up with any new products that can benefit from this rising interest rate environment? We haven't come up with any new product. It really is that it actually just adds more value to almost every product we offer. One of the things for example, we do is we offer people guaranteed lifetime income. It's one of the great things about the life insurance industry, is that we can do this. So essentially, we don't have to create a new products, but each day that rates go up Those products actually are able to offer a higher income level, say to somebody in retirement that we could have offered the year before or the year before that. [ BLANK_AUDIO ]

NY Life Insurance CEO Says "Take the Emotion Out of Investing"

Finance

CEO Ted Mathas is confident about the "long-term" outlook for the financial market. 