CTalk"It’s time to focus on companies using technology, not just developing it"
CTalk
"It’s time to focus on companies using technology, not just developing it"
Kevin Gardiner, global investment strategist at Bank Rothschild & Co., on why investors should broaden their focus beyond tech innovators.
Kevin Gardiner
(Rothschild & Co)
"Thanks to the unique convergence of falling inflation and ongoing economic growth, the financial markets are currently experiencing a favorable climate, especially for bonds and stocks," said Kevin Gardiner, global investment strategist at Bank Rothschild & Co., in an interview with CTech as part of the Mind the Tech London 2024 conference by Calcalist and Bank Leumi.
According to Gardiner, this combination of falling inflation alongside economic growth creates the potential for interest rates to drop, which is beneficial for bonds, while there is also the possibility of an increase in corporate profits, which is good for stocks. "Additionally, for the first time in decades, we are starting to view bonds as a fairly attractive asset," Gardiner added.
That sounds even more optimistic than expected.
"I would say that it's more realistic than optimistic. In my role, I try to understand the global economy and capital markets and translate this understanding into useful and, hopefully, profitable advice for our clients, most of whom are private individuals and wealthy families, as well as companies. We analyze the macroeconomic environment and distill this into effective investment advice."
What sectors are you currently focused on, particularly in the technology field?
"Until recently, we primarily concentrated on stocks, and the interest in bonds is relatively new. Within the field of stocks, the United States and the technology sector, in particular, interest us because there is a lot of innovation there, not only in technology itself but also in areas that benefit from technological advancement. If we have misconceptions about the market today, it might be that the market is a bit too narrow and overly focused on technology. It would be good to see a market expansion, investing in companies that benefit from technology and not only those that develop it."
Let’s focus on the UK. What are your insights regarding the UK market?
"The British economy is sometimes portrayed as particularly weak, but in my opinion, the reality is more complex. Personally, I didn’t want Britain to leave the EU, but it happened, and it wasn’t the economic disaster that was expected. In fact, in recent years, the British economy has performed better than Germany, for example. However, it's hard to translate this into practical investment advice, particularly in the technology field, because very few tech companies are listed on the major London stock exchanges. This is part of the reason the British market has lagged behind the American and global markets over the last decade."
How are global geopolitical changes and economic factors affecting your advice to investors?
"This year is definitely challenging, both in terms of the geopolitical backdrop and upcoming local elections. For example, there’s a significant election in the U.S. on the horizon. However, while these matters are of tremendous personal significance, in the narrow context of investing, they are not always as decisive as the business cycle or interest rate movements in the U.S. The most important factors for long-term investing remain the global economy, interest rate cycles, and corporate profitability."
