Curtis Arledge, BNY Mellon's Investment Management CEO, considers the secular and structural changes recalibrating global financial markets and explains why now is a better time than ever to be an investor.
That Genie Is Not Going Back Into the Bottle
Once upon a time, businesses often turned to banks for their financing needs.
That status quo is changing rapidly. According to Curtis Arledge, BNY Mellon's head of Investment Management, regulations like Basel III now require banks to keep more of their capital on hand. So, who will business borrowers turn to for the financing they need? Private investors like pension funds, endowments and large family offices have new opportunities to provide that capital to help grow businesses and the economy.
Historic Market Changes Spurring Investors to Learn New Global Skills
"These investors have the ability to invest in seed capital opportunities they may not have seen in the past," Curtis says. He believes historians will look back and say this was the moment that private investors became more involved than ever in the economy.
In this new landscape, investors need to be more global in their outlook. Change, wherever it occurs, gets communicated back to them almost instantaneously. So, what should investors do to position themselves for the coming opportunities? Curtis offers the following three suggestions:
Accept volatility in emerging markets. It's part of the dynamics of an emerging market. Understand this and the implications.
Genuine diversification is more important than ever. Think globally, for growth and returns will show up in different places. "You can't just invest in the U.S. equity market, because the U.S. equity market is not simply about the U.S. economy anymore," says Curtis.
Understand the role of government in markets. The government is now "a third very large player" in markets. They're viewing economic data and acting upon that information. It's important to understand what they're looking at and how they see their roles.
In a nutshell: it's time to develop a new set of skills around global investing. For the times are changing, and there's no putting that genie back in the bottle.
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