Equities

When Everything’s Uncertain, Stick to Your Strategy

By Frank Caruso April 05, 2017
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We operate in a market, an investment market, where there’s just an unbelievable amount of liquidity—of capital—that needs to be invested. And there’s a tremendous amount of pressure on investors to generate returns, to be on the right side of short-term momentum.

We think that kind of responding to that in any way, shape or form—whether it’s an investor who is tempted to become more aggressive because they think that the higher levels of market prices is signaling kind of…kind of an increase in potential—those behaviors are dangerous. And, you know, I think, for us, we never lose sight of that. And so we continue to be careful with regards to understanding the economics of our companies, their balance sheets—and really being very, very thoughtful about the risks we take when we’re investing kind of client capital.

In this environment, there are people that are desperate for performance that are chasing momentum and betting on an outcome that continues to be unbelievably unpredictable. And so when we engage on identifying ideas, we stay away from where it’s like betting or what are you playing for. It really is all about being very disciplined and thoughtful, and doing the best job we can to connect a client to really their strategy, their needs. We want to be a consistent provider of solutions to their needs.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

When Everything’s Uncertain, Stick to Your Strategy
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