00:00I wonder how you think of investing for retirees around these, you know, incidents or around these, I mean, a
00:11war, it's hard to downplay the importance of that, but it could be over in a few weeks, it could
00:16be something that lasts a year.
00:19So how do you deal with that in a retirement account?
00:21Yes, so we actually measure the confidence of our plan, millions of plan participants, and things like geopolitical risk, things
00:31like market volatility, things like inflation, all can kind of shake their confidence.
00:38However, one of the really strong parts about the retirement industry through advisors, through employers, through solutions providers like Voya,
00:50is that we've actually enabled over the last couple of decades to help people learn the lesson about long-term
00:58investing, long-term planning, sticking to the plan, staying the course.
01:03And so while we know these are uneasy events for plan participants to be involved in, we actually track in
01:12aggregate behavior all the time, but in particular to this as it relates to market, high peaks of market volatility.
01:21And people really are taking those lessons and staying the course or sticking to the plan.
01:27And so we'll see, in peaks of market volatility, that 98% to 99% of people do not do
01:36erratic kind of allocation investment changes.
01:39They really do stay the course.
01:41So I would expect for them to have similar behavior during this time, for just those reasons.
01:48It could be a very short-term thing.
01:50It could be longer term.
01:51But it's interesting as it comes at the same time that people who are supposed to be sophisticated investors and
01:58understand the illiquidity of private credit, for example, are rushing for the exits.
02:05I mean, that doesn't seem like they're staying the course.
02:08When I hear that B-Cred is getting redemptions of more than 7%, almost $4 billion, it seems like they're
02:16not staying the course right now.
02:18It's a great point in the differentiation between an individual retail investor and then if you think about someone in
02:25the context of their retirement plan, their employer-sponsored retirement plan, you'll continue to see people staying the course.
02:34A lot of what also is involved in the retirement plan is a lot of professional management.
02:39So you'll have vehicles like a managed account, an advisor-managed account, or a target date fund that are actually
02:46being professionally managed as well.
02:48But I would draw the distinction between that individual retail investor and a plan participant who is looking over the
02:56longer term of their working years.
02:58But you still do need to have a plan, I'm assuming, in moments of volatility.
03:02Lori Calvacino of RBC did a study saying that, yes, short-term conflict, stocks can rally off the back of
03:08it.
03:08But if it is a war, the majority of war, risk assets end down 12 months from now.
03:13How do you think about appropriate hedges in long-term portfolios right now?
03:18Usually it would be something like gold, but that feels more speculative.
03:21Is it bonds?
03:22How do you kind of balance out a portfolio to be able to continue to outperform in moments of volatility
03:26like that we're living in right now?
03:28Yeah, so I'll, again, answer in the context of retirement, in the context of someone who has a retirement plan,
03:37as opposed to what an investment manager might be doing.
03:41And so you'll see people taking advantage of these different capabilities, like managed accounts, like target date funds,
03:49where the investment manager is actually making those trades on their behalf so that they don't have to do that
03:56and they don't have to think about that.
03:58Yeah, I have to say, I know you're not a commentator on daily markets, but to look at gold down
04:034% this morning,
04:04when it had been a hedge and it had been rocketing to new levels, how were you thinking about that
04:09asset specifically?
04:10I really would have to, you know, indicate that that would be really an appropriate question for more of our
04:18investment management group
04:20and that we are, you know, continue to support our plan participants with respect to how they look at their
04:28assets.
04:28Most plan sponsors, most employers do not actually have things like commodities and those precious metals in their retirement plans.
04:38They actually may allow them to do that through a self-directed option, but by and large, those investments are
04:47actually not available in retirement plans.
04:50Those are choices that the fiduciaries have made, perhaps to avoid things like these swings.
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