Richards: People Fear Bad News Not Priced Into Markets

The video discusses the challenges of investing in a market where asset prices are inflated and economic growth is anticipated. It emphasizes the need for smart investment strategies, such as investing across different points in a capital structure and considering less liquid investments like infrastructure. The video also highlights the risks of market corrections if expected economic improvements do not materialize and suggests that investors should be prepared for potential volatility in 2017.

What is meant by 'investing across the cracks' in a capital structure?

• Investing in only high-risk stocks

• Avoiding all types of equities

• Focusing solely on bonds

• Exploring different points in a capital structure for price differentials

What market trend is expected to continue in 2017 according to the transcript?

• A shift from value stocks to growth stocks

• A continuation of the rally in value stocks

• A decline in bond proxy stocks

• An increase in technology stocks

What is a major risk associated with current asset prices?

• They are undervalued

• They are unaffected by tax cuts

• They are priced for perfection

• They are not influenced by economic growth

What is a potential benefit of investing in less liquid assets like infrastructure?

• A premium for locking money up

• Higher liquidity

• Immediate access to funds

• Lower risk

Why might investors consider giving up liquidity in their investments?

• To increase short-term gains

• To potentially achieve better trade-offs

• To use equity markets as an ATM

• To avoid market volatility