Research in Action: Staying Invested Through Market Volatility
A diversified portfolio of 60% stocks and 40% bonds has not provided the buffer it normally does against market volatility in 2022. But that's not a reason to give up on markets, says Adam Hetts, Global Head of Portfolio Construction and Strategy. In this discussion, he explains ways to help fortify investment portfolios for the current environment and why it's so important to stay invested.
- A diversified portfolio has offered less-than-usual protection against market losses this year, as rising interest rates cause valuations across many asset groups to reset.
- But unlike during the Global Financial Crisis, the economy does not face a systemic risk. Focusing on high-quality companies with sizable moats could help fortify portfolios going forward.
- Historically, some of the market’s best days have followed the worst losses. Staying invested can make all the difference to long-term returns.
MSCI All Country World Index℠ reflects the equity market performance of global developed and emerging markets.
S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance.
Nasdaq Composite Index a broad index heavily weighted toward the important technology sector
Quantitative tightening (QT) is a contractionary monetary policy tool applied by central banks to decrease the amount of liquidity or money supply in the economy.
Quantitative Easing (QE) is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market
An inverted yield curve occurs when short-term yields are higher than long-term yields.
A chartered financial analyst (CFA) is a professional designation given by the CFA Institute that measures and certifies the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas, such as accounting, economics, ethics, money management and security analysis.
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Carolyn Bigda: From Janus Henderson Investors, this is Research in Action, a podcast series that gives investors a behind-the-scenes look at the research and analysis used to shape our understanding of markets and inform investment decisions.
So far, the year 2022 has been miserable for investors, with stocks posting their worst first half of a year in decades. Even typically less-volatile assets such as U.S. Treasuries have suffered losses. On this episode, we’re joined by Adam Hetts, Global Head of Portfolio Construction and Strategy and host of the Global Perspectives podcast here at Janus Henderson. He says many investors now question whether the traditional 60/40 portfolio is still a viable investment strategy, especially as inflation, rising interest rates, and other drivers of market volatility aren’t going away.
Adam Hetts: So, the 60/40 is not dead. We do think it’s having this kind of midlife crisis in the sense that a lot of things are going to need to change in the 60/40 going forward. But the upshot is, I think it’s getting pretty clear what needs to change.
Bigda: I’m Carolyn Bigda.
Matt Peron: And I’m Matt Peron, Director of Research.
Bigda: That’s today on Research in Action.
Adam, welcome to the podcast.
Hetts: Thanks for having me, it’s good to be here. Compared to hosting a podcast, this feels like a vacation, so thanks for doing all the hard work today.
Bigda: No problem. Well, we’re very lucky to have you, but I’m actually going to start the conversation off with a question for Matt, if you don’t mind. Matt, the first half of 2022 has been interesting, to say the least. Major indices such as the MSCI All Country World IndexSM and the S&P 500® Index declined roughly 20%, the official tipping point for a bear market. And high growth indices such as the NASDAQ Composite Index have fallen even more. Can you summarize sort of what’s happened and what’s driven the persistent selling?
Peron: Yes, sure thing. So maybe to back up, as we said last December, we said that inflation was our number one, two and three risk for equity markets. And unfortunately, that risk played out in the sense that we were worried that there would be an aggressive policy response to inflation, which was accelerating at the time. And that’s, in fact, what has happened. Higher rates are anathema for equity multiples, so the equity multiple had to come down. And then on top of that, we had fears of the recession that is going to be brought about by, you know, either a policy error or a necessary policy response, which would then slow down the pace of earnings growth, potentially cause a contraction in earnings next year. So that started to get priced. So, that toxic cocktail, if you will, all came front and center in the first half of the year.
Bigda: Adam, you and your team work with clients daily, helping them to construct portfolios suited to the market environment, their goals and risk tolerance and so on. You know, what have you been hearing from clients? What’s the general mood these days?
Hetts: The general mood has just been a lot of fear this year, and for good reasons, of course. But leading into this year, the S&P had doubled in the last three years. So, I think investors and clients also need to pat themselves on the back a little bit more for staying invested through those three years while things doubled and maybe, you know, kick themselves a little bit less while they’re down so far this year. And it has been really tough, and all that fear has been driven because nothing’s worked. You know, that typical 60/40 has taken losses on both ends, as stocks and bonds sold off together and correlations were the only thing that went up in your typical 60/40. But you know, we’ve hit this 20% hurdle, which is a bit of a psychological barrier and it kind of hits almost a technical barrier of a bear market. So, I think the client conversations have started shifting. It does feel like we’re past the peak-fear mode, and now it’s more of a question of how to invest right now and not if you should go to cash anymore, which is a good thing.
Bigda: Yes, Adam, could you maybe just briefly – given that we typically talk about stocks on this show – just give a little explanation as to why bonds also sold off this year?
Hetts: The reason why bonds sold off this year – I mean, it’s all of these different risks that Matt was talking about. And in one sense, everybody knew these things were coming, as we had historical amounts of stimulus going into the system and rates plummeted during the 2020 sell-off. We knew we were going to have to pay this back at some point. And going into this year, it just felt like it came a little bit sooner than maybe some people thought, but it was exactly what we thought was going to happen. Inflation was going to skyrocket, rates were going to start jumping, the QT was going to start happening instead of QE – the quantitative tightening instead of quantitative easing. And so, add to that, correlation between stocks and bonds went up almost to 1.0. So, you had rates going up on bonds. And as rates go up on bonds, bond holders take losses in what they own, which are the lower-rate older bonds, so that makes sense. And then stocks are also taking losses, to Matt’s point, as this repricing was happening. But that’s what it was. As painful as it’s been, it’s been a repricing, which a healthy market does as it functions. It’s a correction. It’s something to bear through. It hasn’t been a crisis. Nothing’s broken, at least not yet. So far, this has been something to weather and process as an investor. And so that’s the 40 of the 60/40, and I think that’s why things got particularly disorienting for investors because it wasn’t just a correction in equities, an equity bear market; bonds are also having historical losses this year. And so, in turn, a 60/40 had historically bad losses, worst in decades.
Bigda: Right, so the 60/40 portfolio is 60% stocks, 40% bonds. And it sounds like, from what you just said, that the 60/40 portfolio is not dead, even though some might claim that. So, can you explain a little bit more about why that might be the case?
Hetts: Yes, we don’t think the 60/40 is dead. And we’re not saying 60/40 is the answer for most investors. It’s just a typical reference point of a balanced mix of stocks and bonds. So, the 60/40 is not dead. We do think it’s having this kind of midlife crisis in the sense that a lot of things are going to need to change in the 60/40 going forward. But the upshot is, I think it’s getting pretty clear as we’re kind of weathering the first half of this year, kind of what needs to change so that investors cannot just manage the risk as this correction settles in, but also, they can participate in the upside once all this passes.
Peron: And so, Adam, it sounds like what you’re saying is that the 40 – the bond portion of the portfolio – after this reset is over, will still function as a hedging mechanism for the 60. Is that fair to say?
Hetts: Yes, good point. Because when people talk about the death of the 60/40, I think a lot of it means is, it’s the 40 and the role of that 40 and is it going to diversify the 60 anymore? Correlations went up and that was fine, but correlations went up during this kind of correction. I would argue that if earlier this year, if we had some alternate reality where we went into crisis mode and things broke, kind of regardless of where bond rates were, they would have found a way to rally and be a flight-to-quality part of a portfolio and diversify the 60 in a 60/40. So, for example, going into the COVID crisis – right now, the U.S. 10-year [Treasury yield] is around, call it 3%. We were about half that, around 1.5% going into the COVID crisis. Those are really low rates and basically, historically low at the time, and they still rallied as we hit the COVID crisis. So, no matter how low rates are, people will still buy sovereign bonds for crisis protection, not necessarily correction protection.
Another history lesson, you can go a little further back to Black Monday; not Black Monday 1987, but Black Monday actually in 2011. The cause of that crisis was the U.S. getting downgraded, and so that’s what drove the market sell-off on that Black Monday. So, in simple terms, the U.S.’s ability to repay got downgraded, it caused the crisis. So how did investors react? They bought Treasuries; they lent the U.S. more money. So, that’d be essentially like your credit score getting clobbered and then your mortgage rate getting lower at the same time. That doesn’t make any sense for a person, but for a sovereign, for the U.S. as the biggest, most liquid bond market, that just means the paradigm didn’t shift then. It didn’t shift during COVID. Correlations went up year to date, but now we’re hovering around 3%, and we think bonds will survive as that strategic risk manager in your core portfolios.
Bigda: And you’d argue that we’re not in a crisis even though inflation is at multi-decade highs. This is just a correction in your view?
Hetts: It’s a market correction in response to that historically high inflation, and inflation is a huge risk, and high single-digit inflation is brutal across almost all asset classes. It doesn’t mean anything’s necessarily broken, at least not at this point.
Peron: I think the point Adam makes about correction versus crisis is very important for investors to be aware of. They very much went through a lot in the Global Financial Crisis, and people keep going there.
Bigda: So, a lot of people have anchored their experience to the Global Financial Crisis and that is influencing how they’re thinking about markets today. And there’s a danger in that because what we’re going through right now is a different experience because it’s really about inflation and interest rates rising. Whereas back in 2008/2009, that was a systemic crisis, where capital wasn’t available, where banks’ balance sheets were blowing up…
Peron: The banking system was, you know, the plumbing of our economy was basically blown up. The way I frame it to clients is, that was a balance sheet recession. This is probably going to be more of an inventory or income statement recession, where you just have profits slow down. Those are very different, right? The income statement or the inventory cycles are generally milder. The balance sheet recessions are the big doozies, 1929, 2009.
Bigda: Right, but I do think that…I mean, we do hear a lot about stagflation and the repeat of the ’70s and the early ’80s. And the way that it’s presented is that those were times that you do not want to repeat, that they were very difficult periods in the economy. So, I guess we’re saying that it’s a different experience right now in the economy and the markets, but it’s still a difficult one. Is that fair.
Peron: Difficult, absolutely. I mean a 20% bear market, very difficult. But I think the stagflation, it’s a little different. I mean what gives us some encouragement is the fact that the Fed [Federal Reserve] is on it. Now the risk is that they go too far, you know, in squashing inflation. So, stagflation could happen because some things are out of their control. But anyway, people would say, “We’re going into a GFC.” I hear this on CNBC or whatever, and then why I want to get out. I want to be in cash.
Hetts: I think that’s it. It’s everything that you’re seeing on these headlines because there’s so much moving around this year. It’s moving so fast. But I think coming into this year, we had a really strong economic baseline, and it still is strong. And that helps make sense out of the talk about if or when there’s a recession, it’ll be a relatively mild, not a very deep recession; not a 2008-style recession because it speaks to the fact there’s a strong economy. So yes, all the slowdown, in a weird way, it’s demand driven. Wages are continuing to increase with a lot of wage inflation, but that’s sort of a good thing that there’s that much demand. And then a lot of it’s supply driven, too, in these supply constraints. But a lot of good demand and wage increases, supply constraints, which means the supply can’t keep up with the demand. That all doesn’t add up to a broken economy. That just adds up to a pretty big logjam that we’re all dealing with.
Bigda: And Matt, could you just define stagflation for us?
Peron: Yes, higher inflation and no growth.
Bigda: Doesn’t sound like a good combination.
Hetts: No, not fun.
Peron: Especially not if you’re an equity market investor, yes.
Bigda: Okay, so the economy is in relatively good shape, but investors’ portfolios might need some tweaking. So, what can be done using the 60/40 portfolio as that base? What are you telling clients these days, Adam?
Hetts: So, in terms of where to go from here, I think a helpful way to think about that equity exposure and a way to tap into what is still a strong economic foundation underneath all this noise is to think about equities sort of mechanically and to really kind of boil down everything that we’re talking about. If we had to pick the risks that we’re laser-focused on, it’s slowing growth – whether it’s recession or not, that’s kind of a binary thing – but it’s unequivocally slowing growth. It’s inflation. We were saying duration, i.e., interest-rate risk. Now, it’s more of just interest-rate volatility because rates are still oscillating quite a bit to the good or bad of bond holders. So, those are the key risks: slowing growth, inflation and interest rate volatility. And if you think about equities mechanically, there’s a lot of aspects of equities you need to be paying particularly close attention to right now that are really sensitive to those few risks in a good or a bad way. So, I’m thinking about [profit] margins of individual companies, the way they use leverage, the way they run their business, the competitive landscape and their competitive positioning, and then the management strategy of those companies. So, I think picking stocks with the right mix of those things that are sensitized to those risks in a positive way can help investors survive what is basically a downturn right now and be exposed to the inevitable kind of upturn as we get out of this.
Bigda: Yes, I think you and your team have actually come up with a pretty clever acronym for thinking this way, which is MOAT, right? And normally a lot of investors might think of moat as just the competitive advantage that a company has built around it, but you’ve broken it down into these different factors. Would you like to talk about that a little bit more?
Hetts: Yes, thanks. So, we’ve got this cute acronym MOAT, or this mnemonic, and we’re essentially talking about what quality investing means in a very volatile environment right now. And so, moat investing is kind of one of the most well-known terms of quality investing, and people think about Warren Buffett. But if a company has a moat, they’ve got a barrier around their business model and they can survive recessions, they can survive downturns, they can survive competition. So, that’s one piece of it is having a good moat in a rough environment. But kind of pulling that concept up top and making it a broader acronym or mnemonic, it just helps us remember and stay focused on what we think is important about stock picking right now. So, the moat, M-O-A-T, is M for margins that are wide, O for good ownership that’s nimble and managing the surprises this year. The A is advantages in the marketplace – that’s the classic moat, competitive advantage – and the T is for tenacity in financial and funding strength to weather the rising rates that are going on so far this year and that’ll still be trickling into balance sheets and affecting financials of companies for a few months to come.
Bigda: Matt, are these qualities that you and your team are also looking for and that you would encourage investors to consider?
Peron: Yes, certainly. A big cornerstone of how we invest is to check the MOAT, so to speak. And then, of course, you want to get it at the right price, so getting that high quality that Adam’s referring to in his MOAT construct and getting it at the right price and across all the sectors so that you’re not too overloaded. One thing that we see people tend to do is get overweight into one sector or several sectors. You want to make sure you source that quality at the right price across all the sectors.
Bigda: And why is focusing on quality, you know, using this MOAT acronym as a guide, why is that especially important in this environment?
Peron: Well, I think going into a slowdown, in particular, you want to make sure you have a fortress portfolio, so to speak, and quality is a key lever to ensure that your portfolio can withstand the stress. Even in a slowdown, you will see margins start to erode if you don’t have that pricing power, etc. So high quality is a key tool you have in the toolbox going into a slowdown that really keeps your portfolio sort of in the game and above water.
Hetts: A couple of examples, I’d say, given what those few risks are that we’re very focused on right now: So, for example, if you’re concerned about inflation, that’s the margins. Companies with much wider margins can handle cost increases and that’s going to be a smaller percentage of their overall net profit margins because they have wider margins to start with. And you kind of hope that wider margins also are a symptom of having really good pricing power that they can have in the first place so they can manage cost increases, or not be affected too much by them, and also increase prices as a response, as well. Or another example would be if we’re going into this slowing growth or recessionary environment, that’s the classic moat. Do they have a competitive advantage to kind of protect their business through that downturn? Or with rising rates, like I mentioned, if a company is overly levered or even worse, overly levered with a lot of short-term funding, that’s going to be a problem, if it isn’t already a problem. So, these are all key things that are going to cause a lot of dispersion in the indices. People have talked about, you know, it’s going from a stock market to a market of stocks; it’s less about beta, more about alpha here. And so that’s why we think the quality aspect is important because that really homes in on these mechanics or these components of stocks and the things that are sensitive to these economic variables and how to sidestep that or lean into other ones based on the types of companies you’re buying.
Bigda: And when you say alpha, you mean the excess return that you could potentially get in the market, is that correct?
Hetts: That’s right.
Bigda: Adam, you not only consult with clients about their portfolios, but you actually look at a database of portfolios and analyze how they are positioned. And so, I’m wondering, based on your research and your analysis, where are you seeing portfolios offsides today? And how should investors be considering adjusting them?
Hetts: Right, so the Portfolio Construction Strategy Team, we’re a global team, we’re about a third U.S., a third ex-U.S. and a third technology. That technology is building our proprietary portfolio analysis tools. We’re feeding thousands of client portfolios through those tools every year as we’re doing these consultations. So, what we’ve been seeing is, there’s that ubiquitous large-cap growth overweight – and we’re talking U.S. portfolios here – and that underweight in small and mid-cap equities. So, as we’re thinking about where to go with that, we’re not talking about grabbing a single style box. Like during the COVID lockdown, you had U.S. large growth leading the charge, and then you had the vaccine announcement and that knee-jerk reaction in the recovery environment, and then small value – the kind of opposite side of the style size map – kind of led the charge. And so, we’re not saying trade into one style box or the other today because it’s nearly impossible to get that right. Like the leadership changes between large, mid and small and value and growth have been so violent, really ever since the pandemic hit, so we’re talking about just being broader. We’re talking about moving that center of gravity from that typical U.S. large growth overweight we’re seeing more towards mid-caps, which just means a more balanced portfolio across large, mid, small, and value and growth. And then also, to Matt’s point, we’re not talking about a single sector here. I think just the nature of this environment, it doesn’t just map to growth versus value or even different types of sectors. I think it’s a shortcut to think about cyclical or defensive sectors, and we were in a recovery environment, people are talking about cyclical and more recovery-oriented sectors, which are more commonly found in the small and mid-cap stocks. That’s why small and mid is more the recovery kind of playbook. And now you’re seeing these recession headlines and then that is associated with defensive sectors. But the mouthful here is there’s a lot of cyclical sectors with secular stories.
Bigda: That is a mouthful.
Hetts: No edits on that one. But you think about cyclical sectors traditionally, things like REITs [real estate investment trusts] for battling inflation; materials and energy, which all these input costs, that’s a tailwind for those sectors, but they’re very cyclical; financials, as long-term rates are rising, it’s healthy for the financial sector; industrials, which are really well-suited for this pickup in demand as we continue to recover from the pandemic. So, there’s some straightforward cases for all these cyclical sectors that are going to be, we think, relatively resilient even in the face of a recession when you think you should go defensive. So, it goes back to being really active, being really broad and really nimble as you’re managing this downturn into the eventual recovery.
Bigda: Okay, so it sounds like not trying to be overweight in any one particular area, if it’s cyclical or defensive, value versus growth. You’ve written a lot about how investors tend to have this home bias, where they invest in the stocks in the country where they live, and I’m wondering if you’re seeing that now with both U.S. investors and non-U.S. investors? And is that a problem, to put it bluntly?
Hetts: Home bias, it’s universal. That’s been really interesting as we’ve globalized this team. It is a problem, and it isn’t because it kind of gets to the art and science of investing. The art is keeping investors in their comfort zone. So, here in the U.S., you’re seeing the S&P in the news every day, and you’re comfortable with S&P gains or losses, in a sense, and your portfolio tracking that. So, being global is diversifying that, but it might move you away from that benchmark that you’re comfortable with and the returns you’re familiar with seeing on the TV every day. The U.S. definitely has this huge home bias in the equity portfolios. A way to put it is that the average U.S. portfolio we have in our database, those client portfolios are about half weight ex-U.S. equities. They have half as much ex-U.S. equities as the typical global benchmarks, so that’s a problem. They could double their international equity weight at the expense of U.S. and just get to neutral. But then you go to a place like the UK, and the UK has a home bias, but the UK overweight is five to six times what the UK is in the benchmarks. So, it’s a drastic overweight in the UK. You see it in Australia, you see it almost everywhere, and a lot of times for good reason. It’s just something to manage and be aware of the biases that injects into a portfolio. So, the bias would be in the U.S., you’re overweight U.S. equities, then you’re more overweight large-cap growth and tech. And that’s what the U.S. does for you. If you’re overweight the UK, then you’re going to be overweight more value and more energy and more cyclicals. Not necessarily good or bad, it depends on the clients. Objectively, scientifically, it’s bad, but that’s only half the battle when it comes to managing money and managing kind of wealth in the long run.
Bigda: So, you said it depends on the clients, which I think is interesting. Can you give an example of how a certain client might benefit from that overweight to their home country and an example of when they really should consider broadening out their portfolio?
Hetts: That’s a good question. So, take for example this year. So, U.S. equities are down about 20% and some investors are capitulating, but a lot of investors are staying the course because we’re down 20% and it’s understood. Imagine if the U.S. was up 30%, and it was only emerging markets that were down 20%. Anybody who owned emerging markets is going to see that 20% and they’re a lot more likely to get rid of it. And that’s the art is, it’s harder to stay the course in what’s perceived by some clients as esoteric or some diversifying asset classes. And so, for better or worse, one of the primary goals of an investment plan is keeping clients invested for the long run. That’s probably the biggest determinant of long-term success is keeping clients invested. And there, I mean, as a CFA charter holder, running asset allocation consultations, of course, we believe in diversification, and it’s so anti-CFA to talk about the value of a home bias and the value of a concentration. But the reality is, staying invested is really one of the most important things, and that’s where you have to pick your battles. And so, that’s where it really depends on what types of clients you’re talking to, how sophisticated they are, how emotional they are and how you can find a way to keep them on path for the long run.
Peron: I think I’ve heard Adam’s team being referred to as providing behavioral alpha.
Hetts: We’ve been called worse.
Peron: And I think you have some interesting stats around that in terms of, you know, markets, what they look like five years from now after a 20% correction and providing that perspective and your counsel to stay invested, I think pays off for clients.
Hetts: Well, we mentioned 20% earlier, and history shows that a 20% drawdown, there’s usually a little more pain to come or a good bit more pain to come. But after five years, you’re positive on average, and there’s double-digit returns, on average, on the way. So, we’ve hit that 20% mark, and that kind of goes back to what I said. We’re seeing this kind of shifting not from, you know, whether if I should go to cash or not, but just how I should be getting out of cash and how I should be staying invested. So, that’s good because it is time to think in the long term and stay invested and ignore some of that short-term noise. And we’ve done some research on some of those scary headlines, like the inverting yield curve or the recession risk, the tightening cycles, and historically, markets have managed to stay positive following tightening cycles, following yield-curve inversion. So, this isn’t like any exact historical cycle we’ve ever been through for a few reasons, but there’s some good precedent to lean on there. So, I think in this environment, you know, humility is a virtue, not getting too cute with your timing, and thinking long term as you’re working through this.
Bigda: Matt, let’s pretend that you are sitting in Adam’s seat for a moment, and you have to make an argument for staying invested. Looking across the global markets, what would you say is the reason for staying invested in equities today?
Peron: Well, I think that there are a number of reasons to stay invested in equities. One is they are good inflation hedges. So, if inflation does stay stubbornly high, you want the nominal pricing power of you know, equities. They earn their revenue in nominal dollars, so you want that. I think also, you know, that equities are generally the engine of growth over long periods of time, as Adam has pointed out, so you really do want to capture that over the long term. And that equity premium is quite powerful and missing out on that, as Adam mentioned, you know, if you stay in cash, you could miss the double in equities that we’ve had over the past few years. And that is very powerful to your long-term retirement goals, etc.
Bigda: So, it sounds like investors shouldn’t try to predict whether we are entering a recession or the direction of inflation or all these other macroeconomic factors that are hanging over us today. It sounds like they should be really just focused on adjusting their portfolio and thinking about their long-term financial goals. Is that correct, Adam?
Hetts: That’s essentially it. We spend a lot of time helping investors kind of tailor and customize their portfolios and asset allocations, but assuming they’ve got the appropriate asset allocation that’s suited to their needs and long-term desires and goals, yes, essentially, it’s that. It’s not getting too cute with the timing and making sure you don’t miss the best days in the market because that’s the biggest danger to your long-term goals. And the thing to remember is that a lot of those best days can only come after the worst days. And the worst days are really the only time you want to sell. So, emotionally, we’re sort of built opposite of what our best long-term interests are as far as investing goes. So, just try to take those knee-jerk reactions with the appropriate grain of salt and just think a little bit longer term amidst all the short-term noise we’re dealing with right now.
Bigda: And these corrections can be good learning tools, right, where you figure out where maybe you are a little uncomfortable and therefore need to make some adjustments to your portfolio.
Bigda: Yes, there’s no shortage of FOMO [fear of missing out] and schadenfreude as you’re kind of watching your own portfolios and watching others kind of manage these markets, and you’re never going to get it totally right. All the professionals that spend all day every day doing these things for decades, never get it completely right all the time. So, it’s a really a valuable learning experience, going through these types of markets with so much volatility in so much unprecedented ways. It’s just something to pay attention to and know that if history is any guide, we’ll always weather through this, and staying the course will help you get through it, and just pay attention and learn along the way.
Bigda: Well, that all sounds like good advice to me. Adam, thanks so much for joining us today. To hear more from Adam, be sure to tune in to his podcast series Global Perspectives. I know Matt and I will be listening. And be sure to join us next month here when we explore the state of the U.S. consumer with our research analyst Josh Cummings.
Until then, I’m Carolyn Bigda.
Peron: I’m Matt Peron.