Josh Brown on the next five years in markets: ‘You actually can earn yield.’

As MarketWatch turns 25, we wanted to know what top investing minds think we will be covering for the next five years. So we turned to the Reformed Broker and things got a little crazy. 

For years, Josh Brown has been one of MarketWatch’s favorite market commentators and personalities. We knew him before he was a big shot CNBC regular and CEO of Ritholtz Wealth Management. He blogged a lot on his web site, The Reformed Broker, that he started in 2008, and found a devoted audience that wanted to hear his blunt and straightforward views on Wall Street, books he was reading, even his music preferences. 

By early 2020, MarketWatch was writing about Brown’s “budding media empire,” which included 1 million twitter followers, blogs that generated 1.7 million page views monthly, and a YouTube channel with more than 20,000 subscribers. 

As MarketWatch turns 25, we asked Brown what he thought we would be covering in the next five years. Here are his lightly edited comments:

What do you think you’ll be reading in MarketWatch in the next five years? 

Brown:  I think on MarketWatch in the next five years I will be reading a lot about inflation and then eventually disinflation and then maybe deflation. Hopefully not. But I do think probably a lot of what will be driving trends in the market will have to do with interest rates and macroeconomic concerns. It’s always been that way, but it seems even more extreme now. 

What opportunities do you see today that you think might be more clear in the next five years? 

Brown: It’s pretty obvious that large corporations and governments will mostly address the labor shortage by putting in software and robots. So I think anything that has to do with automation is a pretty safe bet over the next 5 to 10 years. That’s probably how we’re going to in part solve inflation. We’re going to drive the cost of doing business down via automation. It’s not part of the future. It’s the present. It’s already happening. 

What do you fear that you’ll be reading about in MarketWatch in the next five years? 

Brown: I really hope that no one’s reading about any personal scandals of mine in the next five years at MarketWatch. In fact, I think about it every day. 

What opportunities do you see today in the financial markets that might be more clear in five years? 

The 40% of a classical 60/40 portfolio now has a bigger role other than just stabilization. Like you actually can earn yield. It’s not yet a positive real yield because inflation is so high, but it’s nice for it not to be zero. So one really great idea is to go back to basics. And when you’re constructing a portfolio, don’t just think about return on investment, but think about return of investment. Being able to buy high quality muni bonds and treasuries right now, at the current rates, I think it will look like a gift sometime in the near future. 

Last question. What do you fear that you’ll be reading about financial markets and investors in the next five years? 

Brown: I’m not a fearful person. We will go through good times. This is the worst year since 1970 for an investor with any kind of portfolio. You have a full-scale collapse in fixed income right at the moment when you needed it because stocks have been collapsing and the high of the year was January 1st. Like, this is as bad as it gets. So we’ll make it. We’ll do this again in 2023. There will be a whole other list of things that could go wrong. But overall, I don’t invest as though I’ll be the last investor. Someone will come later. They’ll take risk, too. It’s just an ebb and flow of uncertainty. Right now. It feels like there’s a lot of uncertainty with good reason. Those aren’t the times to be most nervous. The times to be most nervous is when everyone is completely certain of what they’re doing. So we’re not there now. And that’s the good news.

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