Need to Know: Just turned 50? Here’s where Howard Marks suggests investing for the next 10 years.

Those rate-cutting hopes set off some big gains last week. Stay tuned.

Switching gears, we return to the Global Financial Leaders’ Investment Summit in Hong Kong that offered more big finance names on Wednesday.

Sitting on a panel alongside CEOs from investment management firms Neuberger Berman and GCM Grosvenor, was Howard Marks, co-founder of Oaktree Capital, who earns the call of the day as he answered this question: Where would he put investing dollars to work for the next 10 years if he had just turned 50?

“You can get very good returns with a high degree of certainty in credit,” says Marks, who adds a bit more. “The bedrock for every portfolio should always be equities. In the long run you want to invest in the global economy and performance of leading global corporations, you should never get away from that.”

Marks didn’t get into exactly where Gen-Xers can find compelling stocks, offering more advice on the credit side, as he drew from a recent letter to shareholders that hammered home that asset class’s importance right now.

He said credit simply needs to be made a bigger part of portfolios, after a “sea change” that halted a four-decade decline in interest rates.

“I don’t think this is the time to invest in credit, I think this is a time to invest in credit,” Marks said, as he noted that anyone who came into the business since 1980 has only seen interest rates fall or ultra low rates, and that has been great for some strategies.

“We have had a lot of popular asset strategies which consist of buying assets with borrowed money. You have to have something wrong with you not to do well, but my essential message is that’s over,” he said.

“The key is today you can get equity returns from credit and that changes a lot. Twenty-one months ago high-yield bonds yielded 4%, today they yield over 9%…9% plus change everything,” said Marks. And investors should expect fed funds rates to come down some, but not stabilize at 0.5% such as in 2009 to 2021, he said.

Marks added that that 9%-plus is the “lowest aspiring of all of our strategies,” and investors who can lock their money for a few years in private credit can earn double-digit returns.

Ming Mei, co-founder and CEO at Singapore-based investment manager GLP, said his firm is “investing in things that won’t change in next 20 to 30 years,” such as population, consumption, AI and energy transition.

Finally, some more straight-stock advice came from George H. Walker, chairman and CEO of Neuberger Berman.

But Walker said investors should put the bulk of that money in “a high-quality portfolio of small and midcap companies that are profitable, have low leverage and solid market positions. The steady Eddies which are unloved right now have a good shot at delivering a solid, diversifying portfolio over a 10-year period.”

Last word goes to Marks. “Read, be exposed to the media, talk to people, understand what’s generally going on and you can get a sense for whether markets are precarious or propitious,” he said. Marks also said it was not worth trying to guess if a recession was coming, as one is always looming. “Emphasis in our business in the short run is really excessive and immaterial.”

The markets

Stock futures
ES00,
+0.07%

NQ00,
+0.02%
are flat, with the 10-year Treasury yield
BX:TMUBMUSD10Y
up just a bit. Oil prices
CL.1,
-1.15%
is extending Tuesday’s slump and the dollar
DXY
remains higher. In Europe, a warning on U.S. commercial real estate has pummeled one German bank’s shares.

The buzz

Powell will deliver remarks at 9:15 a.m., with a few others as well — Fed Vice Chair for Supervision Michael Barr at 2 p.m. and Fed Vice Chair Philip Jefferson at 4:45 p.m. Wholesale inventories are due at 10 a.m. Data showed mortgage rates falling by the most in a year amid signs of a faltering economy.

Reporting ahead of the market open, Under Armour shares
UAA,
+1.55%
climbed 5% after the sports leisurewear maker topped estimates. EVgo stock
EVGO,
+0.44%
is up 16% after the EV charger’s revenue beat estimates and reported narrower losses. Warner Bros. Discovery
WBD,
+1.40%
stock is down after the streaming company’s wider-than-forecast loss. Disney
DIS,
+0.68%,
Take-Two
TTWO,
+1.48%
and MGM Resorts
MGM,
-0.03%
are in the spotlight for later.

And Take-Two shares are up 8% on a report it may announce a new Grand Theft Auto game possibly this week.

Among companies reporting late Tuesday, Upwork
UPWK,
+6.13%
is up 18% after the freelancing platform’s big earnings beat, while Rivian Automotive
RIVN,
+1.40%
rose after the EV maker narrowed its loss, and ended an exclusive deal with Amazon. GoPro
GPRO,
-2.19%
got a boost from forecast-beating results.

Elsewhere, Sleep Number shares
SNBR,
-1.41%
are tanking after the mattress maker swung to a surprise loss and gave a gloomy forecast. And trading app Robinhood Markets
HOOD,
+1.77%
slid 9% after a revenue miss.

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The chart

The chart of the day comes from ETF and technical strategist @Todd_Sohn, who says megacap stocks are even more mega now, h/t to Patrick Dunuwila of The Chart Report for spotting:

“One way to visualize this is by looking at the Equal-Weight S&P 500 vs. the S&P 500 (red line). It closed at a three-year low [Tuesday] despite the recent rebound in the broader market,” said Dunuwila, noting that Sohn points out the five biggest stocks — Apple, Microsoft, Amazon, Nvidia and Alphabet, have never carried this much weight at 25% of the index.

“In other words, the top 1% of the S&P 500 is responsible for a quarter of its performance. This is a tailwind for the S&P 500 as long as the top five outperform, but the index has never been more dependent on its star players,” he said.

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

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