Scott Chan

If you think about the year before that, people, and the year before that, I mean, for several years, people thought we were going to head into recession. Why? Because interest rates moved up over 500 basis points and there has been a lot of historical precedent around when rates have gone up so much, yet the market went up, you know, again, over 20% for the S&P. If you think about globally,

If you think about the year before that, people, and the year before that, I mean, for several years, people thought we were going to head into recession. Why? Because interest rates moved up over 500 basis points and there has been a lot of historical precedent around when rates have gone up so much, yet the market went up, you know, again, over 20% for the S&P. If you think about globally,

If you think about the year before that, people, and the year before that, I mean, for several years, people thought we were going to head into recession. Why? Because interest rates moved up over 500 basis points and there has been a lot of historical precedent around when rates have gone up so much, yet the market went up, you know, again, over 20% for the S&P. If you think about globally,

The U.S. also is likely considered probably the most attractive, you know, in terms of economic growth in comparison to, for example, China or for some of the other, Europe, certainly. And so a lot of my peers globally, they want to continue to invest in the U.S. And so the setup, the expectations, I think, for the U.S. market and global equity as being, the U.S.

The U.S. also is likely considered probably the most attractive, you know, in terms of economic growth in comparison to, for example, China or for some of the other, Europe, certainly. And so a lot of my peers globally, they want to continue to invest in the U.S. And so the setup, the expectations, I think, for the U.S. market and global equity as being, the U.S.

The U.S. also is likely considered probably the most attractive, you know, in terms of economic growth in comparison to, for example, China or for some of the other, Europe, certainly. And so a lot of my peers globally, they want to continue to invest in the U.S. And so the setup, the expectations, I think, for the U.S. market and global equity as being, the U.S.

market being a very large part of that, you know, call it 60% or so at this point, is pretty high. And the economy is robust. But the problem now that you're bumping into is after several years of really robust returns, you've got high valuations. Even if you consider some of these large cap tech names have higher profits and they're growing faster, even considering that now,

market being a very large part of that, you know, call it 60% or so at this point, is pretty high. And the economy is robust. But the problem now that you're bumping into is after several years of really robust returns, you've got high valuations. Even if you consider some of these large cap tech names have higher profits and they're growing faster, even considering that now,

market being a very large part of that, you know, call it 60% or so at this point, is pretty high. And the economy is robust. But the problem now that you're bumping into is after several years of really robust returns, you've got high valuations. Even if you consider some of these large cap tech names have higher profits and they're growing faster, even considering that now,

The valuations are on the higher end. We've had a decade of outperformance, particularly in the S&P, and we're starting to see some concentration of stock performance, of course, at the top. That's worrisome. So you can really never time the tops and bottoms of cycles, but I do think that it's becoming more likely that we're going to see underperformance here.

The valuations are on the higher end. We've had a decade of outperformance, particularly in the S&P, and we're starting to see some concentration of stock performance, of course, at the top. That's worrisome. So you can really never time the tops and bottoms of cycles, but I do think that it's becoming more likely that we're going to see underperformance here.

The valuations are on the higher end. We've had a decade of outperformance, particularly in the S&P, and we're starting to see some concentration of stock performance, of course, at the top. That's worrisome. So you can really never time the tops and bottoms of cycles, but I do think that it's becoming more likely that we're going to see underperformance here.

Number two, I think there are many areas that with a higher probability, we're gonna see them outperform the equity markets. And I don't think we've been able to say that over the last two or three years, right? And these areas are gonna most likely provide low risk and diversify the portfolio of CalSTRS. And so what are these areas?

Number two, I think there are many areas that with a higher probability, we're gonna see them outperform the equity markets. And I don't think we've been able to say that over the last two or three years, right? And these areas are gonna most likely provide low risk and diversify the portfolio of CalSTRS. And so what are these areas?

Number two, I think there are many areas that with a higher probability, we're gonna see them outperform the equity markets. And I don't think we've been able to say that over the last two or three years, right? And these areas are gonna most likely provide low risk and diversify the portfolio of CalSTRS. And so what are these areas?

Infrastructure and energy transition, equity on the private side. I think that's gonna be robust and remain robust. There's certain areas of private credit that I think are going to generate more returns at a lower risk profile. And structurally, I think these premiums are going to be higher because there's going to continue to exist a supply and demand gap, the financing of that.

Infrastructure and energy transition, equity on the private side. I think that's gonna be robust and remain robust. There's certain areas of private credit that I think are going to generate more returns at a lower risk profile. And structurally, I think these premiums are going to be higher because there's going to continue to exist a supply and demand gap, the financing of that.

Infrastructure and energy transition, equity on the private side. I think that's gonna be robust and remain robust. There's certain areas of private credit that I think are going to generate more returns at a lower risk profile. And structurally, I think these premiums are going to be higher because there's going to continue to exist a supply and demand gap, the financing of that.

So these are areas like asset backed, infrastructure debt, energy transition debt. I think those are areas. And if you think about the opposite of the S&P and the stock markets, real estate has been down two years in a row, and it's been down very, very significantly. They were the first to react to this pricing adjustment of the rise in interest rates over 5%.

So these are areas like asset backed, infrastructure debt, energy transition debt. I think those are areas. And if you think about the opposite of the S&P and the stock markets, real estate has been down two years in a row, and it's been down very, very significantly. They were the first to react to this pricing adjustment of the rise in interest rates over 5%.