Navigating Market Trends: Private Equity, Election Years, and Concentration in US Equities

In this episode of Tower Talk, we delve into various market topics, including private equity, election year impacts, and US equity concentration.
We discuss the liquidity crisis in private equity (yes, there is a liquidity crunch) with large funds facing challenges due to lack of exits.
The conversation shifts to the historical trend of how markets perform during US election years.
Finally, we highlight the significant concentration of the US in world equity markets and then further concentration within the S&P 500 and its risks.
#investingstrategies #usmarket #privateequity #uselection
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Private Equity (00:01:02) Discussion on challenges faced by pension funds and endowments, illiquidity, overvaluation, and potential impact on investment portfolios.
Election Year Impact (00:04:05) Analysis of the historical market performance during US election years.
Concentration in US Equities (00:05:06) Discussion on the substantial representation of the US market in the global investable universe, significant concentration of top companies in the S&P 500, and concerns about lack of diversification and single-name risk.
Stock Valuations and Investment Strategy (00:09:33) Examination of the high price-to-earnings multiples of top companies, and a potential market rotation.
Show notes:
FTSE All World Index - research.ftserussell.com/Anal...
S&P 500 Returns during US Elections - advisor.morganstanley.com/the...