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Today's guest is Kristian Kerr, who is the head of macro Strategy at LPL Finance. Before joining LPL, he was the Western region head of foreign exchange and macro at City Private Bank. Before that, he spent a number of years in New York as a global hedge fund manager and is also head of various strategy and trading roles at other global financial institutions. 

Kristian believes investment strategy should be both data-driven and guided by human expertise. He says that this balance creates a more dynamic, flexible, and effective investment process that aims to deliver better long-term results. He shares his views on how investors should handle the changing market.

You will want to hear this episode if you are interested in...

• Welcome to Upthinking Finance (00:00 )
• Kristian shares his process as an advisor (01:20 )
• The challenge of managing more risk, post 2020 (05:30 )
• Market correlations changing, impact on portfolio development (09:15 )
• How geopolitics impact market trends (21:20 )
• How investing has changed in the past decade (26:10 )
• What's the value of trend following strategies? (28:00 )
• How to respond to someone who thinks the financial market will end (35:35 )

Kristian Shares His Investment Process

As Head of Macro Strategy at LPL, Kristian is responsible for leading the firm’s global investment team, which includes 11 senior research members.

They meet weekly to define LPL’s overall investment strategy and provide top-down guidance for managing approximately $85 billion across separately managed accounts (SMAs) and model portfolios.

He shares that they use a hybrid investment framework that combines: Quantitative (systematic) analysis to efficiently process data, reduce bias, and ensure consistency, and Qualitative (discretionary) insight from experienced professionals to account for factors that can’t be captured by models alone.

Managing More Market Risks 

Kristian shares how different clients have different levels of awareness about risk, and how portfolio managers often need to manage risk that clients might not even realize exists.

This is especially true in today’s uncertain environment, which is much more complex than it was 10 years ago.

A few of the modern risks include that the standard 60/40 investment strategies are less reliable, the U.S. dollar is at a pivotal point based on its value, and there is financial repression from government strategies at play in the current market. 

To manage both visible and hidden risks for clients, Kristian explains that adapting happens by incorporating less correlated, alternative assets to build “all-weather” portfolios that can hold up in a wide range of market conditions.

A Diverse Portfolio

Kristian values trend-following strategies as a critical part of a diversified portfolio, especially when paired with traditional assets like stocks and bonds.

These strategies shine during extended market downturns (like in 2022), offering protection when equities are struggling.

While they may underperform during short-term market bounces, that's expected as their role is to protect during prolonged stress, not quick dips.

Kristian emphasizes using a “barbell” approach, combining growth-oriented assets with defensive strategies, and highlights the importance of building a toolkit of diversifiers (like long-volatility) to navigate different market regimes and support long-term compounding.

Connect With Kristian Kerr

• Kristian Kerr

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