Mel Lagomasino on Bloomberg: How to Prepare for a Paradigm Shift in the Markets

On Wednesday, May 18, the S&P 500 suffered its largest drop in nearly two years, with the tech-heavy Nasdaq 100 falling even more, as concerns about earnings heighten investors’ anxieties. To help investors gain perspective on this year’s volatile market, Bloomberg turned to WE Family Offices CEO and Managing Partner Mel Lagomasino for insight.

“I think we are going through a paradigm shift,” Lagomasino tells Bloomberg Host Ed Ludlow. “I think the markets are getting used to the fact that the very drivers that drove this fantastic investment environment for the last ten years are not going to be there anymore.”

Low inflation, low interest rates, globalization and benign geopolitical markets are some of the factors that Lagomasino believes helped lead to the great market growth over the past decade. However, the biggest component that she believes is influencing the current psychology of the markets is inflation.

“Once inflation starts, it’s really hard to get it under control,” she explains. “We really have been blessed with this unbelievable investment climate over the last ten years and I think people are trying to figure out how we’re going to bring down inflation.”

Now, as the world evolves away from past drivers, investors and markets are trying to figure out what the new normal will look like. However, even with inflation and the current downturn, Lagomasino says there are still opportunities for smart investors.

“I think a lot of the things that are worrying the corporates include supply chain issues, lower profit margins, inflation, etc. How are you going to solve it? You’re going to solve it through technology. So, I think the name of the game is going to be productivity and what’s going to drive productivity is technology. I think there’s a tremendous amount of opportunity right now,” says Lagomasino.

In addition to technology, Lagomasino also sees promise in healthcare, cybersecurity, artificial intelligence and private markets.

“I think you have to play it across the equity spectrum. You have to play it in venture. You have to play it in growth. You have to play it in the private and public markets. So, you have to play it across the board,” she says.