S6E1: Economic Decision-Making 101 w/ Yung-Yu Ma
33m | Jan 26, 2024Welcome to Season Six of the Eccles Business Buzz podcast. We are so glad to have you back as we kick off another series of great conversations with our Eccles Community. This season, we are continuing our discussion of equity, diversity, inclusion, and empathy by focusing on economic inclusion.
A key part of building an economically inclusive experience for ourselves and others is understanding what is actually happening in the economy. We all hear economic terms and forecasts in the news, but do we really know what they mean and how they should impact our decisions? Here to help dispel some of the mystery is Yung-Yu Ma.
Yung-Yu is Chief Investment Officer at BMO Wealth Management in the U.S. He joined the organization in 2016, bringing a dynamic combination of academic achievements and industry experience to the Investment Strategy team. Yung-Yu is also an Eccles alum, earning his PhD here in Finance.
He kicks off season six with host Frances Johnson by helping us understand the economy. He’ll touch on inflation, interest rates, navigating the job market, and how to stay informed while not becoming overwhelmed by it all.
And if you’d like to hear even more from Yung-Yu, join us for our next Eccles Alumni Network Forum on Thursday, February 1st, from noon to 1 p.m. Yung-Yu will be here on campus in conversation with Adam Looney, executive director of the Marriner S. Eccles Institute to discuss the 2024 Market and Economic Outlook and considerations amidst global tensions, political choices, and the year ahead.
Register to attend the event in person or via live stream today!
Eccles Business Buzz is a production of the David Eccles School of Business and is produced by University FM.
Episode Quotes:
The value of experience
[12:31] One thing that I would always coach students about is, early on in your career, by far, what matters is the experience you get in a particular job. Whether or not you get an extra few thousand dollars or whether your salary is a little bit more or a little bit less is not going to impact your long-term trajectory. But in those early years in your career, having a good mentor, building a good foundation, and learning a lot of skills and knowledge can then benefit you later in your career when you do actually get into the higher-earning years. Having that skill set, that knowledge that you built up early in your career, is going to be tremendously valuable.
The importance of investing on yourself
[21:25] I think that daily action, or consistent action, in terms of building out one's knowledge and skill set, or reading up on topics that could be beneficial to them, or learning skills—whether it's presentation or communication skills or technical skills, any of the above, depending on what fits with their interests and career trajectory—that is, first and foremost, the investment that people should be thinking about when thinking about investments.
What’s the advantage of consistent investing?
[18:15] I think for most investors, it doesn't pay or it's not favorable to try to make short-term, small changes. What's the Fed doing this month versus what it might do in two months? The big thing is really keeping a consistent investment program and being aware of the times. When there might be bigger events taking place.
When is a good time to invest and where is a good place to invest?
[21:53] How do I look for investments or things we recommend to clients? It can take a few different flavors, but certainly investing in equity markets overall, and that refers to stocks, whether it's in the U.S. or internationally. One favorable aspect of the structure of investing in stocks is that when you take on risk, the stocks in the marketplace are priced in a way that should benefit you over time for taking on the risk of ownership. Now, that doesn't mean in any given year, stock, or investment, it can't turn out unfavorably. It certainly can. Everybody knows that there's risk involved, but the reason that people still invest in the stock market, in companies, in mutual funds, or whatever vehicles is because, over time, there's a risk premium that plays in your favor. So you should benefit over time by investing in the equity markets, or even the fixed-income markets, and investing in bonds.
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