Bloomberg Intelligence Sep 19, 2026
With Alicia Levine, Chief Investment Officer at BNY Wealth
BNY Wealth is underweight bonds against its own benchmark, and the fixed income it still holds is emerging market debt and high yield rather than Treasuries.
The standard response to rising yields at a wealth manager is to buy longer-dated bonds and lock the income in. Alicia Levine is doing the opposite. Her client portfolios sit in five- to 10-year maturities, with real assets and infrastructure alongside them, because she does not think the Federal Reserve can get inflation back to 2% at all.
"And that is inflationary, and there is no central bank that's going to hike high enough to squeeze it out to get to 2%."
Alicia Levine, Chief Investment Officer at BNY Wealth, on Bloomberg Intelligence, decides how the bank's wealth clients are allocated and writes the house market note the anchors were reading from on air. She studied at Brown and did her graduate work in mathematics in Chicago, and she spent part of the segment explaining how a second-grade teacher in Queens got her there.
The full segment is covered here so you can skip it.
Here are the 8 takeaways that matter.
Key Takeaways
Trading around headlines is the mistake she sees most often: miss the year's 10 best days and you underperform by 5% annualized over the next 20 years
Her framing is that clients try to build wealth the way a hedge fund manager trades
No central bank can hike enough to get inflation to 2%, because reshoring and friend-shoring raise costs by design
Client money sits in five- to 10-year maturities, with real assets and infrastructure as the inflation hedge
She sees risk in anything longer-dated
A Fed hiking into oil-driven inflation, she says, "may not be that effective"
BNY Wealth is underweight bonds against its benchmark, and what it owns is the part that worked
Emerging market debt and high yield have been additive; the core bond portfolio is what struggled
Cash is not piling up the way the headlines suggest: about $8 trillion in money market funds, smaller against the S&P 500 than it was 15 years ago
The whole growth recipe she gives is equities, globally diversified, in all sizes, and "you let it run"
A math major is the degree she would pick in the age of AI, because it teaches a student to change one input and follow the output
1. Trading Is Not Wealth
Asked what BNY sees people getting wrong day to day in their retirement money, Levine named one behavior and stayed on it for the rest of the segment.
The mistake is reshuffling the allocation every time the news changes
I think the biggest mistake that we see, since we're in the wealth business, is wanting to trade the allocations or wanting to swap out all the time because of headlines, and essentially trying to pretend that building wealth is the same thing as being a hedge fund manager.
Alicia Levine
She then gave the firm's house number for what the reshuffling costs. Her comparison is the standard missed-best-days exercise, run over a 20-year horizon.
Missing the year's best five or 10 days costs 5% a year
And that is one of our messages that we always talk about, which is wealth is built over decades, and that trading actually gives you worse returns than if you did the hypothetical experiment and you missed the five best days of the year, or the 10 best days of the year — you underperformed by 5% annualized returns, going forward over the next 20 years.
Alicia Levine
2. Where Derivatives Fit
Asked whether the media is to blame for the trading impulse, Levine said no, and drew a line between two different businesses rather than between two kinds of coverage.
Hedging near-term risk is a real business; it is not the same business as building wealth
No, I don't blame the media, because there are plenty of businesses out there that are hedge funds, that are trading, that are using derivatives, trying to hedge some near-term risk.
Alicia Levine
What gets confused, on her account, is the frequency. Building wealth is not day trading and, in her words, not even annual trading.
The scary headline is the trigger, and acting on it loses every time
And I think that's the biggest — we hear scary stories, we hear tariffs, we hear war, we hear oil at 105, and you feel like you have to get out, you have to do this. And in the end, those typically, 100% of the time, tend to be mistakes.
Alicia Levine
Her example is the one where selling felt most justified.
2008 was a mistake too, because of how fast the recovery came
Look at 2008 — that was a mistake as well. When the markets started rallying, it was like a rocket to the upside.
Alicia Levine
She then named the product categories that collect money from investors who want the market with the fear taken out: buffer ETFs, which cap gains in exchange for limiting losses, and equity income ETFs that sell options to manufacture a high payout.
The products drawing the inflows are the ones built out of derivatives
So I think about the investment products that do really well, that get a lot of inflows, and you could talk about buffer ETFs, you could talk about these equity income ETFs using derivatives to generate high yields.
Alicia Levine
3. Equities, And Let It Run
Asked directly whether those products belong in a retirement account, Levine allowed them a place and then put the question back to first principles.
She grants the products a role, then asks what the account is for
So there is a place for that. But I think you just go back to the simple thing, which is: what are you trying to do? You're trying to grow your capital, end of sentence.
Alicia Levine
The recipe is equities, diversified globally across company sizes, left alone
So there's a really easy way to grow capital, and that's equities, and that's being fully diversified globally in all sizes, and you let it run.
Alicia Levine
The one input she says the saver has to supply is the date. Everything else follows from how far away retirement is and when the account stops growing capital and starts protecting it.
The only hard question is when you stop growing and start protecting
And the question you have to ask yourself is, when am I retiring, when do I think I'm retiring, and when do I have to start transitioning towards protecting those gains or something more conservative? But if you're in the growth phase, it's pretty simple.
Alicia Levine
4. Cash Is Not Piling Up
The anchors read from her latest note, which says the earnings and capital-spending backdrop is stronger than in previous tightening cycles, and that inflation-sensitive assets deserve attention. The question that followed was whether savers are too frightened to own stocks and are sitting in cash and short-dated bonds instead.
Levine said the fear is real and has been since 2020, but that the cash data does not show it.
People have been worried for five years, and the reasons keep arriving
So, I'd say people have been worried really since 2020, right? People are just worried a lot because it's been a very noisy period.
Alicia Levine
She listed what has kept them worried: geopolitical events, a fracturing world trade system, and the buildup of government debt.
The cash balance is steady rather than swollen
I'd say people are worried all the time. I wouldn't say that there's a lot of cash out there, because the cash tends to be pretty steady, right?
Alicia Levine
Asked for the size of the money market pile, she put it at $8 trillion. The anchor's point, which she agreed with, was that the absolute figure is bigger than it was 15 years ago while the figure that matters is smaller.
Measured against the S&P 500, the cash pile has shrunk
We talk about the absolute number, but as a percentage of the S&P, it's actually smaller.
Alicia Levine
What has changed, she said, is the amount of conversation telling savers not to trade and not to move to cash. One down year is not a reason to leave, because downturns are normal.
5. The $40T Debt Question
Asked whether $40 trillion of US government debt is something an individual investor can act on, Levine started by flattening the number. Round numbers get attention, she said, the way birthdays do, and the panic arrives every few years.
What she does act on is where in the Treasury curve the money sits.
The portfolios are in five- to 10-year maturities, not longer
I'd say for now, what we're doing in our client portfolios is really being in the belly of the curve, intermediate to short-term duration, five to 10 year.
Alicia Levine
Anything longer-dated carries risk she does not want
I think there's risk in any longer duration here.
Alicia Levine
Then the part that explains the rest of the allocation. The inflation the Fed is raising rates into is coming from oil, and she doubts rate rises do much about that kind of inflation.
Hiking into an oil-driven price rise may not work
There is concern that — I think the Fed hiking right now, into what is the inflation that's being caused by the increase in oil prices, may not be that effective, actually.
Alicia Levine
So the portfolios hold real assets and infrastructure alongside the short and intermediate bonds, as an inflation hedge rather than a yield play. She tied that to the structural change since COVID: production of critical goods moving back to home countries, which raises costs wherever it happens.
Reshoring is inflationary, and no central bank can out-hike it
You just had a previous conversation about that as well, because we think we're just in a higher inflationary world since COVID — the reshoring, the friend-shoring, the nationalizing of businesses for critical industries, whether it's pharmaceuticals or whether it's chips, manufacturing capacity — that's all coming back to home countries, it's happening in Europe as well.
Alicia Levine
The 2% target is out of reach of monetary policy
And that is inflationary, and there is no central bank that's going to hike high enough to squeeze it out to get to 2%.
Alicia Levine
6. When Math Happened
The anchor turned the segment personal, crediting Levine with unusual mathematical ability and asking when math happened for her. The framing offered was that math in girls is a delicate thing.
She rejected the premise in four words: "Not in my world."
Arithmetic came first and early, she said, and she has never had to think about it since. The rest came from one classroom.
A second-grade teacher in Queens taught fourth- and fifth-grade math to the whole class
And then we had a public school system, New York City public schools, second grade in Queens — our teacher decided that we all should be doing fourth and fifth grade math, and she taught it in second grade. And nobody ever complained, and no one ever said girls couldn't do it. And my cohort, girls were doing math, and there was no conversation around it, we just did it.
Alicia Levine
Asked how hard it will be for a math major to find a job in the age of AI, Levine said she would pick that major over most others, because of what it trains rather than what it certifies.
Math is a degree in changing one variable and following the result
If I change this variable, if I change this input, I'm going to get a different output — that's what math teaches you to do, it teaches you to think.
Alicia Levine
7. Underweight, Not Out
Asked whether she now holds fewer bonds, given how little total return the bond market has delivered, Levine gave the position and then the exceptions.
Underweight against the benchmark, with emerging market debt and high yield inside it
So we are technically underweight bonds given our benchmark allocation, but we do have an allocation to emerging market debt, and we do have an allocation to high yield, which has been very additive.
Alicia Levine
The trouble was in the core bond portfolio, not the riskier parts
It's been the core bond portfolio that's been more challenged than the EM debt or the high yield.
Alicia Levine
Fixed income is still in the portfolios, she said, doing a different job: not the Treasury allocation investors reach for by habit, but whatever answers the individual client's brief, which ranges from keeping the money intact to taking risk out.
Still owned, at a lower weight
So we still like fixed income, it's just not as heavily weighted.
Alicia Levine
What the client owns depends on which phase they are in
And again, it's really where you are in your life cycle — are you in the growth phase, or are you in the consolidation, and I want to keep what I have — and then we have to allocate differently for that.
Alicia Levine
8. Back In Office, No Suits
With 30 seconds left, Levine was asked whether BNY has gone to six days in the office.
BNY is back in the office
We're back in the office.
Alicia Levine
Asked whether the men are wearing suits to get there, she said no. The dress is casual for the working day, and the suits come out in the evening.
The suit has not come back to the office
No, they're not wearing suits. We're not there yet.
Alicia Levine
Bonus Insights
The market backdrop the show set before she came on
The data check ahead of the segment put the VIX at 15, which the anchors called a bull-market reading after a week that included an AI selloff and a Fed meeting. Crude had traded at 107 and 109 earlier in the week, the S&P 500 was heading for a second straight weekly decline, and the dollar was at a seven-week high.
Her infrastructure point was a reply to the previous guest
Levine's line about real assets and infrastructure refers back to the earlier segment, in which Henry McVey of KKR argued that governments are handing infrastructure to the private sector and called it a large theme. She reached the same asset class from a different direction: as a hedge against inflation she expects to persist, rather than as a private-markets allocation.
Round numbers are why the debt keeps becoming a story
On the $40 trillion figure, Levine's point was about attention rather than arithmetic. The panic arrives every few years, she said, because it is a big round number, and round numbers get noticed the way birthdays do.
Levine's bottom line is that the answer to an inflation the Fed cannot squeeze out is not cash and not long-dated Treasuries, but globally diversified equities left alone, five- to 10-year maturities, and real assets — and that most of what individual investors do to their portfolios in between costs them more than the headlines ever did.
Products, Companies & Tools Mentioned
BNY Wealth (Her firm. Its client portfolios are underweight bonds against benchmark, in five- to 10-year maturities, with emerging market debt, high yield, real assets and infrastructure around them)
Buffer ETFs and equity income ETFs (The products she says are pulling in money by using derivatives to cap losses or manufacture high yields; she allows them a place, but not as the reason an account exists)
S&P 500 (Her denominator for the cash question: about $8 trillion sits in money market funds, smaller against the index than it was 15 years ago)
The Federal Reserve (Raising rates into oil-driven inflation, which she says "may not be that effective")
Books & Resources Mentioned
BNY Wealth's market insights (The house note the anchors read from on air: earnings and capital spending stronger than in prior tightening cycles, and inflation-sensitive assets deserving attention)
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