Morgan Stanley's Mike Wilson Talks Gold, Markets

Summary

Podcast Summary: Bloomberg Talks – "Morgan Stanley's Mike Wilson Talks Gold, Markets"

Date: August 14, 2026
Host: Bloomberg (Scarlet Fu & Tom Keene)
Guest: Mike Wilson, Chief US Equity Strategist and CIO, Morgan Stanley

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Overview

In this episode, Bloomberg's Scarlet Fu and Tom Keene are joined by Mike Wilson of Morgan Stanley to discuss current market strategies, the durability of the ongoing bull market, defensive investing approaches, the role of gold and alternatives in portfolios, and practical advice for both institutional and retail investors. Wilson offers candid insights into personal finance, rebalancing strategy, and adapting to the new realities of market correlation and inflation defense.

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Key Discussion Points & Insights

1. Market Resilience and Capex Surprises

• Wilson reflects on recent market performance:
  • Despite correctly forecasting an earnings recovery, he admits the team "underestimated the strength of it" and the "durability of the capex" investment surge.
  • Quote: “Even we underestimated the power of it, but directionally I think we were right... where we've been surprised is probably the durability of the capex and just how much that has accelerated.” (01:34)

2. 2022: The Double-Edged Market Downturn

• Scarlet Fu and Wilson discuss the shock of 2022:
  • Both stocks and bonds declined simultaneously—a rare occurrence that rattled investors.
  • Wilson advises against emotional reactions: He champions dollar-cost averaging and diversification for staying invested through volatility.
  • Quote: “Chasing stocks is as damaging as selling stocks at the bottom, in my view.” (03:13)
  • Staying invested “worked out for folks who stayed fully invested.” (03:35)

3. Defensive Strategies and the Role of Alternatives

• Closer correlation between asset classes:
  • Wilson warns that traditional stock-bond diversification is less effective now.
  • He advocates considering other defenses: gold, potentially even bitcoin, and reducing duration on fixed income.
  • Quote: “These asset classes are now more closely correlated... you need to do other things... We've been a very big advocate of gold... as a defensive asset.” (04:09-04:20)

4. Gold as an Inflation Hedge and Portfolio Diversifier

• Gold’s Bull Market & Commodity Rotation:
  • Gold has been in a bull market for 25 years, and 2024 saw a broader commodity rotation.
  • Wilson notes investors’ search for assets “not stocks but commodity-like to offset... risk.” (04:52-05:25)
  • Quote: “Gold has been in a bull market for 25 years... people kind of woke up to this idea more recently at the beginning of the year.” (04:52)

5. Factor Investing and Retail Investor Behavior

• Retail investors get credit:
  • Wilson defends the wisdom of retail investors through crises, observing adaptive portfolio shifts corresponding to macro changes (e.g., moving from bonds to stocks post-Covid).
  • Advocates for gold, alternatives, and antifragile assets in portfolio construction.
  • Quote: “The retail investor I think has navigated the last 15 years extremely well.” (05:56)

6. Rebalancing and Avoiding Overconcentration

• Wilson on personal investing:
  • While he is more tactical than most, his general advice is systematic: have a plan and rebalance.
  • Warns of “unbalanced portfolios, not just in equities, but in certain equities” (i.e., overconcentration, particularly after a long bull market).
  • Quote: “What I see out there right now is a lot of unbalanced portfolios, not just in equities, but in certain equities. Nobody wants to pay taxes, and I hear this all the time.” (09:16)

7. The Value of Cash and Mid-Duration Bonds

• Current opportunities:
  • Wilson points out that real returns in fixed income are now attractive for the first time in years.
  • Acceptable to hold cash or mid-duration bonds as defensive assets; getting paid for cash is a “biggest change since... Covid.”
  • “Cash is a good asset... infrastructure-type bonds is a good defensive asset. Certain equities are a good defensive asset.” (09:32-09:52)
  • Managing “large cap growth” overconcentration is key; rebalancing and taking profits is not “a sin.”

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Memorable Quotes & Moments

• On misjudging market strength:

  • "We probably were the first ones to talk about this earnings recovery and even we underestimated the strength of it." (01:34 – Mike Wilson)

• On 2022’s twin hit to portfolios:

  • "Stocks and bonds went down for the first time in really our lifetime and... there was no hedge." (02:33 – Mike Wilson)

• On defensive strategies:

  • “We've been a very big advocate of gold… as a defensive asset.” (04:18 – Mike Wilson)

• On retail investor prudence:

  • "I would say the average retail person has... done a really good job of diversifying their portfolio away from things that are leveraging anti fragile to inflation." (06:21 – Mike Wilson)

• On the need to rebalance:

  • "That's the one thing I see out there right now, and that's what ten-year bull markets do – they get you unbalanced." (10:40 – Mike Wilson)

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Timestamps for Key Segments

| Timestamp | Segment | |------------|----------------------------------------------------------| | 01:22 | Wilson on market recovery and underestimated capex surge | | 02:33 | 2022: Stocks & bonds both fall – implications | | 03:13 | On staying invested and dollar-cost averaging | | 04:09 | Defensive asset classes and role of gold | | 04:52 | Commodity rotation: gold, energy, semi stocks | | 05:56 | The rise of factor investing and retail wisdom | | 08:44 | Wilson’s personal investing & tactical approach | | 09:32 | Role of cash and mid-duration bonds as defense | | 10:38 | Rebalancing, overconcentration hazard |

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Actionable Takeaways & Final Advice

• Embrace diversified portfolios: Avoid chasing tops or selling at the bottom. Dollar-cost averaging benefits long-term investors, even through volatile years.
• Adjust for new regime: Traditional stock/bond diversification may lack its former defensive punch. Alternatives—especially gold—have a place as inflation hedges.
• Rebalance regularly: Long bull markets naturally breed portfolio imbalance; rebalancing (even at a tax cost) is self-care for risk management.
• Appreciate retail insight: Retail investors demonstrated adaptive diversification through crises; their behaviors offer lessons.
• Accept cash and quality bonds: With positive real returns, fixed income and cash are now viable, defensive assets.

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Transcript

[Barry Ritholtz]

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[Tom Keene]

Bloomberg Audio Studios, podcasts, radio news,

[Scarlet Fu]

Bloomberg money from New York City. Scarlet Fu and Tonki, thank you so much for being with us today. I mean this is what it's about folks. We get somebody in really, really quite good Scarlet and they write a seven page, really, really detailed paper. But what's it mean about my non retirement?

[Tom Keene]

What does it mean for the stocks that you have portfolio? Forget the fixed income or the bitcoin

[Scarlet Fu]

in my portfolio, Bitcoin, there's none in my fractional bitcoin, I'm in triple leveraged, all cash, that's a different story. We are honored to bring you Mike Wilson, pride of University of Michigan, chief US Equity strategist and investment officer of small shop Morgan Stanley this morning. How you doing? How's your year been?

[Mike Wilson]

Doing great. Been. It's a bull market, you know, summer's been pretty good to me. And do you feel like, you do

[Scarlet Fu]

feel like the market, you've got the market right if you underestimated its dur.

[Mike Wilson]

No, I think we probably were the first ones to talk about this earnings recovery and even we underestimated the strength of it. So yes, we did underestimate the power of it, but directionally I think we were right on that. I think where we've been surprised is probably the durability of the capex and just, just how much that has accelerated and how much, quite frankly, how much the market has been willing to absorb right on the issuance. The reason credit.

[Scarlet Fu]

Well, the reason you've been good at that is Jim Carrey and it's got nothing to do with, with the equity side of the shop. Bring up the chart right now. This is the emotion many of you have forgotten this. Stocks, you can go down in stocks. It's a shock. Now this chart ends in 2022. But there's XPX. It's wonderful, great, wonderful Covid and all that. And then there's a big rollover in 2021, 22. Where are you brave enough to catch the falling knife? When the market rolls over like that and my personal finance is troubled, how do I get back into the market? How at the margin do you see the sweat of that chart?

[Mike Wilson]

Well, the really challenging thing of 2022 as you know for retirees was that stocks and bonds went down for the first time in really our lifetime and that so there was no hedge. So even though the decline in equities wasn't as severe as it was in 08 or in 01 or 02, your 6040 portfolio was down the same. So that was a change. And that I think that was one of the things that made investors apprehensive to step in. It was like holy smokes, I'm getting hit on both my defensive stuff and my offensive part of my portfolio. So I think people froze up. Now our job is to remind people that there's value at some point. And I would say we navigated the 2021 top extremely well. And the 22 downturn, we probably overstayed our welcome a bit in 23 and got back on board in 24 under the story that we're telling now. But like, I mean as an, as a, as a person who has their money in the market for retirement or long term investor, you really should avoid being sh and out on both the top and the bottom. So in other words, chasing stocks is as damaging as selling stocks at the bottom in my view. So that's why we like dollar cost averaging. That's how we do like still like diversified portfolios. 22 is a challenge on that ended up working out for folks who stayed fully invested.

[Tom Keene]

And for those who stay fully invested, they their faith in equities has been restored. Maybe for bonds, not as much given that the performance has not been as great. Is there a way to get all your defense of your bond like exposure within equities? I've heard some people talk about the idea of swearing off fixed income completely and perhaps owning insurance companies as proxies for bonds. You get the price appreciation, you get the dividend. It's kind of like a win win.

[Scarlet Fu]

Yeah.

[Mike Wilson]

Well what I would say is that these asset classes are now more closely correlated. So they're just not going to offer that natural diversification benefit that they have historically. So that means you need to do other things. So there are other types of investments you were mentioning earlier, like gold or, or maybe even bitcoin or some of these things that can defend against inflation. So we, we, we've been a very big advocate of gold and not so much as a yielding instrument, but as a defensive asset. That doesn't mean you abandon fixed income, but it does mean you reduce your Duration. So there are things you can do within your fixed income portfolio to make it more valuable, still provide some diversification benefit without taking too much risk on the duration side.

[Tom Keene]

So when you talk about gold, gold was acting like a meme stock at the beginning of this year. I mean, was that just kind of a unique one off period or can we return to things like that?

[Mike Wilson]

Well, I would say that gold has been in a bull market for 25 years. I mean, people kind of woke up to this idea more recently at the beginning of the year. And this probably is a good place to kind of, kind of gravitate to for the rest of the discussion. For this year, I would say we've had basically one big commodity rotation. So coming into this year, if you remember, at the end of last year, the Fed started printing money again with this reserve management program. And that led directly to gold and silver stocks taking off. Then we went into rare earths and metal stocks, then energy stocks and then semiconductors. Now what do all those have in common? They're all commodities. Okay. So it's kind of interesting to me that that's what's been going on. And that may be exactly what people are doing. They're looking for things that are not stocks but commodity, like to offset, you know, the risk they have in their portfolio. With equity like risk in Michigan there

[Scarlet Fu]

is Stephen Ross and there is this idea of arbitrage pricing theory. I want you to bring it over to somebody's retirement where we talk about factor based investing, discuss momentum and the other factors there that lead to successful personal finance.

[Mike Wilson]

You know, first of all, we have to understand that people, you know, the retail investor gets a bad rap. And the retail investor I think has navigated the last 15 years extremely well. Now this is a good lead into your question, which is in the, in the gfc, when the Fed started printing money the first time, all the smart people were like, oh, this is a disaster, it's going to be inflationary. And what did the retail person do? They bought bonds because like we don't see inflation. And by the way, this is just filling in holes. It's a different type of qe. Then when Covid happened, they sold their bonds and they bought stocks because they realized this actually, this kind of QE where you actually print money and send checks out to people is extremely inflationary. So I would say the average retail person has essentially diversified, has done a really good job of diversifying their portfolio away from things that are leveraging anti fragile to inflation. And so that's why We've been doing the same thing in our recommendations. You know, whether it's gold, whether it's alternative investments, things that can provide balance to the portfolio without having pure equity like risk.

[Scarlet Fu]

I got eight ways to go here when we come back. I mean, it's really interesting.

[Tom Keene]

Well, we want to get his take too on how he manages his personal finances.

[Scarlet Fu]

We're going to have to do that. I mean, Mike Wilson with us with Morgan Stanley. And just all sorts of ways here to go from the day to day battle of strategy over to how do you not screw up retirement planning? It's that simple.

[Tom Keene]

Mike Wilson will be staying with us. He's with Morgan Stanley. Also later on on Bloomberg Money, we'll tell you why one city is still living the American dream when it comes to affordable housing. There is stuff available for first time homebuyers, believe it or not. It's not here though. It's not New York, it's not in California. This is Bloomberg Money. Somewhere in the middle.

[Scarlet Fu]

There's a lot of that. It's a lot booming.

[Tom Keene]

Next week on Leaders with me, Francine Lacqua. I speak with Harvard Business School Professor Linda Hill about what CEOs need to know to be successful.

[Barry Ritholtz]

It really is not about them. It is about the organization, about how

[Tom Keene]

to lead in the age of AI.

[Barry Ritholtz]

That requires a lot of confidence and

[Tom Keene]

why great leaders embrace conflict.

[Barry Ritholtz]

You need to amplify difference.

[Tom Keene]

Listen and watch Leaders the podcast with me, Francine Lacqua on Bloomberg TV or wherever you get your podcasts.

[Scarlet Fu]

Bloomberg Money. We say good morning and a good afternoon and onto the weekend for you. Scarlet Fu and Tom Keene. Major shout out Ellen Bees and Zentner over at Morgan Stanley. Top 39 economists under 39.

[Tom Keene]

Oh, I love that.

[Scarlet Fu]

Some award she won today. Mike Wilson did well.

[Tom Keene]

Her colleague Mike Wilson is here with us. He's the chief US Equity strategist and CIO over at Morgan Stanley. And Mike, we want to ask you about how you invest your money. You talked a little bit about how when you look for some defensive qualities, perhaps you go into gold, for instance, or look at other alternatives. Is that how you, you know, diversify your portfolio? Are you going into gold? What do you do to make sure that you don't, you're not overly loaded up on equities.

[Mike Wilson]

Yeah, well, I'm probably not a great example. I'm a, you know, I'm much more tactical than I would recommend most individual investors be. Like, I'll trade in and out. I'll even short things as my defensive hedge. But that's not practical for most people. Okay. So I would recommend that we recommend for most retail investors or even institutional investors, endowments is you have to have a plan, okay. And then what people don't do a good job of is rebalancing. So what I worry, not worry about so much, but I think what I see out there right now is a lot of unbalanced portfolios, not just in equities, but in certain equities. Okay.

[Tom Keene]

And that's tilted towards something.

[Mike Wilson]

Yeah, there's just. You got too much exposure to single assets because nobody wants to pay taxes. And I hear this all the time.

[Scarlet Fu]

What do you say to the people that go, I'm afraid of Mike Wilson's world. I'm loaded to the boat in cash. Should they be looking at two and three year Jim Carrera like money?

[Mike Wilson]

Well, look, I mean, everybody should have some cash. And you're getting paid for your cash. Now the biggest change since, since really, Covid, quite frankly, is that you're getting a positive real return now on your fixed income. So I'm not as bearish on fixed income nearly as we were 10 years ago. I mean, particularly for things that are three or four years in, you're getting a real return. That's quite respectable. Now everybody has their own, like, everybody has their own risk tolerance. Okay. Some people like to hold 30% cash, some people like to hold 5% cash, whatever that number is, but you're getting paid for it now. So cash is a good asset. Mid tier sort of duration bonds is a good asset infrastructure type bonds is a good defensive asset. Certain equities are a good defensive asset, whether it be utilities or maybe staples and things like that. So there are many things you can do from a stylistic standpoint that you can protect yourself. Once again, what I think people have loaded up on now is, you know, large cap growth stocks, and those have been great, and that's why they want to continue to own those. But just understand it, you're unbalanced, okay? So you better make sure you're going to be right for the next three or four or five years. And by the way, taking profits and paying yourself and paying Uncle Sam is not, is not a sin. You can do that. It allows you to sleep at night.

[Tom Keene]

And now's the time to do that to, to rebalance.

[Mike Wilson]

If you're on, if you're on balance. Now, some people, if you're not on balance, then you're fine. But that's the one thing I see out there right now, and that's what 10 year bull markets do they get you unbalanced?

[Tom Keene]

Mike Wilson of Morgan Stanley, thank you so much. Pleasure with you.

[Barry Ritholtz]

Hi, I'm Barry Ritholtz inviting you to join me for the Masters in Business podcast. Every week we bring you conversations with the people who shape markets, investing and business. I speak with CEOs, Nobel laureates, market innovators, and legendary investors. Whether you own stocks, bonds, real estate, commodities, even crypto, these are discussions you absolutely need to hear. Subscribe to the Masters in Business podcast on Apple, Spotify, or anywhere you listen to.