Rich Habits Podcast Episode 161: “Goldman Sachs on How To Build a Modern Portfolio”

Date: March 16, 2026
Hosts: Austin Hankwitz & Robert Croak
Guest: Alexandra Wilson Elizondo, Global Co-Head of Multi Asset Solutions, Goldman Sachs Asset Management

Episode Overview

In this episode, Austin and Robert are joined by Alexandra Wilson Elizondo from Goldman Sachs Asset Management for an expert breakdown of today’s evolving portfolio construction landscape. The conversation dives deep into the rise of model portfolios, current macroeconomic challenges, the role of diversification, and actionable strategies for retail investors coping with a world marked by inflation, geopolitical tension, and technological disruption—especially from AI.

Key Discussion Points and Insights

The Modern Portfolio Revolution: Total Portfolio Solutions

[01:50 - 06:18]

• Why Portfolios Are Changing:
  Rapid shifts in markets, tech, and policy have driven a move away from piecemeal, manually-built portfolios toward “total portfolio solutions”—institutional-quality frameworks blending equities, fixed income, alternatives, and private markets.
• Alexandra: “A portfolio has to be better than the sum of its parts...it's really important to have a portfolio that's looking at the totality of risks that are coming from the different elements so that you're not overlapping on something.” [04:09]

What Is a Model Portfolio?

[06:18 - 08:13]

• Definition and Customization:
  Model portfolios allow advisors to leverage institutional expertise and focus on their core practice. They can be customized along risk profiles, tax considerations, market sector exposure (like AI), and liquidity needs.
• Alexandra: “It’s not one size fits all. Hey, copy and paste. It can be very much customized to the client base. But it’s a starting point, an institutional framework.” [06:42]

Why Advisors Are Embracing Model Portfolios

[08:13 - 10:07]

• Solving Complexity & Risk:
  Outsourcing portfolio construction enables advisors to manage risk, handle evolving markets (inflation, geopolitics), and address regulatory changes, while still focusing on client relationships and practice growth.
• Avoiding Concentration Risk:
  “You really don’t want 5% of your portfolio [to] determine 95% of your performance.” [08:26]
• Active Risk Management:
  Model portfolios now incorporate outcome-oriented vehicles, helping advisors manage through volatility without reacting to every market headline.

Macro Environment: Reflation, Volatility, and Risks

[10:30 - 13:56]

• Resilient but Prudent:
  Economic data shows global growth (esp. Europe, Japan, Korea, China) with a reflationary backdrop, but rising risks from labor market normalization and credit quality in the private sector.
• IRAN as a Case Study:
  Recent geopolitical shocks (e.g., Iran) can quickly impact consumer sentiment and discretionary spend via higher oil prices.
• Alexandra: “Our view is that this should be short lived…we’re talking about Weeks and not multiple, multiple months. But the situation is incredibly fluid.” [12:43]
• Fed & Inflation:
  Markets have been expecting rate cuts as inflation trends lower, but sudden geopolitical risks can shift this dynamic fast.

How to Track What Moves Markets

[14:54 - 16:40]

• Key Data Points for Investors:
  • Employment prints (labor data)—look at averages, not one-off numbers
  • Monitor FOMC minutes and central bank commentary
  • Understand that regions (US vs. Europe) have different mandates/drivers.
• Diversify Information Sources: Don’t fixate on single data points; context matters.

The “HALO” Asset Thesis: Physical vs. Digital

[16:40 - 19:26]

• Goldman’s H.A.L.O. Assets:
  Physical, tangible assets with “Low Obsolescence” (H.A.L.O.) are outperforming; digital assets/software are under pressure from AI-driven disruption.
• Art as an Investment:
  The hosts discuss blue-chip art and its outperformance vs. the S&P 500 as a case study of a H.A.L.O. asset (notable stat: Art Price 100 index beat S&P 500 by 64% from 2000–2024).

How to Own Risk Intelligently: Quality Over Junk

[19:29 - 21:57]

• Don’t Chase Momentum:
  The dangers of buying “hot” non-profitable tech stocks are highlighted—these swings can be brutal for late entrants.
• Alexandra: “It’s important to not chase momentum in certain periods…especially when the tide comes and goes out. Anybody who’s over levered and doesn’t have a good business model, they’re going to be extraordinarily vulnerable.” [19:52]
• Diversification:
  “Having a diversified set of allocations that can enable you to withstand some of these market shocks as they come through is really important.” [21:39]

The Continued Role for Fixed Income

[21:57 - 23:16]

• Fixed Income Still Matters:
  Despite recent periods where bonds didn’t protect against drawdowns, Alexandra argues fixed income is crucial to manage known inflation risk and as a ballast in volatile times.
• “Be thoughtful across diversifying there as well”—not just Treasuries but also EM debt, inflation-protected bonds, etc. [22:27]

The Broadening Market: Beyond the Magnificent 7

[23:16 - 25:40]

• Breadth Is Expanding:
  S&P 500 equal-weight index is now outperforming the traditional, mega-cap-dominated index; market gains are spreading to sectors like energy, staples, utilities, materials.
• Alexandra: “You really need to be thoughtful about not over concentrating your portfolio in a single name and being more diversified across the opportunity set.” [24:04]

Sector Winners and Rotations

[25:40 - 26:47]

• Boring is Beautiful:
  Sectors previously considered “boring”—energy, utilities, materials—are now leading due to AI’s infrastructure needs and geopolitical drivers.
• Alexandra: “There’s a tremendous demand for—as you think about even the AI build—how much energy is required for that. The scarcity of everything, in particular some of these commodities or assets.” [25:40]

The Importance of Active Management Amid Uncertainty

[26:47 - 28:54]

• AI and Software Uncertainty:
  The rise of AI brings massive sector dispersion; some software will thrive, some will become obsolete.
• Active Management Is Key:
  Fundamental and quantitative strategies are needed to navigate “winners vs. losers” environments.
• Alexandra: “It’s about having a mix of fundamental, quantitative, active and passive management in your portfolio so that you’re not exposed to just one single factor of AI that could be risky.” [27:14]

Labor, AI, and Productivity

[28:54 - 30:22]

• Employment and AI:
  AI-driven layoffs (Block, Amazon, etc.) may invite copycat behavior among corporates—watch unemployment as both a macro risk and a policy driver.
• It’s both a productivity story and a labor cycle normalization: “I think it’s a little bit of both…it’s something to definitely pay attention to. The unemployment rate is a key figure that we’re watching.” [29:18]

Final Takeaways for Investors

[31:39 - 32:39]

• Quality, Diversification & Liquidity:
  Alexandra’s closing advice: Stay focused on quality, portfolio construction, and holding liquidity as a strategic tool.
• “Don’t chase every incremental headline.” [31:55]
• **Take liquidity opportunities during market stress—being a liquidity provider can be highly advantageous in volatile markets.

Notable Quotes

• Alexandra Wilson Elizondo on portfolio synergy:
  “A portfolio has to be better than the sum of its parts.” [04:09]
• Robert Croak on active management:
  “You have to have active management and you have to have diversification. That way you can really not have to worry about having a knee jerk reaction to every headline and trying to time the market, which is impossible to do.” [10:07]
• Alexandra on momentum:
  “It’s important to not chase momentum in certain periods.” [19:52]
• Alexandra on AI’s sector impact:
  “It’s not going to be a rising tide for everyone.” [27:14]
• Alexandra’s final advice:
  “Being thoughtful about how you allocate against quality over junk in the portfolios…sometimes you’re given an opportunity because you can be a liquidity provider in extreme times of stress.” [31:55]

Segment Timestamps

• [00:56] Episode Introduction & Purpose
• [01:50] The Transformation in Portfolio Construction
• [02:57] Alexandra Wilson Elizondo Joins—Total Portfolio Solution Explained
• [06:18] What is a Model Portfolio? Customization & Institutional Benefits
• [08:13] Why Advisors are Adopting Model Portfolios
• [10:30] Macro Environment Overview & Geopolitical Risks
• [14:54] How Retail Investors Should Track Market-Moving Data
• [16:40] Physical vs. Digital Assets — The HALO Thesis
• [19:29] Quality in Risk Assets & Importance of Diversification
• [21:57] The Enduring Role of Fixed Income
• [23:16] Market Breadth Beyond the Mag 7
• [25:40] Sector Winners: Energy, Staples, Utilities, Materials
• [26:47] Need for Active Management Amid AI Disruption
• [28:54] AI-driven Labor Shifts & Productivity
• [31:39] Final Advice from Alexandra
• [34:15] Hosts’ Final Takeaways

Memorable Moments

• HALO Assets Discussion:
  The creative analogy of “HALO” (Heavy Assets with Low Obsolescence), including a lively debate about blue-chip art outpacing the S&P 500.
• Cautious Optimism:
  Alexandra’s steady, non-hype tone about macro trends — “discipline over drama.”
• Boring Isn’t Bad:
  “Boring” sectors (energy, staples, utilities) getting their time to shine thanks to global disruptions and AI’s resource needs.

Host & Guest Closing Thoughts

• Austin:
  “She knocked it out of the park… She talked about macro environment, the economy, what people should be looking at. Talked about reflation, talked about what’s going on in Iran, AI disruption, stocks and leadership, and what’s going on in Europe. I learn things with our interviews…what Goldman Sachs thinks about some of this stuff.” [32:48]
• Robert:
  “The biggest takeaway for me was don’t chase momentum. I love that statement she made and so many other great points.” [33:45]

Summary Takeaways for Listeners

• The era of “model portfolios” is here, offering retail investors access to institutional-grade management and real customization.
• The current macro backdrop is globally reflationary but volatile; don’t overreact to headlines or single data points.
• Diversification—including into physical assets—matters as correlations shift and new risks emerge.
• Avoid concentration in hot sectors or names—breadth and risk management are critical themes for 2026.
• Quality trumps hype, and disciplined, active oversight is essential in an era of rapid technological, geopolitical, and credit market shifts.

For ongoing discussions and practical investing insights, Austin and Robert invite you to engage with the Rich Habits Network.