What will the second half of the year bring for markets and how should investors position now?

I'm Alison Nathan and this is Goldman Sachs Exchanges.

I'm joined once again by Christian Mueller-Listman, who heads asset allocation research in Goldman Sachs research,

and by Alexander Wilson Elizondo, co-chief investment officer of the multi-asset solutions business in Goldman Sachs Asset Management.

For a change, I am in London this week and Christian and I are both in the London office,

and Alexandra is joining from our New York studio. This has become a biannual event, and I'm looking

forward to our conversation. Yeah, great to have you in London.

Thanks so much for having us.

So let's get started.

Christian and Alexandra, when we last spoke in January, you both emphasized that investors

should really be thinking about diversifying away from the mega-cap U.S. tech companies

that everyone was so focused on into different stocks, different assets,

even different geographies. And that's turned out to be a pretty good strategy if you look

back to the first half of the year. But there's been a lot of unexpected shifts in terms of

U.S. policy, in terms of the economy, and given those unexpected shifts, you know, what has

surprised you most about the market reaction to them? Christian, maybe you can kick us off.

Yeah, no, I think you're absolutely right. Like, there's two value ads that we can bring as

asset allocators to the portfolio, either market timing or diversification. And I think diversification

has worked really, really well, as you said, but market timing was very tough. And what really surprised

me is the speed of some of those moves. I think we clearly have seen surprising policy shifts.

There's no doubt about that. We even have geopolitical risks that have entered the picture in the last few days and weeks.

But I think really the speed of some of the moves we've seen have been absolutely mind-boggling

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