Leo Harmon Jr., CFA, is Director of Research and Managing Director Research Division of the Equity Management Group of Mesirow Financial Inc. At Mesirow, Mr. Harmon serves as Co-Portfolio Manager and Director of Research for small-cap value and smid-cap value equity strategies and provides coverage for bank-related companies within the financial services sector.
Mr. Harmon has more than 25 years of investment management experience as a portfolio manager and research analyst covering a variety of industries with both larger and smaller market capitalizations and has a particular expertise in financial services.
Prior to joining Mesirow Financial, he was a managing director, director of research and portfolio manager for a predecessor company, Fiduciary Management Associates, LLC, where he joined in 2003 and which was subsequently acquired by Mesirow Financial in 2016. Before that, Mr. Harmon was a portfolio manager at Allstate Insurance, Allstate Investments LLC.
In this exclusive 2,997 word interview, only in the Wall Street Transcript, Mr. Harmon details his current portfolio management advice:
“If I am looking over the next six to 18 months, call it an intermediate time frame, we are in a market environment that is probably very near or very close to seeing the best returns behind it. We have had a bull market that celebrated his 10th birthday in March. That is very long, typically, for a market cycle. Most market cycles last anywhere from five to seven years.
We think that the Federal Reserve and other global central banks, in general, have used monetary policy to avoid crashes of risky assets and to extend a market cycle longer than it normally would have been. At this point, those types of policies will have less and less impact going forward.
That is not to say that the Fed can’t cut rates, but the impact of the next couple of rate cuts are much less impactful to the market prices overall than rate cuts we saw earlier in the cycle or the pause we saw in 2016.
Our thought process related to the market is that we are in a much more mature phase of the market cycle. That does not mean that equity prices cannot continue to go higher, but it does mean that they go higher at a much slower pace than we have seen in the previous 10 years.
We may be moving into a market environment over the next three to five years that has a much lower return structure than you would typically expect from equities.”
Read the entire exclusive 2,997 word interview, only in the Wall Street Transcript.
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