Northwestern's Schutte Says Investors Should 'Own Some Commodities'

• Investors have 'bid back up the markets' by returning to 'old favorites' like non-profitable tech and the 'Mag 7'.
• Sees potential for market broadening into small and mid-cap stocks if geopolitical conflict eases and interest rates remain well-behaved.
• Prefers cheaper, under-appreciated small/mid-cap stocks due to more favorable valuation (S&P 600 at 14-15x P/E for 17.5% growth vs. S&P 500 at 21-22x P/E for 17% growth).
• Recommends owning commodities as a hedge against persistent inflation and two-sided market risks, noting the Fed's struggle to meet its 2% inflation target.

Northwestern Mutual Wealth Management CIO Brent Schutte observes investors returning to 'old favorites' like big tech. He suggests a potential broadening into small and mid-cap stocks if geopolitical tensions ease and interest rates stabilize. Schutte emphasizes valuation and recommends owning commodities as a hedge against persistent inflation and two-sided market risks, advocating for a long-term, diversified approach.