To Navigate Volatility, Find the Signal in the Noise

"Thematically, the underlying driver of the market is the growth trajectory," she says.

In the interview, the investment leader discusses investing opportunities, the merits of an all-weather portfolio, big threats she’s monitoring and the Total Portfolio Solution, which she conceived for modernizing RIAs' portfolios.

Here are highlights of our conversation:

THINKADVISOR: Last week, the S&P 500 and Dow Jones Industrial Average closed at record highs. How significant is that?

ALEXANDRA WILSON-ELIZONDO: Price matters. But what comes with record prices is that you have to be thoughtful about the risks that are still out there in the marketplace. If we learned anything last year, it’s that risk shows up pretty quickly.

There are still risks to the labor market that we need to make sure we’ll be seeing [entirely] in the rearview mirror. That’s something we’re actively paying attention to.

THINKADVISOR: How do you ignore all the noise but stay open to the notion that there may be some validity to it?

WILSON-ELIZONDO: It comes down to two things. One is that you have the right governance in your investment process. And two, when you see XYZ headline and react to it, you need to [realize] what it means for the fundamentals.

You have to be able to separate the signal from the noise.

THINKADVISOR: Given that President Donald Trump is unpredictable, how much does trying to anticipate his moves factor into your investing strategies?

WILSON-ELIZONDO: A large part is that we want to make sure we have portfolios that can withstand volatility. Last year, the market really responded to announcements that potentially led to recession probabilities going higher.

We’re always paying attention to announcements that fundamentally change, such as the recession outlook.

THINKADVISOR: What’s chiefly driving the market today, and what should financial advisors be wary of in advising their clients?

WILSON-ELIZONDO: The year has really gotten off to a very fast start, both in geopolitics and new political announcements.

But thematically, the underlying driver of the market is the growth trajectory: inflation coming down, the labor market showing some signs of improvement, the expectation for growth to be above trend and the amount of fiscal stimulus that we’ll start to see this year.

You’ve seen risk assets really taking nicely to some of the announcements.

In terms of the value you’re hoping to get out of investing in risk assets, the return we saw [in 2025] came from earnings growth in the United States.

We’re expecting [the U.S.] to have strong earnings again this year. So we have some positive assumptions baked in, similarly for fixed income.

There are a lot of underlying subtrends as well, and you’re seeing that in the sectoral performance.

THINKADVISOR: Where are the investment opportunities?

WILSON-ELIZONDO: We still like being long equities. We do believe in being diversified internationally. A lot of international markets are trading cheap, not only historically but even cheaper than they have in the past.

And we see some earnings turning around and improving in places like China, where people have been underinvested.

So we like places in Europe, such as Germany, where there’s strong fiscal stimulus.

In the world of AI, we still like being invested in the United States. But it’s important to get access to some diversification in other markets that aren’t dependent on one very large sectoral theme.

THINKADVISOR: What do you anticipate the Federal Reserve will do about interest rates this year?

WILSON-ELIZONDO: We expect the Fed to be marginally supportive — with a few more cuts to come.

We think investing opportunity will mean a very active, disciplined approach to what will ultimately be a lot of noise against a very pro-growth backdrop.

THINKADVISOR: What chiefly informs the innovative investing strategies you create?

WILSON-ELIZONDO: Within our multi-asset solutions team, we aim to have portfolios that are all-weather, meaning they can handle any macro changes and structural shifts in the market.

There are things happening thematically from a top-down perspective. But importantly, there are also structural changes within the market: the cost of hedging, for example.

One of the most important things about a truly good investment process is that it is tenured and innovative. [But] you have to constantly challenge your underlying assumptions. You need to be open to: Hey, the world around you is changing.

THINKADVISOR: Do you see alternatives becoming even more popular?

WILSON-ELIZONDO: There’s a lot of opportunity to increasingly add alternatives into portfolios. But it has to be done taking into consideration liquidity constraints, sectoral differences [and so on].

Overall, we think alternatives build a better, more diversified portfolio with the opportunity to outperform.

THINKADVISOR: Tell me about Goldman’s Total Portfolio Solution for RIAs that you came up with.

WILSON-ELIZONDO: That’s effectively addressing topics such as how to incorporate alternatives, how to consider things like taxes and tax-loss harvesting, and having SMAs in your portfolio.

We spend a lot of time thinking about the portfolio being better than the sum of its parts. That’s the Total Portfolio Solution.

THINKADVISOR: What’s one of your other innovations?

WILSON-ELIZONDO: To incorporate both left- and right-tail hedging into a portfolio so that you can have that all-weather portfolio.

Having access to the right instruments to handle quick V-shaped recoveries is very important to us.

THINKADVISOR: Do you interact much with the advisors about your investing strategies?

WILSON-ELIZONDO: We actively partner with advisors and RIAs who are leaning into our investment framework and expertise since it can be so easy to be swayed by headlines or being more tactical.

We spend a lot of time educating the advisor base and our partners across the retail ecosystem on how we think about investing.

At the end of the day, we’ve observed that communicating to the retail investor is one of the best ways to deliver alpha because they want to have understanding: Some of the things that are happening in the market can be scary.

THINKADVISOR: It doesn’t seem that you’re expecting a correction this year, though. Right?

WILSON-ELIZONDO: There are probably going to be opportunities in small corrections. There typically are. But we expect to end the year on a positive note — a positive overall return for equities.