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3+1 weekly market insights

“3 Things You Need to Know + 1 You Don’t!”
The 3+1 Investors Series is BlackRock’s weekly investor video franchise, created to start your week with insights from the voices shaping markets. Featuring the firm’s leading investors, each episode highlights three perspectives on what’s driving markets today.

BlackRock | 3+1 Series
FC Transcript 091626
Episode 120: Rick Rieder

Can I keep my sunglasses on? 
Yeah, let’s do it.

Hi, I'm Rick Rieder, Chief Investment Officer of global fixed income at BlackRock. It’s the week of September 21st. This week, we’re taking 3+1 to Future Proof at Huntington Beach, California. Here are three things you need to know, and one you don’t.

First up…
If you go back to last year, I remember saying at Future Proof this is the best investment environment I've ever been associated with. This year, I think people are more on edge. Think about how things have changed. You know, earnings growth has been tremendous, with a big fiscal tailwind, interest rates were lower. Now there’s a bit more, “Okay I gotta think through a lot of these things. It's been pretty good. What do we do from here?” And the themes obviously AI, the debt, interest rates, and then our equities had a good run, what should I do with them? That’s where most of the conversation goes.

Number two.
I think the Fed was in a position that they had to move, given how hawkish they had been in the past. I think the biggest thing for interest rates going forward is the world’s going to try and come up with every answer to what’s driving rates higher. What's more important is actually the questions that you need to ask for your portfolio. And that is, “What do I do to take advantage of rates and where they are today?” From my perspective, you can think about where we’re going. These are yields we haven't seen in our generations. We can create 7% yields in portfolios. I've lived my entire career without being able to create 7%. We can debate why rates are where they are today. I said it’s time to stop talking and start doing. Let’s take advantage of this.

Next up.
I’ve been around this a long time, and when I'm drawn to fixed income it's getting to a boring 7. You know, the sleep at night 7. The percent of securities that get you above 6% in a good environment, meaning default levels stay low is as high as it's ever been. Now there’s a lot of tools. Use things like parts of a high yield market, use Europe, use some of the emerging markets. securitized market is still attractive. I’m now starting to buy some investment grade for the first time in a while. The big thing for us now is get seven, diversify it, and manage the interest rate exposure around it.

And finally.
I went truffle hunting in Tuscany, Italy. We had a dog, from 20 meters away, a tail would go up, he'd get excited and he’d find a truffle. My hot take? There's five essential food groups: peanut butter, bacon, eggs, escargot, and then truffles. My kids always talk about, can we ever get all five in a meal? I think we did it once, but it's pretty hard…with peanut butter.

To get more three plus one follow us on LinkedIn and YouTube. We'll see you next week.

3+1 Episode 20: Rick Rieder

Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, joins from Future Proof in Huntington Beach, California, to discuss what’s on investors’ minds: AI, the national debt and interest rates.

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BlackRock | 3+1 Series
FC Transcript 081926
Episode 119: Russ Koesterich

There we go. Perfect.

Good morning. I’m Russ Koesterich, Portfolio Manager on the Global Allocation team at BlackRock. It’s the week of September 14th. Here are three things you need to know, and one you don’t.

First up. The AI trade in June, early July, a lot of volatility. The key thing to know that volatility was not about the fundamentals. It really came down to crowding. A lot of people do the same thing, at the same time, then all looking for the exit. There are a number of ways to invest in the AI theme, outside of the mega caps. One is to look outside of the United States at semiconductor firms in Asia— countries like Korea and Taiwan. They’re very geared to the buildout that's really been driving this trade over the several past years. You can tactically manage your exposure, but at the end of the day, these themes, these industries, are areas you wanna be long for the long term.

Number two. One of the best performing parts of the market is energy— oil prices elevated. They’re demonstrating some of the best earnings momentum. The other reason to really think about these stocks in your portfolio, energy stocks are actually proven to be a very diversifying asset. In days when the market is down, we often see that energy stocks are some of the best performers.

Number three. Bonds experienced a change in their role in the portfolio. They’re no longer providing that hedge when equity prices go down. Today you’ve got a different dynamic. Bonds are a great source of income. For the first time in many years you can build a portfolio of bonds, without taking a lot of risk and generate a good income. There are plenty of places to look for bonds. One of the better opportunities we're seeing right now is in emerging markets. Where the yields you can get relative to the volatility of the asset class is actually very attractive.

Which brings us to…
I've been doing karate about 25 years. Honestly, I think it's as good for the mind as the body. Best martial arts movie? I’m actually gonna put Kill Bill Volume 1 where she goes to Japan. Not the most realistic fight scene, but she fights about 100 ninjas. To get more three plus one make sure to follow us on LinkedIn and YouTube.

See you next week.

Video Playlist

BlackRock | 3+1 Series
FC Transcript 081926
Episode 119: Russ Koesterich

There we go. Perfect.

Good morning. I’m Russ Koesterich, Portfolio Manager on the Global Allocation team at BlackRock. It’s the week of September 14th. Here are three things you need to know, and one you don’t.

First up. The AI trade in June, early July, a lot of volatility. The key thing to know that volatility was not about the fundamentals. It really came down to crowding. A lot of people do the same thing, at the same time, then all looking for the exit. There are a number of ways to invest in the AI theme, outside of the mega caps. One is to look outside of the United States at semiconductor firms in Asia— countries like Korea and Taiwan. They’re very geared to the buildout that's really been driving this trade over the several past years. You can tactically manage your exposure, but at the end of the day, these themes, these industries, are areas you wanna be long for the long term.

Number two. One of the best performing parts of the market is energy— oil prices elevated. They’re demonstrating some of the best earnings momentum. The other reason to really think about these stocks in your portfolio, energy stocks are actually proven to be a very diversifying asset. In days when the market is down, we often see that energy stocks are some of the best performers.

Number three. Bonds experienced a change in their role in the portfolio. They’re no longer providing that hedge when equity prices go down. Today you’ve got a different dynamic. Bonds are a great source of income. For the first time in many years you can build a portfolio of bonds, without taking a lot of risk and generate a good income. There are plenty of places to look for bonds. One of the better opportunities we're seeing right now is in emerging markets. Where the yields you can get relative to the volatility of the asset class is actually very attractive.

Which brings us to…
I've been doing karate about 25 years. Honestly, I think it's as good for the mind as the body. Best martial arts movie? I’m actually gonna put Kill Bill Volume 1 where she goes to Japan. Not the most realistic fight scene, but she fights about 100 ninjas. To get more three plus one make sure to follow us on LinkedIn and YouTube.

See you next week.

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