Max Gokhman on Why the 60/40 Portfolio Is Dead

**SPEAKER_1** (0:00)
All right, guys, welcome back to the Tokenization Tower. We're with Max here of Franklin Templeton Investment Solutions, the Deputy CIO. Max, good to have you, man.

**Max Gokhman** (0:09)
Thanks for having me here.

**SPEAKER_1** (0:10)
Welcome to the Empire State Building. Welcome to the Nest.

**Max Gokhman** (0:14)
Nice.

**SPEAKER_1** (0:14)
I heard you had a good interview this morning at the NYSE.

**Max Gokhman** (0:18)
That's right, yep. You know, going from the annals of TradFi straight to the hallowed nest of DeFi.

**SPEAKER_1** (0:28)
So, you are the Deputy Chief Investment Officer of one of the largest asset managers in the space. You've been doing this for 22 years, I think I saw on your LinkedIn. That's right. Big LinkedIn guy, huh?

**Max Gokhman** (0:42)
Yep, yep.

**SPEAKER_1** (0:43)
Nice. Well, wanted to kind of bring you here to speak about this convergence, really, between what we're seeing in the digital asset space and with traditional finance and just kind of how you're thinking about this and what this looks like from your firm's perspective, as well as yours on the personal side. Before we get into that, any disclosures, disclaimers, anything that you would like to say about your role or just, yeah?

**Max Gokhman** (1:09)
Sure. Just general disclosures. Don't take anything I say as anything other than my personal opinion and it's not an investment recommendation. Exercise, caution when investing in things that trade at a high volatility.

**SPEAKER_1** (1:22)
Like Bitcoin. All right. So one of the talks of the town here in the digital asset space has been this rise of 24-7 trading, right? This kind of war, this oil spike, these things that were happening on the weekend drew a lot of attention to a little exchange called hyperliquid. The Wall Street Journal covered it. A lot of these kind of institutional focused mainstream news covered this concept of like oil futures are now being traded on this little exchange called hyperliquid. What is your take on the rise of 24-7 tokenized commodities trading, equity trading? How do you kind of see this playing out? What's your thoughts here? Just high level and then we can kind of get into some of the new ones.

**Max Gokhman** (2:05)
Yeah, so high level, we used to have this phrase coined here in New York City that money never sleeps, and that wasn't actually true. Money took naps and it's left on the weekends and doesn't anymore, right? That's actually the real 24-7 market. Why did we start the war on a Saturday? Markets closed, right? Like that's the reality, right? Like, it's not a coincidence when this operation kicked off, you know, you couldn't launch Epic Fury when oil futures were actually trading in the pits. And speaking of that, we don't really have pit trading anymore. So like you mentioned, I've been around this industry for a while.
I've gone from seeing like real, like actual traders on, say, the NYSE and in Chicago, moving markets to all about being electronic. This is just the next evolution of that. It makes perfect sense because things happen 24-7. So as an investor in TradFi assets now, like commodities, like equities, like fixed income, what do I do when something like Epic Fury kicks off? I look at the DeFi space. I look at futures on hyperliquid. I look at what's going on with the crypto market. I look at other tokenized venues, and I look at prediction markets like Cal-Shean Poly to see what the actual sentiment is. Now, what I think is going to start happening is you're going to see more and more firms move in to that 24-7 market and offer their products there, because otherwise, they're just missing out on that additional opportunity for capital.

**SPEAKER_1** (3:39)
Yeah, yeah. And I mean, there's been some resistance and pushback from firms due to the infrastructural changes required to shift into a 24-7 world, whether it be on the market making side, on the reserve management side, or just a combination of all these factors. What do you anticipate to be the logical transition to get the NYSE, the NASDAQ and the large exchanges of the world trading 24-7? Obviously, in the metals market and in oil and in some commodities, it's closer to like 24-5 with a little hour break there. What do you anticipate to be that progression?

**Max Gokhman** (4:22)
So hopefully this doesn't get my NYSE admission pulled, but it's a bit of a blockbuster Netflix moment, right? Like we actually don't need the NYSE to do this. This is gonna happen regardless.
They should be moving to offering tokenized equities. The market is gonna go 24-7. The providers of liquidity for that are gonna be winners, and it's really gonna be up to how we can orchestrate successful multi-vania execution. We've been doing a lot of work at Franklin with things like our Benji platform that can offer cross blockchain transfers. And I think that's gonna be really important. Like I should be able to trade what I want, when I want, how I want, full stop. But technology for that exists. It is not dependent on really a massive entity with physical space anymore, right? So I think once we've established that, it's just a question of who is gonna be the dominant player providing liquidity and matching buyers and sellers for that. And I think the answer is just going to be more than one. The technology exists with blockchain, and even people who are never gonna trade crypto as specifically an asset class, will still be using blockchain technology to trade whatever it is that they're trading. Now, we have one bit here that does need to adjust, and that's regulation. But we've seen just from what happened in March with the SEC, CFTC joint statement, we're seeing more and more moves towards a more sensible way to govern crypto and on-chain transactions. Once that's really established, institutional adoption comes in, and then it just becomes the default, right? Like we all, like as much as I liked taking some time off, the reality is you can't anymore anyways. I'd rather be able to trade things as they happen.