It takes more than a new U.S. administration and jittery financial markets to rattle U.S. equity veteran Michael Kelly. Since entering the industry in 1980 as a researcher for Alan Greenspan — before the economist became U.S. Federal Reserve Chairman — Kelly has learned to look through politics and instead focus on good old-fashioned corporate analysis, mixed with macroeconomics. For 15 years he worked at J.P. Morgan Investment Management, handling $4 billion as a senior portfolio manager and chairing the Wall Street bank’s U.S. Asset Allocation Committee. In 1999, he moved to PineBridge Investments as head of U.S. equities, before founding the firm’s multi-asset allocation strategy, which he still leads. That strategy has won his team at PineBridge multiple industry prizes — like the Global Multi Asset Manager of the Year award Kelly took home in 2014 for his ability to “produce attractive absolute returns” in a way “that helps to protect its portfolios during times of stress.”

 As part of a series about veteran investors, MarketWatch asked Kelly how investors can keep a steady hand after the recent shake up in the political landscape across Western economies. In this edited interview, he explains where to focus.
How do you think the political climate in the U.S. and Europe will have an impact on investing? First you need to look at the period we are coming out of, and the period we are going into. We are coming out of a regime of this very scary “stall speed” economy that lasted from 2009 to the middle of 2016. The environment was so slow that any exogenous shock could send the economy back into recession. Central banks were doing everything they could already and would therefore not be capable of any incremental support to revive the economy if it went into a recession. The mentality of the market, the mentality of the voters and the mentality of the politicians were very much aligned during this period. People were feeling growth was too hard to come by, and that manifested itself in politics — even more so than other complicated issues, like immigration. We are now evolving toward reflation. We think this is the biggest dynamic in the market right now. We’ve seen nominal growth all over the world pick since up last summer. There is a reflation of growth, reflation of pricing power, reflation of confidence — and these are the dominant issues in the markets right now. Even more so than the politics, which seemed to be all important during stall speed.