Markets have entered an 'age of anxiety'. I think we are going to see an extended period in which investor sentiment swings between extremes of optimism, anticipating a return to normality, and pessimism, worrying that the recent pandemic will have damaging economic, social, and political after effects that will persist longer than expected.
Investors should be diversifying their portfolios to deal with a coming era of heightened economic uncertainty and market volatility, but this does not mean that we are mired in a deep economic depression or extended bear market. Quite the contrary. Investors with a long horizon should do well with equities. But - and this is an extremely important but - in the intermediate term it will be very difficult to generate meaningful returns in conventional asset classes. Investors must make room in their portfolios for alternative investments because their ability to hedge can provide much ...
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