Investing in Interesting Times

Markets and Economy

What happened to major asset prices before 2022 and what changed in 2022? This article covers six key themes: 


  1. The backdrop of high asset valuations and low expected returns before 2022. 
  2. Investor responses to low expected returns, notably the boom in flows to private assets. 
  3. A revised picture after 2022: much higher expected returns at least for bonds (less for private assets so far) after the biggest inflation scare in a generation and central bankers’ attempt to contain it. 
  4. Contrasting fortunes and prospects for long-only
    assets and long–short strategies. 
  5. Understanding the rollercoaster ride of value-versus-
    growth stock selection strategies. 
  6. The important role of risk-mitigating strategies, especially trend following, amid protracted bear markets and elevated macro volatility.

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