Investing in Interesting Times

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.