So Many Questions, So Few Answers
Rarely has the investing environment been as murky as it is today. We are making history – but in all the wrong ways. War in Europe for the first time in 75 years. Inflation hitting a 40-year high. US politics as divisive as they’ve been since the Vietnam War (some would say Civil). The emergence of China as a global economic powerhouse creating a new and uncertain geopolitical calculus. The first pandemic in 100+ years, easing haltingly into an endemic. The US reaches record-level peacetime debt-to-GDP. And, as if all that weren’t enough, we may be nearing a planetary tipping point with carbon intensity.
As we noted in our last letter, doing nothing in response to new information is an active decision. We take the same counsel that we give our clients: In times of uncertainty, be disciplined in adhering to policy and process. Rather than being reactive, lower your center of gravity and exercise patience as you prepare to be opportunistic.
Below, we share our thinking on some of the more dramatic current events and their possible investment implications. We also summarize portfolio adjustments we have made to date to strengthen our – and your – positioning in the face of such unpredictability.