The Great Reset: How Should We Then Invest?

The Great Reset
What Happened to Deleveraging?
Unfunded Liabilities
The Unthinkable Recession
How Should We Then Invest?
Introducing Mauldin Solutions Smart Core
Orlando and SIC
‘A speculator is one who runs risks of which he is aware, and an investor is one who runs risks of which he is unaware.’
– John Maynard Keynes
‘The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.’
– Ray Dalio, founder, Bridgewater Associates, LP
This letter and next week’s will be two of the most important I’ve ever written. They will set out my philosophy about how we have to invest in the coming days and years. They are the result of my years of actually working with clients and money managers and thinking about the economic and particularly the macroeconomic world. Because of some of the developments I will be discussing, I think the future is likely to be extremely challenging for traditional portfolio allocation models. The letters also discuss my thinking on new developments in markets that allow us to more quickly adapt to our ever-shifting environment, even when we don’t know in advance what that environment will be. I hope you find the letters helpful.
Longtime readers know that this letter tends to talk more about our global economy’s problems than about its positive opportunities. That’s not to say that I ignore the opportunities. In fact, about half of my next book will focus on the tremendous potential I see developing over the next 20 years.
I am extraordinarily optimistic about the ‘human experiment’ as we move deeper into this century. I foresee more of the world lifted out of poverty and afforded more of the necessities and even the luxuries of life, a much cleaner environment, steadily decreasing warfare, and healthcare radically altered in a positive manner. I truly believe most of us will live much longer than we currently imagine. In the not-too-distant future we will conquer many of the diseases that cut life so tragically short. Given this view, how is it possible to not be optimistic?

This post was published at Mauldin Economics on MAY 22, 2017.