Bridgewater Associates just sent the following to ValueWalk with regards to the “bombshell” note from Ray Dalio regarding Fed future moves:
To be clear, we are not saying that we don't believe that there will be a tightening before there is an easing. We are saying that we believe that there will be a big easing before a big tightening. We don't consider a 25-50 basis point tightening to be a big tightening. Rather, it would be tied with the smallest tightening ever. As shown in the table below, the average tightening over the last century has been 4.4%, and the smallest was in 1936, 0.5%— when the US was last going through a deleveraging phase of the long term debt cycle. The smallest tightening since WWII was 2.8% (from 1954 to 1957). To be clear, while we might see a tiny tightening akin to what was experienced in 1936, we doubt that we will see anything much larger before we see a major easing via QE. By the way, note that since 1980 every cyclical low in interest rates and every cyclical peak was lower than the one before it until interest rates hit 0%, when QE needed to be used instead. That is because lower interest rates were required to bring about each new re-leveraging and pick-up in growth and because secular disinflationary forces have been so strong (until printing money needed to be used instead). We believe those secular forces remain in place and that that pattern will persist.
Morningstar Investment Conference: Using Annuities In A Portfolio For Added Stability
Over the past decade, annuities have fallen out of favor with investors. These retirement products became popular in the US during the Great Depression when potential retirees were looking for a secure income stream that would be unaffected by stock market volatility. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More