I'm not saying this will 100% happen, but I'm getting more worried as the months go by that this will be a poor decade for returns and that we might experience a very nasty stagflation scenario in the somewhat near future. I am not a macro guy, but whatever little I've researched on the subjects suggests to me that stagflation tends to arise from supply-side shocks coupled with questionable monetary policy (i.e. too much government spending).
This might be a hot take, but I feel like much of the inflation we're feeling these days is due to multiple supply shocks. With the Fed raising rates and economic growth stunting, I think we'll soon start seeing the "pain" Powell referenced in his speech in that unemployment is going to start creeping up and growth is going to be harder to come by as the rate hikes start filtering through the economy.
My questions are:
1. Is this logic correct regarding how stagflation occurs and is anyone else concerned about such a scenario unfolding? I feel like the market consensus is we're in a recession, but it'll be mild and we'll get out of it quickly. I'm a bit concerned this won't be a quick dip and rapid rise like we've seen in markets lately when there's a weakness because this mess is more widespread and will require time/investment to get out of.
2. What are you all investing in lately, especially if such a scenario were to occur, to protect your wealth, besides energy/O&G equities?
Thanks!
Just hoping the pain ends by early next year lol
commenting to see responses later
Probably good place would be essential RE (residential, grocery anchor places, dollar generals, maybe healthcare).
asking macro people with no AUM how to position a portfolio is like asking stephen hawking how to train for a marathon
Kinda, yeah.
I mean, I've a PhD, and I focused on macroeconomics. Off the top of my head, since stagflation is a situation of low to no economic growth combined with rising inflation, I'd focus on commodities that follow up with inflation (e.g., Gold and other metals) and avoid anything that follows the economy more broadly (e.g., bonds and other fixed income securities). But this is objectively very poor advice. Actual traders/investors with more direct proven experience in the market are waaaay better placed to help out.
I would short Gold but long other commodities lol
Hey, saw your comment on an old post about auditing. If you don't mind sharing a little detail I'm super curious about if you're still at a B4 or if you've made an exit. I'm wrapping up my first year as an auditor myself and wondering what the exit opps have looked like from your perspective, if the work gets any less miserable as you move upwards, etc
global macro trading fund? they're nimble enough to profit from volatility
Quality. Leading companies of leading industries. Preferably with solid or growing dividends (aristocrats). They can withstand and are generally the stalwarts of the economy. Also, patience. Big difference between trading and investing. Investing is about long term (at least 5 yrs).
... good job timing the peak btw.
Came across this thread while searching others.
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