Forget What You've Learned About Investing in the Last 20 Years
The volatility in stock markets is telling us the story of huge structural change — one that takes us back to an old normal.
Remember?
Photographer: ERIC PIERMONT/AFPThe Association of Investment Companies recently polled UK fund managers, asking them what sectors they expect to perform best over the next year and over the next five years. The top two answers over both time frames were energy (28% over 12 months) and information technology (21%). All the other sectors lagged far behind (11% said healthcare).
This pretty much sums up the divide in today’s market. There are those who think everything will soon be back to some approximation of the normal of the last 20-30 odd years — inflation and rates will fall, the various supply crunches will sort themselves out, governments will relax and the market will revert to valuing growth above all. These are the people whose first question to every equity strategist is “when do we start buying tech again?”