Economic Insights

With 2022 finally over, and not soon enough, such is an excellent time to review our "investor resolutions." However, before we commit to our resolutions, let's check what the month of January may have in store.

With 2022 finally over, and not soon enough, such is an excellent time to review our "investor resolutions." However, before we commit to our resolutions, let's check what the month of January may have in store.

For those who malign 2022 simply because of lousy investment returns, poor asset allocation is the cause. More energy exposure and no bonds would have made the year more agreeable.

For those who malign 2022 simply because of lousy investment returns, poor asset allocation is the cause. More energy exposure and no bonds would have made the year more agreeable.

Managing your portfolio has more to do with gardening than you might imagine. Over the last decade, behavioral finance studied investor psychology and identified the repeated behaviors investors make throughout market cycles. As you can probably surmise, investors tend to develop many “bad” behaviors, which are the biggest reason for underperformance over time.

As you know, interest rates and inflation have been on the rise and the trajectory has been severe. It's important to remember that the inflation we have today is largely man made and the trajectory of rates and inflation is the "accident" that caused all the chain reactions in asset prices. We can thank our politicians and the Federal Reserve for higher prices and the carnage in our investment portfolios. It didn't have to happen this way. I could write a separate blog on the arrogance and ineffectiveness of the Fed as an organization but suffice to say, the real problems likely began when Ben Bernanke arrived at the Fed in 2006. The trio of Bernanke, Yellen, and Powell has consistently gotten important decisions wrong, failed to see trouble when it was obvious to others, acted too late, and stayed easy far too long. It seems absurd that any central banker could be successful at smoothing the business cycle, let alone for Powell and Co. to accomplish this for a $21 trillion economy.

As you know, interest rates and inflation have been on the rise and the trajectory has been severe. It's important to remember that the inflation we have today is largely man made and the trajectory of rates and inflation is the "accident" that caused all the chain reactions in asset prices. We can thank our politicians and the Federal Reserve for higher prices and the carnage in our investment portfolios. It didn't have to happen this way. I could write a separate blog on the arrogance and ineffectiveness of the Fed as an organization but suffice to say, the real problems likely began when Ben Bernanke arrived at the Fed in 2006. The trio of Bernanke, Yellen, and Powell has consistently gotten important decisions wrong, failed to see trouble when it was obvious to others, acted too late, and stayed easy far too long. It seems absurd that any central banker could be successful at smoothing the business cycle, let alone for Powell and Co. to accomplish this for a $21 trillion economy.

Most investment portfolios in the U.S. have very little direct exposure to emerging markets in general, and India in particular. As global investors in iconic b2b and b2c brands, one of the key themes we are excited about, is the expansion of the emerging middle class across the world.