Nothing lasts forever. You know this. 
This is particularly true with the future of financial markets.
Passive Investing is last year’s game.
Passive Investing worked during the Great Moderation; a period of low volatility, low inflation, low interest rates and financial repression.
That game was to massively diversify and rely on the Indexes to give you the portfolio performance you needed to reach your financial goals.
That game is over.
The New Game is all about volatility and uncertainty.
Macro Volatility in geopolitics. Macro Volatility in commodities, demographics, supply chains and labor … to name a few … .
Most importantly, volatility in markets. Especially in financial markets.
As a result, Active Management is the future.
Opportunity awaits early adopters.
The dynamics of Active Management are tactical moves within a strategic framework.
Success depends on three considerations:
First: Central Banks will fight inflation with higher interest rates for longer. This is a path that will create ongoing damage to all economies.
The U.S. is not immune.
The damage to global economies and financial markets is not fully understood. Therefore, short-term moves to capture stock market gains will become increasingly important.
Continuously re-evaluate the damage that Central Banks are causing as they struggle to control inflation. This will require Active Management.
Second: U.S. Government bonds will begin to be attractive again. Patient investors will be able to lock in yields that you haven’t seen in more than decade.
Third: Inflation is here to stay for the foreseeable future. The inflation we’re dealing with will be persistent because it is based on the changing world order and demographics.
The New World Order will revolve around the U.S. as China implodes and Russia fades.
China: The Paper Tiger. Russia: The Hobbled Bear.
American power, strength and influence will continue to ascend.
Demographic trends have been set and we’ll have to live with them.
Depopulation will replace Climate Change as cause for alarm.
We see tactical and strategic opportunity in domestic aerospace/defense, energy, robotics and space.
The information contained in this Higgins Capital communication is provided for information purposes and is not a solicitation or offer to buy or sell any securities or related financial instruments in any jurisdiction. Past performance does not guarantee future results.
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Ray Higgins
San Diego