What I Learned This Week

Is the paradigm that has defined investment returns for a decade coming to an end? The cycle is turning from consolidation to diffusion.

For more than a decade, the consolidation of U.S. economic power—both on the corporate and individual level—has been the key dynamic determining the returns of nearly every asset class. It has shaped the dominant trends in equity markets, whether growth’s outperformance versus value, passive investing’s meteoric rise, the low-volatility regime, or the concentration of capital in U.S. stocks. It has defined the tech-venture capital ecosystem, with funds concentrating in a small number of firms believed to have blitzscaling potential. It has determined global real estate values, with high-end jobs and wealth clustering in “superstar” cities. Even luxury collectables reflect the dynamic, with e…

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