16. November 2017: Plans are Worthless…
– We believe the chances of recession and a bear market in coming months are limited. Still, we seek strategies that will do well if risk scenarios transpire, and incur minimal cost if they do not.
– While our base case is for only a gradual rise in US inflation and rates, the tightness of the US labor market means that a sharper rise in prices remains possible. Hedge fund exposure and regional diversification can offer some protection against this threat.
– Tensions in the Middle East have escalated recently and the North Korean crisis continues to flare up sporadically. We are monitoring these risks closely and suggest strategies to counter them.
– We change our underweight Swiss franc versus the Swedish krona to an underweight in the Norwegian krone. We shift our underweight Australian dollar versus the Canadian dollar to an underweight against the US dollar.