Key takeaways

• Broadening opportunities outside the US
• Yielf curves steepen, USD remain weak
• Emerging markets, US small caps lead in 2026
• The key driver of returns remains innovation
• Intrusive government

Broadening

The US is good, but…

• The world is evolving
• US small caps will rise since Fed cuts rates
• Look for emerging markets
• Shift from cash into fixed income
• Fed cuts rates -> cost of carry trade decline -> more returns in emerging fixed income
• Lower USD -> lower import prices -> lower inflation
• 5 cuts by the end of 2026

Risks:

• Short-term deposits and cash will fall
• Higher real interest rates, higher credit

Opportunities:

• Bullish
• Industrials, financials, small-caps
• Private players

Weakening

Main take: The decline of the dollar is not yet over.

Contributors to a weaker dollar:

• Soft labor market
• Shifting global portfolio flow

Look for:

• EM debt
• Commodities, gold, precious metals
• Crypto

Avoid:

• Crude Oil

Long-term

• AI
• Privates
• Government

Key Takeaways:

AI

• AI is still early
• Energy, energy, energy
  • Production
  • Transmission
  • Storage

Privates

A few investors, mostly institutional made first;

Benefits;

Goes mainstream.

Privates is still early, get in before it EMH took place.

Government

Key takeaways:

• Trade consititute ~30% of the global GDP as of 2024;
• Regionalization succeed globalization: North America, Euro, Asia.

Look for:

• EU health care, alternative energy, EVs, chpis

Keep in mind:

• Lower returns in the long-run

Risks and Summary

• Fed’s rate cut
  • Cut: boosts equities, yields, fixed income
  • No Cut: flat yield, boosts USD
• High inflation: weak stocks and bonds
• Geopolitics: global energy supplies

Look for:

• US fixed income
• EM, EU, US small-caps, US tech giants
• Private markets: real estate debt, infrastructure, private equity

Be ware:

• Geopolitics
• Lost faith in free market as governments step in