...the next serious correction or bear market in stocks could have an outsized impact on both confidence and the economy.
This doesn’t necessarily suggest impending doom for equities next year; but it’s a cautionary tale longer-term.
Macro backdrops that include slower growth, and a move from a loose to tighter monetary policy, tend to usher in higher intra-market correlations and greater tail risks.
But what should not (never) be inferred is that we suggest investors should be “getting out.” [...] investing should always be a disciplined process over time.
That discipline should involve diversification—across and within asset classes—and periodic rebalancing.
A long, but utterly fascinating read.