The Long View Joe Davis: How to Capitalize on ‘Megatrends’
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Sep 2, 2025 
Joe Davis, global chief economist at Vanguard, shares insights from his book on the interplay of megatrends like AI and investment strategies. He discusses how technological advancements impact market dynamics and challenge traditional economic views. Davis emphasizes the need for portfolio resilience in a deficit-driven environment, as well as how AI is reshaping careers. He also reflects on the value of mentorship and adaptability in navigating this evolving financial landscape.
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Bonds Are Ballast In A Higher-Rate World
- Bonds still provide ballast but their negative correlation with stocks may be weaker in a higher-rate world.
- Higher rates bring higher bond income even if price moves are less dramatic.
Dollar Moves Reflect Fiscal Pressure
- U.S. dollar weakness partly reflects growing national debt and future fiscal dynamics.
- Davis sees the dollar move as a manageable glimpse of a possible path, not an immediate alarm.
Why Own Non-U.S. Stocks
- Non-U.S. exposure is primarily a risk-management play, not just a valuation call.
- Davis stresses you shouldn't bet that the next era's top firms will all be U.S.-based.
