Top Traders Unplugged
SI280: Equities for the Long Run? ft. Alan Dunne
Jan 27, 2024
Market expert, Alan Dunne, discusses the potential impact of a Trump win on the markets. They also discuss the importance of liquidity, the global macro picture, and the allocation to trend following in a multi-asset portfolio. The episode dives into options for gaining exposure to equities, compares drawdowns across different strategies, and explores the benefits of diversifying into non-correlated strategies.
01:04:31
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Quick takeaways
- The concept of stocks for the long run and the belief in the equity risk premium should be reassessed as equity returns can vary significantly over different time periods and regimes.
- Understanding the drivers of equity returns and considering the potential for regime changes is crucial for making asset allocation decisions, as the favorable equity returns of the past decade may not be sustained in the future.
Deep dives
Stocks for the Long Run - A Reassessment
This paper reassesses the concept of stocks for the long run and the belief in the equity risk premium. It challenges the notion that equities will consistently outperform other assets and highlights the variability of equity returns over different time periods and regimes. The paper also discusses the importance of considering regime changes and the impact they can have on equity performance. It suggests that diversifying strategies and a thoughtful asset allocation approach may be more appropriate in today's market environment.
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