Ray Dalio + Bridgewater make their “2020 Strategic Report: An Economic and Markets Outlook,” available for download. Bridgewater has also posted three videos summarizing their report. The summary is as follows:
Throughout history, there have been relatively long periods during which the markets and market relationships operate in a certain way — what we call “paradigms.” As we enter the 2020s, the forces that drove the recent paradigm are nearing their limits. Monetary policy has been pushed to the end of its useful life, the expected returns of assets have been squeezed to near (and, in some cases below) zero, and the levels of internal and external conflict are high and rising. Forces such as falling interest rates and corporate taxes, increased globalization and deregulation, and the shrinking power of labor, which have supported profit margins and growth for decades, are unlikely to be further supports in the future and, in many cases, are more likely to reverse. We believe we are now entering a new paradigm for markets and economies, and the shift to this new paradigm will be a big deal for policymakers and investors.
Every year, Bridgewater releases a strategic report that includes our outlook for markets and economies. Given its importance, the unfolding paradigm shift is the focus of our outlook, which covers the historical forces that brought us here, the dominant pressures that will likely define the new paradigm, and the wide range of potential outcomes for economies and markets.
As we continue to build on our deep fundamental understanding of how the economic machine works, which we have accumulated over the past 45 years, we invite you to take a step inside our research library and explore the key dynamics that we see shaping the next decade.
CO-CEO, BRIDGEWATER ASSOCIATES
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.