Interesting comments here from Ray Dalio at the Dealbook conference. This the is first glimpse at the fund manager’s 2013 outlook. Business Insider has provided a nice summary:
- Yields can’t go down anymore.
- Austerity is coming.
- Economy is running out of steam.
- QE is losing its efficacy.
- Rate turn probably finally coming late in 2013.
- The world is still in deleveraging.
- Sounding bearish: Risk premiums are likely to expand.
- It all comes down to interest rates. As an investor, all you’re doing is putting up a lump-sump payment for a future cash flow.
- In all deleveraging, you get through them by having an interest rate that’s lower than the growth rate.
- The big question is: When will the term structure of interest rates change? That’s the question to be worried about.
- Effects of QE diminishing as we do more rounds.. We’re facing austerity. And growth is flagging. This is an unprecedented risk the economy is facing. A slowdown with very little room to maneuver.
- The yield curve is certainly at the bottom. And so we’re squeezed on where they’ve gotten us in terms of.
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.