“Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated…It will appear that a measurable uncertainty, or “risk” proper…is so far different from an unmeasurable one that it is not in effect an uncertainty at all.” – Frank Hyneman Knight – Risk, Uncertainty, and Profit
As we look out over the next decade, we anticipate that this economic cycle will look much different from previous cycles. The lingering effects of the pandemic, rising inflation, a new labor market, looser fiscal policy, and a transition to a low carbon economy will be the underlying macroeconomic themes that shape the economy. While previous economic cycles may provide some historical context, this new economic cycle is unique given the significant coordinated fiscal and monetary stimulus. On the face, this uncertainty may seem like a risk, but we believe that this will present opportunities for investors to profit.