By
Borsgade
In his latest Memo to Shareholders, Howard Marks gives an update on his thoughts on a “Sea Change” in the economy and markets. Basically, he sees a more permanent change in interest rates:
[…] I’ll still stick with my guess that rates will be around 2-4%, not 0-2%, over the next few years. Do you want more specificity? My guess – and that’s all it is – is that the fed funds rate will average between 3.0% and 3.5% over the next 5-10 years. If you think I’m wrong, ask yourself whether you’d put your money on a different half-point range.
Does it really make a difference for us as investors. If we ask Howard Marks, the answer is clear:
[T]he investment environment in the coming years will feature higher interest rates than those we saw in 2009-21. Different strategies will outperform in the period ahead, and thus a different asset allocation is called for.
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