The Theory of Relativity

This absolutely bad financial environment we find ourselves in, is only temporary. In a war zone, like the Ukraine, being a wounded person is a relatively good thing, that is, relative to someone who is dead. But the next bullet may end your life and there is no place to hide. Stagflation is relatively better than recession or inflation but there is no place to hide your money. Cash is a sure loser but it beat China tech that is down over 50%. Yet, today, China tech is up more than US tech… for the moment.

This world today is not the same as we had in the past period of stagflation and what worked then may result in you’re getting wounded or killed this time. In the past, the buy and hold strategy worked well. I doubt that will be true in the future. What do you do when you don’t know where you are or where you are going and you have lost confidence in your leaders? The Fed is going to solve this? Congress is going to work together to solve this?

Innovation may be the answer. A new way. A new strategy. I don’t have the answer. But I do believe someone will come up with it. I heard someone recently that offered a glimmer of hope.

Warning! Stop sifting through the ashes of the past for the answer.

About Frank Sortino

Frank Sortino is finance professor emeritus from San Francisco State University and Director of the Pension Research Institute which he founded in 1981. For 10 years he wrote a quarterly analysis of mutual funds for Pensions and Investments Magazine and he has written two books on the subject of Post Modern Portfolio Theory. He has been a featured speaker at many conferences in the U.S., Europe, South Africa, and the Pacific Basin. Dr. Sortino received his Ph.D in Finance from the University of Oregon and has carried out research projects with many institutions like Shell Oil, Netherlands and The City and County of San Francisco Retirement System.
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