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By Meg Flippin, Benzinga
The world is a scary place, and that couldn't be truer today with the threat of geopolitical turmoil, natural disasters and wars. Add a new U.S. president entering the White House to the mix, and you can see why many investors are concerned. Many investors also know the best antidote to doom and gloom is knowledge.
Understanding and navigating the chaos of the world was the major focus of day one of the Crossroads Summit sponsored by TradeStation Group, the two-day event held in Miami that brings together thought leaders and visionaries to discuss the challenges facing business leaders of today and the solutions to solve the problems of tomorrow.
Surviving A Geopolitical Avalanche
Navigating a rapidly changing geopolitical landscape was a focal point of acclaimed geopolitical strategist Peter Zeihan’s kick-off keynote. In it, Zeihan painted a very different view of the world and the future than what many have become accustomed to. Zeihan, leaning in on his research prowess, provided predictions across the globe. Take South Korea for one example. Right now, the population is dominated by young people who are spending money on cars, housing, clothing and other entertainment. But as they age, and with a very low birth rate in South Korea, consumption will slow, hurting the overall economy. The same, according to Zeihan, could happen to the U.S. by 2070-2075.
Then there’s Russia’s war with Ukraine. If Russia is successful, Ukraine will be the latest but not the last country the Kremlin sets its sights on. Russia, predicts Zeihan, will move on to its next country and it could very well be a NATO state. If Ukraine can keep up the fight for a few more years it could deplete Russia’s military to the point it is no longer a threat, argues Zeihan.
However, for those who are worried about the state of the world, Zeihan offered some grounded clarity, “Many of the things people think we lack today as a country are things we will rediscover. That’s one of the good things about cycles. Community. Equality. Greater room for social authority.”
Commodities A Play For The Future?
Understanding the changing chaos is only part of it; making money from it is what investors want and the topic the first panel at the Crossroads Summit covered. Panelists Michael Khouw, Mike McGlone and Kathryn Rooney Vera came together to discuss how to prepare for turbulence in the U.S. markets; their combined experience at CNBC, Bloomberg Intelligence, and StoneX made for a formidable panel.
All of the panelists agreed that material resources should be solid sources of investment returns. McGlone pounded the table on commodities as a play for 2025, namely copper, predicting copper will go up. He also likes U.S. treasury long bonds, arguing they could be the “next big trade.”
Vera likes gold for a commodity play and thinks the biggest risk in 2025 is inflation. Her contrarian bet is that the Federal Reserve won’t cut interest rates in 2025 and could potentially raise them before 2025 is over. Vera is currently overweight equities and is negative on the energy market, largely because there will be a lot of supply when President-Elect Donald Trump takes office.
More Volatility To Come
From keynotes to panels, the Crossroads Summit had it all, including a fireside chat with renowned historian Neil Howe who took to the stage to discuss his book "The Fourth Turning is Here," which explores the cyclical patterns of history and their implications for our current era of crisis and transformation. During the fireside chat with John Bartleman, CEO of TradeStation Group – the title sponsor of the summit – Howe weighed in on key things impacting the global economy and business owners. He predicted volatility will be front and center in the next ten years with inflation remaining a big issue. Only a few S&P companies will do well, and investors will need to inflation-proof their portfolios as much as possible, warned Howe.
Following the Fireside chat, a panel of investment professionals, including Mike Green of Simplify Asset Management, Susan Lindeque, CEO of Avestix Group & Empowerture and Luke Gromen, CEO of Forest for the Trees, discussed strategies for preserving and potentially growing wealth during the "Fourth Turning," a period of significant upheaval and transformation as laid out by Howe. The panelists focused on the need to protect assets by understanding the difference between nominal and real returns and diversifying. That means not having all your assets in the public markets.
Preparing For A Collapse
Day one of the Crossroads Summit closed out with a keynote by acclaimed economist Alan Beaulieu who shared his thoughts on the potential for a major economic collapse in the early 2030s. Beaulieu, basing it on his long-standing forecasting models, discussed indicators of a collapse, the importance of population growth and how business owners can use inflation to their advantage. The economist also warned of the real possibility that by 2034 a 24% reduction in Social Security will occur, likely resulting in more federal taxes – how much will vary based on state.
Heading into this environment, Beaulieu said business owners should see if their operation is interest rate and/or price sensitive, dependent on a market that could be hard hit, positively correlated to the financial markets and a potential acquisition target. Knowledge is key to making the right moves in times of chaos.
Chaos is front and center but the good news is there are steps investors and business leaders can take to prepare – these were the key takeaways on day one of the summit. Expert after expert laid out what could be coming down the pike and how to prepare. With day one offering much insight, stay tuned to hear what occurred on day two of the Crossroads Summit.
Featured photo by Giorgio Trovato on Unsplash.
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