All-Weather Investing: The Effect Of Inflation And Growth On Returns

We measure the effects of inflation and growth cycles on the returns of various assets using the four-quadrant approach, where we classify periods into the following buckets: Slowing inflation/slowing growth (slowdown), rising growth/slowing inflation (goldilocks), rising growth/rising inflation (overheating), and slowing growth/rising inflation (stagflation). Our analysis provides insight into the coming macro environment. As growth and inflation begin to decline, the best choices for asset allocators will be fixed income, precious metals, CTAs and timberland.