One of the great Thanksgiving traditions is pretending the same recipes will work forever. Markets do this too.
Our brains like familiarity. When nothing bad has happened recently, we assume nothing bad will happen soon. This is known as the familiarity heuristic, though “emotional laziness” also works.
Extended calm seduces us into thinking we understand the landscape—right up until the landscape shifts beneath our feet.
“Often we don’t realize the world is changing until long after it has changed.”
Today’s economic environment is full of shifting tectonic plates: labor dynamics, energy transitions, geopolitics, technology, supply chains. Central bankers say the quiet part out loud now: the traditional transmission mechanisms may no longer work like they used to.
And when a regime change arrives, your old assumptions become liabilities.
That beloved negative stock-bond correlation?
Yeah, it may take its Thanksgiving break indefinitely.
Financial Takeaway:
Stability is not safety. Familiarity is not knowledge.
The snowpack looks peaceful—until the avalanche.
We need to fight our instinct for comfort and remember the real job of risk management isn’t predicting the future; it’s building resilience for the futures we didn’t predict.
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