Last week, during the Fund Event, I sat in a packed room around a metaphorical campfire. This time, questions didn’t come through the chat, but as paper airplanes floating through the air. Some landed in the fire and were answered immediately. Others fell into the ashes. Time to pick those up.
Chinese stocks: buy or sell?
A little over a year ago, hardly anyone was interested in Chinese stocks, but that sentiment has shifted significantly. Chinese equities are in a “quiet bull market” that’s now drawing global attention.
The market is being driven by massive household savings flowing into equities (due to a collapsed real estate market, extremely low interest rates of only 1 percent, and a sharply rising gold price), supportive government policy (“the Beijing Put”), and reasonable valuations. Historically, a Chinese bull market can end in a bubble that’s pricked by policy tightening or external shocks, but that’s not the case for now.
Can quantum computing change the world?
The fact that this question was asked multiple times says it all. The narrative around this theme is already well developed. Quantum computing will fundamentally transform investing, cybersecurity, drug development, and even artificial intelligence.
Think of encryption that can be cracked in minutes (problem), drugs that now take years to develop being designed in months (solution), and materials science undergoing a revolution (opportunity).
Everyone knows it will be important, but no one knows exactly when or who will benefit. Investing in quantum computing today is like trying to predict in 1999 which internet company would still exist in 2025. The winner may not even exist yet.
The biggest risk for 2026
My standard answer to such a question is that you’re always bitten by the snake you don’t see. So not inflation. Not recession. Not geopolitics. The biggest risk—and at the same time, the greatest opportunity—is the illusion of consensus.
At the end of 2022, there was a consensus among economists—and thus in the markets—that a recession was coming. That turned out to be a good moment to buy equities. The real risk lies in what no one expects; it’s not the known risks that hurt us, but the ones we can’t foresee. A well-diversified portfolio helps minimize the impact of such risks.
What is impact investing in geopolitical times?
Several questions touched on impact investing, including whether it’s still possible to make the world a better place through investing when everything seems to be on fire. Every investment has impact, and the financial world’s influence is often underestimated.
Financial markets are particularly effective at accelerating transitions, such as the energy transition, but even bubbles often accelerate change by channeling capital in one direction. Geopolitical unrest tends to speed things up rather than slow them down. Impact investing is often not about companies that are already perfect, but those that can improve.
Private markets in the portfolio?
Private markets are no longer the fund of the week or the tip of the day. They’re not a satellite position either—they belong at the core of the portfolio. Nor is timing particularly useful here; they should be a structural component.
Private markets are also increasingly taking over the role of public markets, which are shrinking for various reasons.
The dollar: sinking or not?
The world today is fundamentally different from fifty years ago. Back then, the dollar was tied to gold (until 1971), capital flows were regulated, the Fed operated in a bipolar geopolitical landscape, and there was no digital economy moving trillions in milliseconds. The causes and consequences of dollar fluctuations are therefore fundamentally different.
Because the dollar is the world’s reserve currency, it’s structurally overvalued. What supports the dollar are the deep US capital markets and the lack of an alternative for global savings. The United States is also technologically dominant, energy independent, and institutionally stable. Negative factors include structural budget deficits, growing “de-dollarization,” and political polarization.
But currencies erode over decades, not months. Hedging the dollar at least costs the interest rate differential, which you earn back with bonds but not with equities. In fact, a further decline of the hedged dollar may reduce returns more than leaving it unhedged. In a real crisis—when everyone flees back to the dollar—hedging doubles the portfolio’s hit.
Trias Politica in the US: impact on investing
The Founding Fathers built in extensive safeguards against tyranny—such as the separation of powers, checks and balances, an independent judiciary, the amendment process, and later the Bill of Rights. Historically, US democratic institutions have proven resilient, but modern developments—such as executive orders, the politicization of justice and intelligence agencies, and loyalty to party over institutions—show that these safeguards still depend on people willing to uphold them.
Polarization and geopolitics: worse than the eighties?
In the 1980s, the Cold War had predictable rules: two superpowers, clear blocs, and “mutually assured destruction” as the ultimate check. Today, polarization is far more fragmented. That makes it more complex and harder for investors to respond. Now it’s about geographic diversification and awareness of supply chains. Proxy wars are increasingly fought through fake news and social media rather than direct conflict.
Crypto: why are traditional managers ignoring it?
It’s remarkable that crypto, which was meant as an alternative to the financial system, is now working so hard to become part of it. The first serious attempt was the SEC filing for bitcoin trackers, which allowed the bitcoin price to double. When Trump embraced bitcoin to win votes, it broke through the 100,000 dollar mark.
What’s now supporting bitcoin is index investing. It seems only a matter of time before bitcoin becomes part of the financial system, and once it’s part of the benchmark, investors will follow. But regulators must first give the green light.
What do all these ideas mean for the straightforward investor?
The “straightforward portfolio” today typically consists of 60 percent equities, 30 percent bonds, and 10 percent alternative investments. The main change is the integration of private markets. These are often grouped under alternatives, but private equity is really part of equities, and private debt is an extension of bonds.
Every era brings its own challenges, such as whether or not to hedge the dollar, managing the duration of growing sovereign bond exposure, positioning in gold and bitcoin, and handling the concentration of tech stocks.
Is there as much consensus as earlier this year?
At the start of this year, consensus was euphoric about the US, a soft landing, rate cuts, and tech stock performance. Now there’s more uncertainty—about trade wars, the returns of artificial intelligence, and even renewed debate about the chance of a recession.
Consensus is both a risk and an opportunity. We’re now in a sweet spot for selective investors: enough uncertainty for mispricing, but not enough panic for systemic risk.
Gold as a hedge when the bubble bursts?
Gold isn’t a good hedge when a bubble bursts. Correlations rise during such corrections, especially among assets that performed well before. Gold is primarily an investment in fear and is also seen as a hedge against inflation. Higher productivity is likely to keep inflation in check.
As for fear scenarios, gold in a Swiss vault isn’t that useful. Gold only matters if you can carry it—to buy bread at the bakery or to open gates and doors.
Which market would I throw into the campfire?
Not an easy decision, because you can’t time the top of a hype. But where it was essential in recent years to consider the Magnificent Seven, it’s now time to underweight them.
As during the dot-com bubble, there’s a distinction between the old economy and the new economy. The “old economy” is now cheap—think of pharmaceutical companies—and the upside for the “new economy” is shrinking. But because the top can’t be timed, and a real hype always peaks higher than expected, a gradual reallocation is advisable.
Han Dieperink is chief investment officer at Auréus Vermogensbeheer. Earlier in his career, he was chief investment officer at Rabobank and Schretlen & Co.