Wellington Management
January 06, 2025
Tracing our history to 1928, Wellington Management is one of the largest independent investment management firms in the world. We serve as a trusted adviser for institutions in more than 60 countries.

A guide to investing in the age of anxiety

When we polled 170 asset owners recently, more than a third said they were unusually anxious about their portfolio positioning. Geopolitical risk, market concentration, and equity valuations/credit spreads were the top sources of angst, but the list was long and varied.

To help, I want to offer some thoughts on worries that may be worthy of attention. I’ve divided my observations and suggestions into two categories:

1. Learning to live with an uncomfortable investment backdrop , which I define as one in which market behavior is being driven by new or unusual phenomena (e.g., deglobalization). Here, I consider the choice between cutting risk broadly, carrying on as usual, or finding a happy medium, which might include portfolio tilts to defensive or dynamic investment strategies. I also offer some specific thoughts on navigating the “Magnificent Seven” era of market concentration.

2. Adapting to a world where some investing rules of thumb may be broken , including rules related to the value of diversification, the ability of private equity distributions to fund future commitments, and the cyclical nature of investment performance in areas like growth and value. I offer a four-step process to help asset owners determine where their portfolios stand relative to these rules and assess their confidence in the rules going forward.

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