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At Bridgewater, our Women’s Influence Network (WIN) aims to connect, empower, and advance women at our firm and more broadly. As part of that mission, the network regularly invites experts and practitioners on these issues for conversations open to the whole firm. Earlier this year we welcomed Sallie Krawcheck, CEO and co-founder of Ellevest, a mission-driven investment platform for women. Krawcheck spoke about changing the course of women's lives by helping them better understand and engage with markets to achieve their financial goals. The discussion spanned her own investment journey, principles she's cultivated along the way, and her commitment to bridging the gender investing gap.

Over the last two decades, US corporate profit margins have surged and have contributed more than half of the excess return of equities relative to cash. Without that consistent expansion of margins, US equities would be 40% lower than they are today. Margins have been rising for 25 years, and when we look at market pricing, it appears to us that the market is extrapolating further margin gains. The long-term valuation of equities hinges heavily on what happens to margins going forward: if margin gains can be extrapolated, then valuations look reasonable; if margins stagnate, then valuations are a bit expensive but not terrible; if margins revert toward historical averages, then equities are highly overvalued.

Within a decade or so there is a high likelihood that the Chinese equity market will be on par with the US and European equity markets in terms of its size and importance to global investors. The size of the economy and the related size of the cash flows that it throws off for companies will be of comparable size, listings on public markets are growing rapidly, and the opening up to domestic and foreign institutional investors is happening faster than most are ready for.

January 2012

The pandemic and the shutdowns that followed have opened two distinct but related holes—a hole in incomes (the real economy), and a hole in asset markets. If left unfilled, these holes would produce a self-reinforcing collapse and intolerable economic and social outcomes. The longer they persist, the greater the accumulated problems and the higher the likelihood of prolonged economic weakness as households and businesses sell assets and eat through cash balances until more and more entities are bankrupt. Faced with this, the main policy choice is whose balance sheets will bear the losses, which will determine to some extent how the economy rebounds after the health emergency eases. Many policy makers are now attempting to use government balance sheets to fill these two holes through coordinated monetary and fiscal policy (MP3)—filling the gap in markets with the central bank balance sheet through QE, and filling the gap in incomes with the government balance sheet through fiscal stimulus monetized by that QE. The intent is to avoid a collapse in markets and to bridge the gap in incomes so that when the pandemic is over companies are still intact, workers can get back to work, and the economy can quickly get back on its feet. In other words, policy makers hope to reduce the impact of the pandemic to a short-term interruption in activity and avoid long-term economic problems.

Sean is an Investment Associate and 11-year Bridgewater veteran who leads the firm’s currency investment research. As part of the Atlantic Council’s 2020 Millennium Fellowship class he joins a prestigious group of other leaders, including Bridgewater’s Steven Kryger and Karen Karniol-Tambour who were part of previous classes. The fellowship focuses on equipping young leaders to tackle the defining global challenges facing the next generation. Already Sean has been driving impact by tapping into his experience from Bridgewater and sharing insights on how to shift the fellowship into a virtual program which the fellowship’s program director has said has been incredibly helpful and engaging.

Bridgewater recently hosted industry leader and longtime client and friend, Raytheon CIO Robin Diamonte. In a discussion hosted by Bridgewater Client Advisor Jessica Oleson, Diamonte talks about her journey to the top and the role of leadership in advancing Diversity and Inclusion in the workplace.

Bridgewater Founder and Co-CIO Ray Dalio explores why capitalism is not working for the majority of Americans, diagnoses why it is producing these inadequate results, and offers some suggestions for what can be done to reform it. These problems are creating widening income, wealth, and opportunity gaps which pose existential threats, bringing about damaging domestic and international conflicts and weakening America’s condition.

With monetary policy stretched to its limits, fiscal policy is more important than ever in offsetting the ongoing economic drag from the virus. Meanwhile, the US stimulus has begun to fade while other countries never had sufficient stimulus to begin with. Bridgewater’s research team explores the nature and impact of fiscal policy across the world.