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Bridgewater is proud to work with organizations dedicated to equipping people from underrepresented communities to succeed in our industry and beyond. Management Leadership for Tomorrow (MLT) bridges the critical college-to-career transition gap and ensures that Black, Latinx, and Native American individuals succeed in the “last mile” to post-college careers. Members and allies of Bridgewater’s own Black and Hispanic/Latinx networks were thrilled to attend MLT’s 15th Annual Anniversary Dinner in celebration of everything MLT CEO John Rice and his team have achieved. The event was also a wonderful opportunity to engage with MLT fellows, the students and leaders whose lives are changed by the work MLT does.

Members of Bridgewater’s LGBTQIA+ and Ally Network attend The Center Dinner this year, which raised critical funds to support The Center’s life-saving and life-enhancing programs for members of the LGBTQIA+ community in the New York City area. We were proud to sponsor this year's event, and we were moved by the award recipients and speakers who are doing their part to empower this community. Photo credit: Matteo Prandoni for BFA.com.

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.

This post originally appeared in the Wall Street Journal in 2015.