A Fed survey shows that the most significant potential shocks or risks in the market are not bubble risk and overvaluation but policy uncertainty and geopolitical risks. These macro risks are more complex to hedge for the long-only crowd and harder to handicap, as they are based on events that most investors will have a hard time researching. The expansion of the war in Ukraine or tensions with China cannot be assessed in a balance sheet or an income statement.
Watch the macro risks that are hard to handicap.
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