Volatility, inflation, and geopolitical strain have countries and businesses focusing on defense. We argue for building resilience in portfolios in this fragmenting world, and delve into risks and opportunities we foresee over the next five years.

Active management and risk awareness may help investors navigate a global economy where inflation becomes “too hot” and growth “too cold.”

Investors should prepare to navigate unfamiliar terrain as the macroeconomic landscape undergoes dramatic transformations over the secular horizon.

The global economy is poised for a strong rebound, but investors should beware of market volatility stemming from pronounced inflation fears.

Vaccinations and fiscal support should lift the global economy in 2021, but several risks call for careful portfolio positioning.