What to Expect When You’re Expecting…
In “What to Expect When You’re Expecting…”, Sharif Eid of Amwal Capital Partners reflects on the shifting dynamics in fixed income markets, challenging traditional assumptions. He begins by questioning the reliability of long-held beliefs — particularly the notion that Treasuries and the U.S. dollar offer safe haven during downturns. Contrary to expectations, long-dated Treasuries have underperformed, and the dollar’s hedging behavior has become inconsistent. With inflation expectations rising, the Federal Reserve may have limited room to ease policy, undermining the standard response playbook during market stress.
Eid argues that the once-reliable inverse correlation between stocks and bonds has weakened, diminishing Treasuries’ effectiveness as a portfolio hedge. Similarly, the dollar, historically a safe asset, is no longer acting as a dependable offset in volatile times. He warns that overconfidence in outdated patterns can be dangerous, and urges investors to re-examine their foundational assumptions.
In response to this complex environment, Eid advocates for an investment strategy that doesn’t rely on directional market bets. He promotes a focus on “carry without beta” — specifically through uncorrelated, overcollateralized private credit. He highlights the Gulf Cooperation Council (GCC) region as a promising frontier for such investments, given its economic reforms and growth trajectory.
Ultimately, Eid emphasizes humility in the face of uncertainty. Rather than trying to predict exact outcomes, investors should prepare for a range of scenarios by building resilient, diversified portfolios that aren’t overly dependent on traditional market behaviors.
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