The Cycles we Keep Forgetting

Lings made a fascinating point: “Trump is trying to fix something that’s not broken. There’s nothing wrong with the US.” He backed this up with hard numbers – 2.5% average growth over 10 years, 4% unemployment, 7.5 million job openings. Yet the political narrative demands we believe manufacturing job losses represent an unprecedented crisis requiring dramatic tariff solutions. He forgets who actually pays for tariffs.

Here’s what facts tell us: US manufacturing employment held steady at around 17 million people from 1960 to 2000. Then it declined – not because of unfair trade, but because of automation and efficiency gains. This is a 25-year structural trend, not a crisis. But politicians can’t win elections by saying “structural economic evolution is proceeding normally.” They need villains and solutions – then them and us scenario.

The economists on the panel predict these tariffs will deliver “a 3-5% hit to long-term supply side potential” for the US economy. Classic unintended consequences that anyone who’s studied trade history could see coming. But we keep believing “this time is different.”

One panelist mentioned something fascinating: “US dollar cycles run on average in 18-year batches.” Eighteen years. What feels like unprecedented dollar weakness is actually part of predictable long-term patterns. The current dollar concerns aren’t unique – they’re cyclical.

Think about that. While we’re wringing our hands about dollar dominance ending, we’re actually just watching the same rhythm that’s played out repeatedly over decades. Currency strength waxes and wanes in patterns longer than most people’s career spans, which is exactly why each generation thinks their currency crisis is the first.

Here’s the deeper issue: we’re constantly being “sold” narratives that keep us trapped in cycles of anxiety rather than moving toward acceptance and wise action. Whether it’s politicians selling us crises that need fixing or corporations selling us products to solve fears they’ve manufactured, the pattern is always the same.

We lived with natural cycles for centuries before we modernized our world. Uncertainty wasn’t a bug to be fixed – it was the feature of reality that humans learned to navigate. Our anxiety about current events is understandable, but it’s historically misplaced.

During those Morningstar discussions, one thing became crystal clear: successful investing requires accepting uncertainty as normal, not seeking false comfort in narratives of exceptionalism. The panellists weren’t predicting disaster – they were highlighting opportunities for those willing to see beyond the noise.

In our wealth management process, we’re always evaluating whether the funds and strategies we use can recognise these patterns and position accordingly. While others react emotionally to “unprecedented” events, we’re looking at asset allocation through the lens of historical perspective. Some observations from the conference:

• Valuation opportunities are hiding in plain sight. While US markets trade at elevated multiples, Chinese equities are trading at price-to-earnings ratios around 11, compared to some US companies at 45-50 times earnings. This isn’t about political alignment – it’s about mathematical reality.
• Diversification works precisely because these cycles are normal. As one fund manager noted, a portfolio split between the US and China – “the two biggest rivals in the world” – delivers zero correlation and consistent growth over time.
• Home bias remains dominant despite global “turbulence.” US pension funds still allocate 85% to US assets despite all the talk of global instability. This suggests the “unprecedented disruption” narrative doesn’t match actual investment behaviour.

This is why we encourage you to read our communications, review your statements thoughtfully, and stay informed about global events. Not because you need to panic about each headline, but because understanding these broader patterns helps you recognize when market movements are noise versus signal.

Asset allocation and investment time horizons become vital considerations when you accept that uncertainty is permanent. The question isn’t “when will things get back to normal?” but “how do we position ourselves to benefit from the cycles we can predict?”

I’ll continue bringing you insights from conferences like Morningstar because staying connected to these discussions helps us all cut through the manufactured urgency and focus on what drives long-term wealth creation.

The cycles keep turning. The question is whether we’ll keep forgetting the lessons they teach or finally accept that “unprecedented” is just another word for “Tuesday” in the long history of human progress.

Ready to discuss how your portfolio reflects this reality? Let’s talk about positioning for the cycles ahead rather than fearing the ones we’re in.