Thoughtful Money with Adam Taggart The 60/40 Portfolio Is Dead Because Bonds No Longer Work | Louis Gave
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Dec 16, 2025 Louis Gave, the Founding Partner and CEO of Gavekal, dives into the shifting landscape of global investments. He argues that the traditional 60/40 portfolio is losing its effectiveness, as inflation drives investors toward energy stocks instead of bonds. Gave highlights emerging markets and Latin America as hotspots for opportunity, while also expressing concerns about rising energy prices and the AI bubble. He discusses the potential impact of geopolitical shifts, emphasizing that understanding these trends is crucial for savvy investors.
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Use Energy Stocks As A Hedge
- Use energy equities as the primary hedge that can rise when inflation/energy shocks hit.
- Prefer high-dividend refiners and select energy MLPs for income and downside protection versus bonds.
Gold Is A Low-Rate Hedge
- Gold behaves more like a hedge against very low interest rates than a pure inflation hedge.
- Buyers recently have been central banks and Asian retail due to near-zero local rates, not U.S. retail.
AI Growth Requires Massive CapEx Now
- The new AI cycle differs because it requires enormous capex, changing who benefits and how markets value growth.
- Markets may stop rewarding heavy spenders, which could pop the AI/ hyperscaler exuberance.