Making Money The Last Time This Happened, Nothing Made Money for 17 Years
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Mar 16, 2026 Jim Reid, Global Head of Macro Research at Deutsche Bank and author focused on long-term returns, shares big-picture lessons from 200 years of market data. He highlights US and tech concentration in global trackers. He traces past tech booms, explains valuation-driven long low-return stretches, and discusses equal-weight vs market-cap approaches and practical portfolio choices.
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Global Trackers Hide Big US Tech Concentration
- A global market-cap tracker today is heavily concentrated in US tech, giving investors ~25% exposure to seven stocks through a single product.
- Jim Reid warns that momentum can reverse violently, so that concentration is a valuation risk, not just diversity.
Buy Cheap Companies That Could Benefit From AI
- Prefer buying cheaper, unloved companies globally rather than overpaying for today's tech winners if you believe in AI's productivity gains.
- Jim Reid suggests buying 'boring' firms that could be transformed by AI rather than betting on richly priced AI leaders.
Valuation Bias Has Long-Term Outperformance
- Over 200 years across 56 countries, low-valuation portfolios outperformed high-valuation ones after rebalancing, sometimes by several percentage points annually.
- Reid's backtests show cheap PE portfolios returned ~16.5% vs ~11% for expensive ones in long samples.