Investors: There Are Bigger Risks Than COVID-19

They're turning their thoughts to other issues... SPECIAL OPPORTUNITIES [The Oxford Club Special Opportunities]( Investors: There Are Bigger Risks Than COVID-19 Matt Benjamin, Senior Markets Expert, The Oxford Club [Matt Benajmin] If you're done with COVID-19, you're certainly not alone. A recent survey shows that investors have finally moved on from the pandemic and are turning their thoughts to other issues and concerns. Each month, Bank of America's investment research division polls fund managers around the world to find out what keeps them up at night. The survey asks these professionals to rank the biggest "[tail risks]( - or risks that could severely damage their portfolios - at the current moment. For a year, COVID-19-related issues - from the impact the virus has had on society, the economy and the markets to potential problems with the vaccine rollout - have dominated the list. But in its recent survey of 220 investors, conducted from March 5 to March 11, 2021, virus-related concerns dropped from first place to third. There are now two other risks that loom larger than the pandemic for these investors. At the top of the worry chart is [the potential for inflation to spike](. In second place is a sharp and sudden sell-off in Treasurys - a bond market "tantrum" - that could drive up interest rates and damage the nascent global economic recovery. Here's a graphic showing the Bank of America survey results for both February and March... [Chart - What's Your Biggest Worry Right Now?] You can also see that concerns about a bubble on Wall Street have actually fallen significantly from February. That's probably because rising bond yields pushed stock indexes down between mid-February and when the survey was conducted, [raising questions about whether the bull market could continue](. What's Your Narrative? There's been quite a bit of research in recent years about how narratives - or stories about the future - have a strong influence on investor psychology, as well as drive stock and real estate prices. The current market narrative is no longer about the damage COVID-19 could do to a portfolio. Instead, it's about how too-strong economic growth - bolstered by incredibly loose monetary policy (by the Federal Reserve) and massive fiscal spending (by the federal government) - could reignite quiescent inflation, drive up interest rates and ruin the party for everyone. I reached out to a couple of our Oxford Club strategists to find out what they're concerned about these days. Their responses were, as usual, insightful. "My primary concern is the overvalued U.S. stock market and the bubble that is special purpose acquisition companies (SPACs), disruptive stocks and cryptocurrencies," said Quantitative Strategist Nicholas Vardy. "The bubble could be pricked by inflation, the bond market or just Mr. Market's mood swings - a shift in sentiment." Nicholas reminds us that "the bull climbs the stairs and the bear jumps out the window. And sell-offs are sharp and painful." Chief Investment Strategist Alexander Green is looking even further out in time to the next economic downturn and the lack of policy options central banks and governments will have to address it. "Short-term rates are already near zero, so there isn't much that can be done on the monetary front," Alex says. "And it's hard to imagine the kind of deficit spending we've experienced lately continuing into the future without serious repercussions." Those concerns aren't top of mind for the investors surveyed by Bank of America, but they probably should be. In fact, there are many factors investors need to consider these days. And disruptions are one of them. And this is the first year of what Alex and our other experts expect to be a "decade of disruptions." These disruptions could have a massive impact on your portfolio - [a massively good one if you're positioned correctly](. Want to know more about how to put yourself in that position? From March 25 to 27, the 23rd Annual Investment U Conference will be held in beautiful St. Petersburg, Florida, where our experts will be discussing disruptions in the markets... and how to profit from them. But don't worry if you can't be there in person. The conference will be LIVEstreamed so that you can participate from the comfort of your own home. [Just click here to register for your spot.]( Enjoy your weekend and stay safe, Matt SPONSORED [We're Going LIVE!]( A small group of Oxford Club Members has been able to confidently take on the markets - with help from a lucrative source you've likely never encountered. It's an annual closed-door gathering of the world's top investment minds. 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