“Helicopter Parents generate a perfection of moral hazard, defined as there is no incentive to hedge risk because one is protected from its consequences. Moral hazard perversely increases the incentives to take on more risk because Mommy and Daddy (the Fed) will always save me / bail me out.”
Policy settings have set off extreme circumstances. Maximum risk and allocation to equities, at the worst ever prospective long term returns.
Ever greater policy support is creating ever greater risk taking.
How do the best investors come out well in the long term in these extreme circumstances?
To Succeed as an Investor, You Need to Understand These 2 Simple Concepts
The following is adapted from Invest Like the Best.