The ‘Golden Age’ for investing is over says Ralph Schlosstein

The "Golden age of investing" has concluded due to the Federal Reserve's aggressive tightening of monetary policy, according to Ralph Schlosstein, Evercore ISI's chairman emeritus. He believes the past four decades of declining interest rates have passed, making it harder to generate returns. Schlosstein suggests equities will be the primary avenue for profits, particularly in private equity due to its proactive approach..By Isabelle Lee.___STEADY_PAYWALL___.The aggressive monetary tightening launched by the Federal Reserve last year has brought an end to a "Golden age of investing' that will force Wall Street traders to rethink how they allocate their portfolios, says Ralph Schlosstein, chairman emeritus at Evercore ISI.."The last 40 years have kind of been the golden age of investing. I don't think we are going to have that for the next 10 or 20 years," Schlosstein said on Bloomberg TV Wednesday. "If you step back a little bit, we went through a 40-year period of time where rates were generally declining, longer rates, and they got extraordinarily low. I think that period of time has passed.".Investors had enjoyed rock-bottom interest for more than a decade after the Fed slashed rates in the aftermath of the global financial crisis. But that era of cheap money came to an end in March 2022 when the Fed began its raising cycle. The central bank has notched the federal funds rate up by 525-basis-points in a bid to curb inflation.."It's going to be harder to earn returns," he added. "The way to make money in the next couple of decades is going to be in equities," he said. "But I personally am way overweighted in private equity because I think private equity owners are more aggressive about addressing strategic or human shortcomings in businesses than public companies are.".Schlosstein, who said he cannot own individual stocks due to the nature of his wife's work as US ambassador to the UK, puts most of his investments into index funds. What he does not have in those, he invests in cash, he said. .Investors will closely dissect Jerome Powell's speech Friday at the Kansas City Fed's Jackson Hole Economic Policy Symposium for clues on the outlook for policy after officials last month lifted borrowing costs to the highest level in 22 years. While the address may not contain the same drama as keynotes in recent years, Powell's speech comes as policymakers enter what he's called the most difficult stage of the inflation fight — calibrating how much more tightening is needed, with little certainty about how their actions have affected the economy so far..Read more: Powell Can Map Final Steps in Inflation Fight at Jackson Hole.Schlosstein said Powell is going to be neither hawkish nor dovish, and instead will stay "right down the middle."."What's probably going to distinguish him is what he doesn't say," he said. "If there were a fairway in Jackson Hole that's where he will be.".Schlosstein added he does not see the Fed cutting rates by the first half of next year and that the US economy will see higher rates for longer, which he says, the market has not priced in just yet. ."The economy still has fair amount of strength," he said. "And because they used the word 'transitory' and got themselves into a deep hole, I think they are going to be very careful not to declare 'mission accomplished' too quickly and I think they are prepared to take the risk of a mild recession to do that.".Read also: .Where should investors be investing?Heystek: What needs to happen for me to change my mind about investing in SATerebinth's Ann Sebastian: Applying maths to reverse archaic investing models – to very good effect

The ‘Golden Age’ for investing is over says Ralph Schlosstein

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