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What happens when the world’s largest economy takes a sharp protectionist turn? When the global superpower prioritizes transactional foreign policies over long-standing alliances? And when this shift occurs amidst hot wars, the rapid ascent of developing nations, and artificial intelligence reshaping nearly every corner of modern life? The world is on the verge of finding out.
Whatever happens next, we are all living in a MAGA world now. As America turns inward, globalization is giving way to fragmentation, with the rules of engagement being rewritten in real time. Fresh cracks are appearing across the global economy as the infrastructure underpinning trade – networks that move goods, commodities, and data – becomes increasingly politicized. For investors, the message is clear: navigating this new reality demands building resilience into portfolios.
Yet, disruption also breeds opportunity. History shows that heavy-handed government intervention inevitably leads to unintended consequences. Paradoxically, while protectionist policies aim to shield domestic economies, they also spark innovation and unlock growth in surprising places.
This is precisely the story unfolding today. Market forces and pragmatic governments remain potent counterweights against full-scale fragmentation, keeping the engine of cross-border trade booming. Supply chains, despite political pressures, continue to stretch across the globe, bolstered by digital technology enabling new forms of connection. Meanwhile, a new class of “connector countries” are providing key ballasts against instabilities.
Crucially, many nations caught in the crosshairs of protectionism are now doubling down on their own domestic economies. Expect heightened fiscal stimulus and a renewed push toward industrial self-sufficiency. It may be difficult to see now but select regions are quietly moving toward their own MAGA moments. As these dynamics play out across the world, “fifty shades of greatness” will both surprise and disappoint certain investors, but they will undeniably reshape the global investing landscape in profound ways.
At Forstrong, we believe that a strong portfolio starts with a strong connection to the rest of the world and an understanding of the global forces that will shape the future. In an era where social media amplifies the trivial, it’s vital to focus on the most durable macro trends driving change. This approach not only strengthens risk management but also identifies global opportunities for investors willing to go further.
Once again we offer our annual Super Trends report – enduring themes will define the trajectory of capital markets in the years to come. We’ve titled this year’s report “Fifty Shades of Greatness.” And we begin with Super Trend 1, our outlook for the macro landscape.
Do macroeconomic fairytales ever come true? Occasionally they do. History offers a few examples of the Federal Reserve pulling off the fabled “soft landing” – lowering inflation without stifling growth. Think 1995, 1986, or even the late 1960s. But these are the exceptions, not the rule. Since 1960, nine out of twelve tightening cycles ended in recession.
But the current cycle has been anything but typical. Landings of any type have been elusive. Post-pandemic economies have followed unpredictable and asynchronous trajectories, marked by staggered upturns and downturns. No wonder many investors are struggling to make sense of where we stand in the cyclical roadmap. But one clear theme has defined the 2020s: surprises. Surprise growth. Surprise inflation. Surprise labor market strength.
Forecasting a recession has been a common – but misguided – call. Many investors, anchored to the idea that rising rates always bring swift economic contraction, have underestimated today’s resilience. Yet the global economy has evolved. The key macro blind spot? The world’s largest economic regions – America, China, and the Eurozone – together comprising roughly 80% of global GDP, are far less rate-sensitive than in prior decades. Unlike the leverage-driven cycles in the runup to the 2000 bust or the 2008 financial crisis, today’s private-sector balance sheets are more robust, supported by healthier debt-to-income ratios and stronger income trends.
After years of stagnation, wages are finally rising at their fastest pace in decades, fueled by chronic labour shortages. Meanwhile, corporate revenues are beating expectations as companies are passing through higher input costs and seeing topline growth march steadily higher. This cycle’s dynamics stand in stark contrast to the 2010s, when stagnant wages and sluggish revenues constrained global growth.
To understand where this could lead, rewind to the 1950s and 1960s – a time when labour shortages and capital investment extended expansions. During those decades, nominal growth climbed steadily, driven by rising wages, robust government spending, and expanding corporate revenues. Importantly, that period never witnessed a large contraction in corporate earnings.
Looking ahead, more upside surprises are on the horizon. Policymakers around the world remain committed to significant spending, focused on healthcare, energy, and infrastructure. A revival in demand is happening simply because the world has underinvested in the productive capacity of the economy for years (what our investment team calls the “revenge of the real economy”). Heightened geopolitical tensions are also leading policymakers to spend more on industrial policy. In fact, a global race to reindustrialize – driven by decarbonization, reglobalization, and remilitarization – is underway.
Emerging markets, too, are stepping into the spotlight. While China’s stagnation dominates headlines, other developing economies are carving their own paths as growth leaders. India, on track to become the world’s third-largest economy, is in the midst of a transformational capex boom. Surging private investment and infrastructure spending are accelerating integration into global trade networks. The last EM boom in the 2000s was driven by China’s rapid industrialization phase. Crucially, this new phase extends far beyond China with far deeper participation. Outside China, these nations represent some three billion people, where demographics are favourable, incomes are growing, and constructive dialogues are leading to a surge in cross-border commerce and economic partnership.
Amid higher growth and inflation, investors need to think differently. Cyclical slowdowns will occur, and volatility will remain elevated, but a “no landing” scenario remains the most likely outcome in the coming years. Here’s how to position portfolios:
Watch this space in the coming weeks, when the Forstrong investment team – drawing on centuries of combined experience – unpacks more of the world’s most influential Super Trends. Our hope is that these reports provides clarity amid the noise, helping you navigate this era of fragmentation with confidence.
Tyler Mordy, CFA, is CEO and CIO of Forstrong Global Asset Management Inc., engaged in top-down strategy, investment policy, and securities selection. This article first appeared in Forstrong’s 2025 Super Trends Report: Fifty Shades Of Greatness. Used with permission. You can reach Tyler by phone at Forstrong Global, toll-free 1-888-419-6715, or by email at tmordy@forstrong.com. Follow Tyler on X at @TylerMordy and @ForstrongGlobal.
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Content © 2025 by Forstrong Global. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited. Used with permission.
The foregoing is for general information purposes only and is the opinion of the writer. The author and clients of Forstrong Global Asset Management may have positions in securities mentioned. Performance statistics are calculated from documented actual investment strategies as set by Forstrong’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of composite results for separately managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect to size, inflow/outflow history, and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance numbers are net of total ETF expense ratios and custody fees, but before withholding taxes, transaction costs and other investment management and advisor fees. Commissions and management fees may be associated with exchange-traded funds. Please read the prospectus before investing. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.
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