There are moments in history when events overtake what has been the norm for many years.

It is not hard to see that the US has decided its position vis-à-vis the rest of the world, particularly in response to the rise of China, needs to change. These pivots do not come along every decade, and the last one was in the late 1970s when British Prime Minister Thatcher and US President Reagan changed course and set in motion the globalisation that we have all experienced for the past 40-odd years.

Like markets, politics does not stand still, and so we find ourselves in the midst of another pivot to an uncertain future.

When these events happen, it is best to be cautious, especially when market valuation indicators of the leading market are extremely high. This is where discipline can help, and the best investors are comfortable sitting on the sidelines or reducing their exposure while waiting for the appropriate opportunities to arise. And they will arise at some point.

After a 15-year bull market where returns have been easy, it is emotionally difficult to sell substantial portions of your holdings and move to cash. One of the reasons, I believe, is the incessant talk about needing to be fully invested at all times. This is a certain way to lose money and achieve nothing more than average or below-average returns.

We remain concerned that markets are completely disconnected from global geopolitical events, threats, and extreme valuations—a deadly combination that we think will not end well.

We expect considerable volatility over the next decade, and this will greatly impact returns. It is a time to be prudent and to understand the forces influencing your returns.