The Forgotten Liquidity Crisis!

In the realm of long-term macro bets, the game is more akin to a marathon than a sprint. The strategy seems straightforward: identify a trend, position yourself smartly, and wait. But there’s more to it than meets the eye.

The Primary Goal: Portfolio Resilience

The ultimate aim for any investor should be to adjust their portfolio in a way that not only survives but thrives on their long-term outlook. A key challenge in this endeavor is monitoring and managing liquidity.

The Underestimated Liquidity Crisis

Liquidity is the lifeblood of financial markets. When it dries up, all assets start to move in unison – often downwards. The liquidity crisis, often overlooked in hindsight, can be devastating. A stark example was the year 2020, when the COVID-19 pandemic shook the markets. Suddenly, cash was king, and everything from stocks to Bitcoin was up for sale.

Diversification: Not a Panacea

In times of a liquidity crunch, the concept of diversification is put to the test. When the market panics, investors seek liquidity, often regardless of the diversity of their portfolios. In such phases, one thing often counts above all: cash.

The big question now is: How will credit conditions evolve? With rising interest rates and potentially tighter monetary policy, we could be in for some choppy waters. It’s crucial to closely watch market conditions and analyze how this might impact liquidity.

The current situation calls for investors to critically review their portfolios. Are they prepared for a potential liquidity crisis? Do they have sufficient cash reserves to weather turbulent times? These questions should be at the forefront of any investment strategy, especially in an environment marked by uncertainty and potential market upheavals.


The forgotten liquidity crisis serves as a stark reminder that nothing is a given in the world of macro investments. Prudent liquidity management and a flexible investment strategy are essential to not just survive but thrive. How does your portfolio look? Are you prepared for the challenges that lie ahead?

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