In the republic of mediocrity, genius is dangerous. – Robert Green Ingersoll

Morgan Stanley surprised everyone or, at least, tried to by stating that it was no longer going to be easy to make money in the equity markets. Let’s stop, right there; was it ever really easy. If it were everyone that jumped into the markets would be wealthy, instead the opposite is true. Right of the bat, we can state that the best place for such advice is the dustbin.

They went on to inform portfolio managers that the days of easy money were over and that they should expect Paltry gains of roughly 5%. Well, most, investors have been used to paltry gains as they have parked their money into treasuries, risking returns in their quest for safety.

They then went to state that the so-called Efficient Frontier model is about to collapse as indicated in the image below.

SourceMorgan Stanley

The only thing that caught our attention was the word collapse, and that to us means opportunity. We are not going to bother with the rest of the analysis because it’s total hogwash. It has never been easy to make money in the markets, and that is why the majority of players lose. At the same time, it is not as hard as many would have you believe. Some effort on your part is needed; the saying all play and no work make Jack a dull boy comes to mind. Trends come, and trends go and the only way to make money consistently is to identify new trends at the onset; you certainly are not going to make any headway listening to these talking heads.

So what these chaps are in effect stating is that you can now only make money if you opt for risk as opposed to growth. Was there ever such a thing as a risk-free investment, and has not the Fed forced individuals to speculate by maintaining an environment of ultra-low rates for an inordinate period.

The mere act of getting up and going to work entails some risk; you could get hit by a bus on the way to work or drop dead from a heart attack. In that sense, living is a risk, as your life could and will come to a sudden end one day. Do you see what we mean when we state this line of thinking is utter rubbish?