Why Stock Returns May Weaken

Bridgewater a private equity fund ran by legendary Ray Dalio warned that a reversal of the strong growth seen over the years in U.S. corporate profit margins, which have provided a big chunk of the excess return of equities over cash, could lead to a shift that would go beyond the current cyclical downturn in earnings. "Globalization, perhaps the largest driver of developed world profitability over the past few decades, has already peaked," the firm's analysts said.