5 RISKS THAT KEEP BILLIONAIRES UP AT NIGHT

1. The Return of Inflation
   Have central banks mastered monetary policy- or is there a chance that inflation could come back with a vengeance? After trending down for decades, billionaire Carl Icahn says that creeping inflation could lead to higher interest rates, which he thinks would be “difficult to deal with for the market”.

2. Record High Debt
   The most recent number for global debt is at $233 trillion, and about $63 trillion of that is central government debt.

Bill Gross, the “Bond King”, says that our system is dependent on leverage, and the critical values that affect this are debt levels, availability, and the cost of leverage. He said in a recent interview that “When one or more of these factors deteriorates, the probability of the model’s success and stability go down”.

1. Bond Market Worries
   Last year, 84% of investors said that the corporate bond market was overvalued – and 82% said that the government bond market was overvalued.

In a recent interview, hedge fund billionaire Paul Tudor Jones II predicted a price plunge, saying that “Bonds are the most expensive they’ve ever been by virtually any metric. They’re overvalued and over-owned.”

1. Geopolitical Black Swans
   Elite investors continue to worry about geopolitical surprises that could impact markets, such as a trade war with China. We looked at this broad topic in depth in our previous infographic on geopolitical black swans.

2. Overzealous Central Banks
   Lastly, many world-class investors are also concerned about the unintended aftereffects of massive central bank programs in recent years. With $13 trillion in total QE pumped into global markets since 2008, investors are worried about how much room that central banks have left to maneuver in a situation where the central bank “tool kit” is needed.