While the ‘wait and see’ approach continues, the factors at play are seemingly becoming ever more complex as the geopolitical environment continues on its unpredictable course. Below, we address what we know, what we don’t know, and - most importantly - what we 

The data in mid-March showed the US economy to be stable, with consumer spending strong

 despite continuing uncertainty in the labor market.

 At the same time, inflation appeared to be creeping upwards, with January’s Core PCE reading (the Federal Reserve’s preferred gauge) rising to 3.1%.

The Fed’s revised projections showed higher growth and inflation this year, as well as a higher neutral rate (3.1%).

 However, as Chairman Jerome Powell also noted in the press briefing, “I​​f [the Fed] were ever ​going to ​skip ⁠an SEP, this would be a ​good one, because ​we ⁠just don't know.”

Powell partly attributed the higher inflation reading to the ongoing tariff situation. However, the shadow of the conflict between the US and Iran, which began a few weeks prior on February 28th, also loomed large in the background.

 The meeting minutes recently released show that a growing number of committee members are trending hawkish as progress stalls, implying that a rate hike could be on the table before long.

In his press statement, Powell expressed the view that price shocks, which include both the effect of tariffs and oil supply constraints, are normally a temporary factor. He added that given that the US has seen above-target inflation for five years now, simply discounting them is inadvisable.

The impasse in which the Fed finds itself has been developing since last year. It consists of a combination of countervailing forces. A precarious labor market suggests that rates need to go down, while stubborn inflation makes the Fed wary of calling victory too early.

Data continues to emerge. The March employment figures (+178,000) appear to dramatically reverse the sudden drop in February (-133,000). However, the three-month average shows a more moderate increase of +68,333, which is comfortable enough to maintain employment stability.

Core PCE came in at 3.0% for February, lower than January but still a full percentage point above target.

 While the March headline CPI jumped from 2.4% to 3.3%, reflecting the spike in gas prices owing to the closure of the Straight of Hormuz, Core CPI showed a more modest increase of 2.5% to 2.6%.

While many - including Powell - hope the impact of tariffs and the disruption of the oil supply will be temporary, it remains to be seen how ‘temporary’ the Iranian conflict will be. The Fed’s own models show that sustained upward pressure on the oil price could add to inflation substantially.

Fed official Barkin pointed out in a recent speech that comparisons to the 1970s oil crisis are misjudged, given that the U.S. is now a net exporter of oil. However, inflation is as much a product of psychology as rational market forces.

Currently, the markets are pessimistic about the prospect of lower rates. While the Fed is still projecting one more cut this year, the market consensus for the next downward move is in mid-2027.

The current situation is an analytical nightmare. On the one hand, there is enough data to cherry-pick one’s way to any conclusion. On the other, there is enough instability to upend the most elaborate analyses in a matter of hours.

In such circumstances, it can be more helpful to narrow one’s focus. In the case of the Fed, the guiding light so far has been inflation. As long as Powell is at the tiller, it is likely this will remain the case.

But broadening one’s focus is also important as well. Wider issues such as the impact of AI on productivity and the long-term sustainability of U.S. national debt remain the most important shaping forces for the economy and one’s investment portfolio. Finding the signal is a process of tuning out the noise.

Fed Decision April 2026: At The Crossroads Again

This is not an isolated moment. It is a reminder that portfolio risk runs deeper than any single event. Vanguard recently raised a question that deserves more attention than it received.

 If the logic of concentrating in the best-performing market is sound, they asked, why stop at one country? Why not one sector? One stock?

The answer, of course, is that such an approach would be risky. And yet, many investors are closer to it than they might think. The top ten stocks in the S&P 500 now account for approximately 41% of the index, a level of concentration not seen since the peak of the dot-com bubble, and by some measures exceeding it. Between 1990 and 2015, that share hovered between 18% and 23%. It has nearly doubled in the space of a decade.

The consequences of this concentration are not abstract. In early 2025, when the S&P 500 fell nearly 15%, the top ten stocks drove the majority of the decline. When markets recovered from April onwards, the same group accounted for more than half of the rebound. The ‘index’, in other words, is increasingly a proxy for a handful of mega-cap technology firms, rather than a broadly representative cross-section of the economy.

For investors who hold a large portion of their wealth in a single country or region, this concentration is made worse. The result is a portfolio that looks diversified on paper but in practice moves in line with a narrow set of companies, sectors, and economic cycles.

This brings us to a phenomenon that is well documented in the academic literature but difficult to shake in practice: home bias. Studies of GCC investors, for example, have found that both professional and retail participants exhibit a strong preference for local and regional equities, often at the expense of global diversification. The intuitive response to buy locally has, for many, outweighed the clear benefits of casting a wider net.

This is understandable. Investors naturally gravitate towards what they know. Local markets feel familiar; the companies are recognizable; the currencies are pegged, removing one layer of perceived risk.

However, in a region where equity markets are heavily weighted towards financial institutions and energy, with financials alone accounting for over 57% of the MSCI GCC Countries Combined Index, this familiarity can translate into doubled concentration risk. An energy-sector professional whose personal income, business interests, and investment portfolio are all tied to the same economic drivers faces the prospect of a simultaneous decline across every dimension of their financial life.

2025 has provided a compelling illustration of why geographic diversification works. Through the first half of the year, non-US stocks outperformed their American counterparts by a considerable margin: approximately 12% for international equities, versus roughly 2% for US stocks. This represented one of the largest reversals of the prior decade’s trend, during which US markets led the world by a wide margin.

For those who had grown accustomed to US dominance, this came as a shock. For those who were geographically diversified, it was simply the portfolio working as designed.

The data over longer periods reinforce the point. Analysis by Trustnet, using LSEG and MSCI data, showed that a hypothetical portfolio diversified across multiple regions (the US, UK, Europe, Japan, and emerging markets) was never the top performer in any single year over the past decade. Equally, it never delivered the worst performance. Over a ten-year period, its annualized return surpassed every major region except the United States.

This is the essence of diversification. It is not a strategy for maximizing returns in any given year. It is a strategy for ensuring that no single year, and no single shock, can inflict outsized damage on a portfolio.

The reason geographic diversification works is that economic cycles across regions are not synchronized. When the GCC faces oil price sensitivity, the US may be in mid-expansion. When European markets contract, Asian manufacturing may be accelerating. As HSBC Asset Management noted in its mid-year outlook, the ‘macro anchors’ that once underpinned the global order (stable inflation, predictable growth, fiscal discipline, and confidence in US assets) can no longer be taken for granted.

Research by Bridgewater Associates identifies Japan, India, and Brazil as among the most diversifying markets for global investors, precisely because their conditions are driven by domestic factors rather than US monetary policy or global risk sentiment. Japan’s economy is one of the largest and most independent demand centers in the world. India’s growth is leveraged to a large and expanding domestic consumer base. Brazil’s commodity exports and robust internal economy give it a fundamentally different return profile.

GCC equities themselves have shown correlations of only 0.52 to 0.53 with both developed markets and broader emerging market benchmarks over the past two decades. This makes them a genuinely useful diversifier within a global portfolio. The critical distinction, however, is between using the GCC as one component of a broader allocation and treating it as the default.

Every market carries some form of concentration risk. In the US, it is the dominance of a handful of technology companies. In Europe, financials and industrials carry outsized weight. In the GCC, the concentration is in energy and financial services. None of these are inherently problematic; the risk emerges when an investor’s portfolio mirrors the concentration of their home market without a counterbalance elsewhere.

The GCC is, in fact, undergoing a structural transformation, with more than 170 IPOs raising over $50 billion since 2022, driven by regulatory reforms in Saudi Arabia and the UAE.

The goal of diversification, whether across sectors or geographies, is ultimately about wealth preservation: lowering the correlation between different types of risk so that no single event can jeopardize a portfolio’s long-term trajectory. This is not a case against any particular region. It is a case for ensuring that regional exposure, wherever it may be, is complemented by positions with genuinely different economic drivers.

It is one thing to accept the principle of diversification; it is another to implement it effectively. Ninety One, a global investment manager, forecasts that US equities will return approximately 3.6% per annum over the next decade, roughly on par with Europe, while the UK, Japan, and emerging markets are each expected to deliver upwards of 5% per year. If these projections prove even broadly accurate, the cost of over-allocating to any single region becomes clear.

BlackRock has argued that investing in assets with low correlation, whether due to geography, economic sector, or currency, reduces portfolio risk and diversifies sources of return. Regional and thematic exposure, driven by factors such as demographics and geopolitics, can be constructed with relative ease through modern investment vehicles.

However, geographic diversification alone is not sufficient. A portfolio diversified across geographies but concentrated entirely in public equities remains exposed to sentiment-driven volatility, correlation spikes during crises, and the structural limitations of a public market increasingly dominated by a few large companies. In a companion article, we will explore why the asset class dimension, and specifically the role of private markets, adds a critical further layer of resilience.

This is not a new idea. University endowments, most notably Yale and Harvard, have for decades pursued an approach that combines public equities with significant allocations to alternative investments, including private equity, private credit, real estate, and infrastructure. The rationale is straightforward: by accepting lower liquidity in exchange for exposure to fundamentally different return drivers, these institutions have historically achieved both higher returns and lower volatility than portfolios confined to public markets. Over the past 20 years, endowments with allocations of 30% or more to alternatives have consistently outperformed those without, with lower drawdowns during periods of crisis.

Importantly, alternative investments of institutional quality are typically sourced from developed markets with deep capital pools, strong legal frameworks, and high governance standards. This means that diversifying into alternatives naturally provides geographic exposure to economies and sectors that may be underrepresented in a regionally concentrated portfolio. It is, in effect, a way to address sector, geographic, and asset class concentration in a single step.

The strongest portfolios combine both: exposure to multiple regions with multiple return drivers, across both public and private markets.

Returning to Vanguard’s thought experiment: in 2015, nobody knew which region would outperform over the following decade. The only certainty was that gains in one part of the market could offset losses in another. That is exactly what happened.

The same uncertainty exists today, magnified by trade wars, fiscal imbalances, and the pace of technological change. Investors who anchor their portfolios to what has worked in the recent past, whether that is the US, the GCC, or any single market, are not making a strategic decision. They are making a bet.

A globally diversified portfolio is not a bet on any one outcome. It is a structure designed to perform across many outcomes. In a world where the range of possible outcomes has widened considerably, that structure is more valuable than ever.

At The Family Office, we design portfolios built for exactly this environment. Our approach spans geographies, asset classes, and investment horizons, combining exposure to global markets with access to private equity, private credit, and real estate opportunities that have historically been available only to institutions.

For investors across the GCC, we provide the structure, the access, and the expertise to build portfolios that do not depend on any single market performing well. Portfolios designed not just to pursue returns, but to hold up when markets do not.

If you would like to discuss how your portfolio is positioned for the environment ahead, we would welcome the conversation.

The Hidden Cost of Familiarity: Why Geographic Diversification Matters More Than Ever

This tension is not new. What is new, however, is the scale and urgency with which it is being felt, as a generation of heirs defined by purpose, technology, and social impact steps into stewardship of wealth built by founders defined by discipline, risk-tolerance, and return.

The Opportunity: A Generation Motivated Differently, Not Less

It would be a mistake to read the next generation's priorities as a lack of ambition. They are not disengaged from wealth, but engaged with it on entirely different terms. Where prior generations measured success through financial returns and business growth, younger heirs increasingly measure it through impact.

According to the UBS Billionaire Ambitions report 2025, 67% of billionaires hope to see their children pursue their own passions, and 55% want them to use wealth to create a positive impact on the world.

These are not the aspirations of a generation content to coast. They are the aspirations of a generation that wants to matter and sees capital as a tool for transformation rather than an end in itself. The opportunity for families lies in recognizing this shift not as a threat to legacy, but as its evolution.

The Danger: When Passion Becomes Dissipation

Yet aspiration without structure is a liability. Research on inherited wealth is sobering: fortunes are frequently diminished through poor investment decisions.

 The absence of financial literacy, investment discipline, and governance frameworks creates conditions in which even the most well-intentioned heir can erode decades of accumulated wealth.

The risk is compounded when generational values diverge without a shared language to bridge them. An heir committed to impact investing may make allocations that the founding generation views as speculative or ideologically driven. A founder skeptical of impact-driven allocations may withhold capital from initiatives that are, in fact, sound long-term investments. Without structure, neither party is wrong, but both are operating in the dark.

This is the point at which passion begins to resemble dissipation, not because the intentions are poor, but because the framework is absent.

The Governance Bridge: Building a Shared Vision

The most effective families do not resolve this tension by choosing between old-money discipline and new-generation values. They resolve it by creating a shared framework; a governance structure that allows both to coexist and reinforce one another.

This begins with a deliberate conversation about the purpose of the estate. Before any capital is allocated, families benefit from defining, collectively, what the wealth is for. The answers to what the wealth is truly for will vary across families, and often within them.

What matters is not unanimity, but that the family has a structured process for surfacing disagreements and arriving at alignment. A well-designed family governance framework transforms a potential source of conflict into a source of cohesion.

The Role of an Independent Advisor: Alignment Before Allocation

Even the most well-intentioned families struggle to navigate these conversations without external support. The dynamics of inheritance make it difficult for families to hold the kind of frank, structured dialogue that governance requires.

This is where a trusted family office plays a critical and often underappreciated role. Acting as an objective third party, The Family Office helps families align on values before making decisions about capital.

Conclusion: Legacy Is Not Preserved by Constraint Alone

The families that successfully transfer wealth across generations are not those that impose the strictest controls on their heirs. They are the ones that do the harder work of building shared understanding and creating a framework in which the next generation feels genuinely invested in the stewardship of what has been built.

Passion, properly structured, is not the enemy of legacy. It is its most powerful continuation. The task is to ensure that structure is in place before the capital is in motion.

Passion or Dissipation? How to Fund the Next Generation Without Spoiling Them

As Abdulmohsin Al Omran, Founder and CEO of The Family Office, noted, investing today resembles navigating the sea. Opportunities are vast, but success depends on clarity of vision, discipline, and the ability to understand the underlying currents of the global economy. Within that context, Dr. Mohamed El-Erian, Chairman of Gramercy Fund Management, offered a framework for understanding the unusual dynamics shaping the global outlook.

His main message was that the global economy is moving into what he described as a “geoeconomic world order”, where economic outcomes are increasingly shaped not only by traditional market forces but also by geopolitics, national security considerations, and domestic political priorities.

The starting point is a clear contradiction. The past year felt highly unstable, yet economic and market outcomes were strong.

Markets navigated a constant flow of geopolitical and policy-driven developments. Trade tensions, tariff discussions, and shifting alliances dominated the global conversation. At the same time, two pillars that once anchored the global economic system began to weaken: globalization and the policy framework often referred to as the Washington Consensus.

Despite this turbulent backdrop, the results were unexpectedly resilient. Global growth remained solid at around 3.3%, the United States continued expanding at 2.4%, and emerging markets recorded growth of approximately 4.4%. Financial markets also delivered strong returns, with global equities rising by roughly 21%.

Two powerful forces helped explain this resilience. The first was a surge in investment linked to artificial intelligence, as companies and investors accelerated capital spending around AI technologies. The second was China’s ability to redirect trade flows, expanding exports to other markets even as shipments to the United States declined.

Together, these two drivers helped sustain economic momentum despite the broader uncertainty surrounding geopolitics and policy.

Looking ahead to 2026, the forecasting environment has changed in an important way. The global economy no longer appears to follow a single dominant path. Instead, several plausible outcomes exist simultaneously.

Economists describe this type of environment as a “multimodal distribution”, where different scenarios carry meaningful probability rather than one central outcome dominating expectations.

The baseline scenario, representing a continuation of current conditions, carries roughly a 50 percent probability. Alongside it sit two tail risks, each with about 25 percent probability.

The positive scenario centers on faster and broader AI adoption, which could lift productivity and allow the global economy to manage challenges such as high debt levels, protectionism, and pressure on central banks.

The negative scenario reflects the risk of stagflation, where economic growth slows while inflation rises, creating a difficult environment for policymakers and investors alike.

A distribution where the central case holds only half the probability is unusual. With both positive and negative outcomes carrying significant weight, uncertainty becomes more pronounced and investors must be prepared for a wider range of possibilities.

Volatility, Dispersion, and Fragmentation

In El-Erian’s view, this environment leads to three defining features for markets in the period ahead: volatility, dispersion, and fragmentation.

Volatility is likely to remain elevated, as markets respond to frequent and often sudden news related to geopolitics, trade policy, technological developments, and domestic political decisions. These sharp, news-driven price movements can easily push investors toward reactive decisions if portfolios are not properly structured.

Volatility, in turn, contributes to greater dispersion across markets. As policy decisions, geopolitical developments, and economic conditions diverge, the gap between winners and losers across countries, sectors, and companies is likely to widen. What economists often describe as a “K-shaped” pattern may become more pronounced, with some parts of the economy accelerating while others lag behind.

At the same time, the global economic system itself is becoming more fragmented. Trade relationships are being rewired, supply chains are shifting, and geopolitical considerations are increasingly influencing investment flows.

Together, these forces are reshaping the investment landscape in ways that require a different approach to portfolio construction.

In a fragmented and volatile environment, the sources of investment returns also evolve.

In recent years, many investors benefited from strong secular themes, such as the rapid rise of AI and technological transformation. These long-term trends generated significant returns across markets.

Looking ahead, however, these secular themes may play a less dominant role in driving returns. Instead, two other sources of returns are likely to gain importance.

The first comes from structural opportunities, where investors are compensated for addressing gaps or inefficiencies in markets. Private credit in emerging markets illustrates this dynamic. Many emerging economies today sit where advanced markets were more than a decade ago, with strong companies seeking financing while traditional lenders retreat. Providing capital in these situations can generate attractive returns while supporting the development of local capital ecosystems.

The second source comes from opportunistic investments. Periods of volatility often create temporary dislocations, where asset prices move beyond their fundamentals. Investors with liquidity and flexibility can step in and capture attractive opportunities.

As a result, portfolios may increasingly combine structural opportunities with the flexibility to capture opportunistic investments when markets overshoot.

In a world where outcomes are less predictable, investment success depends less on forecasting the future with precision and more on the ability to execute effectively across multiple scenarios.

El-Erian emphasized three characteristics that become essential in such an environment.

Resilience ensures that mistakes remain manageable rather than catastrophic, allowing portfolios to recover from unexpected outcomes.

Optionality requires maintaining flexibility and an open mindset, recognizing that the global economy is evolving in ways that are not always predictable.

Agility allows investors to move quickly when opportunities emerge, particularly during periods of market dislocation.

Equally important is the discipline of scenario planning. Investors should consider multiple possible outcomes in advance and determine how portfolios would respond to each scenario before markets force decisions under pressure.

In an environment defined by volatility and dispersion, the ability to identify the right opportunities also increasingly depends on manager selection. As gaps widen between winners and losers across sectors and markets, selecting managers with strong expertise, disciplined processes, and the ability to navigate complex environments becomes a key driver of investment outcomes.

The global economy is moving through a complex transition. Geopolitical shifts, technological transformation, and evolving policy priorities are reshaping the investment landscape.

For investors, the challenge is not simply forecasting the destination of the global economy. As El-Erian noted, the world is likely navigating a bumpy journey toward an outcome that remains uncertain.

Preparing for that journey requires portfolios built with resilience, optionality, and agility, supported by disciplined execution and thoughtful manager selection.

In a world defined by volatility, dispersion, and fragmentation, those principles may prove essential for navigating the sea of global markets.

The 2026 Paradox: Navigating Volatility, Dispersion, and Fragmentation

When so many experts are at odds over the larger-scale issues, it can be unsettling as an investor looking to make decisions about one’s own portfolio. In this article, we attempt to clear a path through the chaos, and separate the temporary from the substantial.

While the ultimate decision to hold rates may give the impression that we are nearing the endgame in the Fed’s long battle with inflation, the reality is more complex. Fed Chairman Jerome Powell put it most succinctly when he remarked that whether the current rate is too high, too low, or neutral is ‘in the eye of the beholder’.

The Fed minutes released earlier this month show the cracks have deepened since the previous meeting. Governors Waller and Miran ultimately dissented from the decision - a formerly rare exception to the “Governor Consensus” that is now becoming routine

 - arguing that rates should be lowered. Meanwhile, other members suggested the possibility of rate 

 later in the year, should inflation remain elevated.

While the overall tenor of the discussion points towards a general reluctance to cut rates

, the core of the disagreement remains - namely, whether the risks to the labor market are higher than the risk of continued or resurgent inflation.

Part of the issue with interpreting the data is not so much the lack of it, but the sheer volume of competing signals.

In a speech in late February, Governor Waller went on record saying that disappointing February employment numbers would give a strong indication as to whether the economy was on a solid footing or not.

 While January employment figures came in stronger than expected at 126,000 new jobs, February’s results showed a decline of 92,000 - presumably giving Waller his answer.

 The latest BLS revisions further show monthly growth of just 15,000 new jobs in 2025, a minuscule figure in a country of approximately 170 million workers.

Looking at inflation, the picture is also ambiguous. The January headline CPI figure (2.4%) is the lowest reading in 5 years.

 However, Core PCE inflation remains stubbornly above target, moving from 2.9% to 3.0% in December.

Each side has its own interpretation. The dove camp argues that the inflationary impact of tariffs is temporary, and that true inflation is actually lower.

It furthermore sees the rise of AI as creating ‘structural disinflation’ - keeping wage costs from rising by boosting efficiency - that allows for lower rates and higher growth at the same time.

 While there is some research to back up this claim

, as well as historical precedent (the 1990s and the internet), it is still early days.

The hawk camp believes that the current inflation data cannot be simply dismissed, and that AI investment could lead to economic overheating, at least in the short-term, as investment in datacenters and infrastructure booms and productivity gains fail to materialize as quickly as expected.

Indeed, leading hawk Vice Chair Barr has argued that AI could push the neutral rate (also known as r*) higher than the former range of 2.5% - 3.0%.

Meanwhile, the effect of the One Big Beautiful Bill Act (OBBBA) and escalating tensions with Iran are adding to the confusion, with arguments to be made by both sides that they reinforce their respective stances.

The lack of consensus among experts indicates that we as investors should be wary of holding strong convictions in either direction.

One thing is clear, however: the longer-term impact of Artificial Intelligence on the workforce has the potential not just to influence monetary policy, but challenge fundamental assumptions on which it is based. If technology has - in fact - decoupled output from headcount, this implies a not only a shift in how the Fed uses rates in the future, but also the structure of the economy itself.

The Eye of the Beholder: Fed Decision March 2026

While macroeconomic forecasting remains complex, Dr. Bisat offered a constructive outlook. He assigned a greater than 50 percent probability that the global economy will end up in a "good place" in 2026. This view is supported by several converging tailwinds that favor smaller, open economies.

The global system appears to be moving toward an environment of improving liquidity and gradually lower interest rates, without a renewed surge in inflation. At the same time, an orderly weakening of the US dollar is improving competitiveness for economies linked to the greenback. Dr. Bisat views this dollar adjustment as a cyclical rebalancing after a prolonged period of strength, rather than the beginning of a structural decline.

Lower energy prices are also providing support for global consumption and investment. Meanwhile, the shifting landscape of global trade has proven resilient

than many anticipated during recent tariff disruptions. Rather than collapsing, trade flows are adjusting. We are witnessing a compositional shift that is transferring manufacturing capacity and export momentum to new growth hubs across the emerging world, particularly in Mexico, India, Vietnam, and Bangladesh.

In addition, sustained investment linked to artificial intelligence represents an important structural force. For emerging economies that can absorb new technologies efficiently, this may support higher productivity and long-term growth potential.

While emerging markets have certainly benefited from these external tailwinds, their current strength is not merely a product of good fortune. External conditions alone do not explain their resilience. Dr. Bisat emphasized a deeper structural shift that may not yet be fully reflected in broader market perception. Economic policies across much of the emerging market complex have improved meaningfully over the past decade.

Monetary policy is now more credible. Inflation management has strengthened. Fiscal discipline is more evident, debt burdens in many cases have been reduced, and institutions are broadly stronger. This policy maturation has allowed these economies to navigate post-pandemic shocks, tariff tensions, and geopolitical uncertainty more steadily than many had anticipated. Two years ago, few would have expected emerging markets to absorb policy tightening and global fragmentation as they have. Yet from both an economic and market perspective, many have demonstrated resilience beyond expectations.

In this rewiring of the global order, not all emerging markets will perform equally. While broad resilience is visible across the complex, differentiation matters. Dr. Bisat identified four specific criteria that define potential winners in today's fragmented landscape.

First is scale. Larger economies like India and Indonesia possess deeper domestic markets that help maintain autonomy and absorb external shocks. Scale provides a foundation of domestic resilience that smaller economies often struggle to replicate.

Second is geopolitical neutrality. Nations that successfully navigate global polarities without becoming overly aligned with one bloc are attracting more diversified capital flows. In a world where choosing sides can create vulnerability, strategic flexibility has become a competitive advantage. Saudi Arabia, Mexico, Brazil, and India exemplify this balancing approach, navigating complex relationships while preserving their national interests.

Third is capital strength. Countries with strong balance sheets and sufficient domestic savings are less dependent on volatile external financing. Being “hostage to capital markets” as Dr. Bisat noted, limits policy flexibility. Economies that can fund their own development retain greater stability and decision-making autonomy.

Fourth is the capacity for rapid technological adoption. The ability to absorb and implement new technologies can raise potential growth over time. This advantage is not evenly distributed across regions, and while it may be more challenging in some parts of Africa, it remains highly relevant for Southern Europe, Eastern Europe, and Northern Asia.

Within this framework, the Gulf region, particularly Saudi Arabia, aligns strongly with these four vectors. Beyond the Gulf, Dr. Bisat highlighted Morocco as a clear example of successful positioning, pointing to its integration into European supply chains and its expanding automotive manufacturing hub.

He also expressed a constructive view on Egypt. Despite structural challenges and continued reliance on external financing, Egypt appears to be advancing reforms, attracting renewed investment flows, and benefiting from tourism and remittances. If it succeeds in reducing its dependence on external funding over time, its trajectory could strengthen further.

By contrast, he described Turkey as occupying a difficult middle ground. While not in crisis, it faces persistent inflation, slower reform momentum, and structural constraints that limit forward movement.

Addressing the inevitable questions surrounding the US dollar, Dr. Bisat offered a measured perspective. He views the current softening of the dollar as cyclical rather than structural. While the dollar had become significantly overvalued over the past 25 years, contributing to macroeconomic imbalances, its current weakening appears more like a rebalancing than the beginning of a structural decline.

The dollar continues to benefit from structural advantages, including relatively strong US growth, more favorable demographics compared to other developed economies, and the depth of its capital markets. Dr. Bisat suggested that the dollar may experience further cyclical weakness from current levels. However, the idea of a structural collapse, in his view, is overstated. At present, no other currency combines the macroeconomic scale, institutional depth, and geopolitical influence required to replace it.

He also addressed speculation around alternative currency arrangements, including BRICS-linked proposals. While such initiatives are conceptually interesting, he emphasized the practical challenges of building a functional currency framework among economies with different structures, fiscal positions, and institutional systems. For now, the dollar remains central to the global monetary system.

Because the dollar remains fundamentally robust, Dr. Bisat expressed support for the currency pegs used in the Gulf. These pegs have provided the region with stability, credibility, and policy discipline. They have reduced exchange rate uncertainty and reinforced macroeconomic management. As the dollar weakens, Gulf economies can benefit through improved competitiveness and real exchange rate adjustment. In his view, the existing framework has served the region well, and there is no clear reason to abandon this framework.

The key takeaway is not that all emerging markets will outperform. It is that emerging markets have matured structurally. The opportunity lies in identifying countries that combine scale, geopolitical balance, capital strength, and technological adaptability. In this environment, broad allocation is less effective than targeted selection.

At The Family Office, this institutional, selective approach underpins our investment philosophy. By focusing on structural fundamentals rather than cyclical headlines, we seek exposure to resilient economies, reform momentum, and long-term value creation.

Navigating today’s global environment requires more than reacting to volatility. It requires recognizing where resilience is taking root and deploying capital accordingly.

Emerging Markets in 2026: Resilience, Reforms, and the New Global Winners

The dream of a carefree retirement has evolved, as longer life expectancies create friction for both aging parents and their potential heirs. Medical advances are allowing individuals to live longer, but this extended life span also means that inheritance plans may be delayed much longer than heirs anticipate. As these dynamics unfold, the role of comprehensive financial planning becomes all the more crucial.

The Shift: The Great Wealth Transfer… Later Than Expected

It’s widely recognized that baby boomers and older generations hold an extraordinary amount of wealth.

 At least $5.9 trillion are projected to be passed down to future generations in the coming years.

 While this transfer is often framed as imminent, the reality is that it may happen much later than expected.

Medical advances are allowing people to live longer. In fact, 44% of billionaires expect to live 

 For these wealthy individuals, the expectation of transferring wealth sooner is fading fast.

This extended longevity has serious implications for inheritance planning. While the assets are often earmarked for children or grandchildren, the practicalities of passing on wealth are complicated by the fact that the parents need that wealth for their own extended care and quality of life. What was once a clear path to inheritance is now blurred, leaving both parents and heirs facing an uncertain financial future.

The Conflict: The “Bank of Mom & Dad” Trap

For many heirs, the expectation of financial support from parents, whether in the form of gifts, loans, or outright inheritances, is as certain as the sunrise. The “Bank of Mom & Dad” has become a trusted source of financial security.

But what happens when this source starts drying up? Rising medical costs, long-term care, and the need to fund experiences that enrich the parents’ extended retirement years all eat away at what might otherwise have been passed down.

Parents who have not communicated their financial trajectory risk creating dangerous assumptions in the minds of their heirs. When children assume that they will receive an inheritance in the near future, they may make financial decisions based on false expectations. This can lead to disappointment, strain, and even conflict when the inheritance is delayed or redirected to fund the parents’ own needs, whether that’s for healthcare or for pursuing their own version of retirement; traveling, enjoying hobbies, or creating lasting memories.

The Planning Necessity: Prioritizing Self-Sufficiency

It’s clear that the financial needs of the older generation must come first. For wealth holders, planning for an extended retirement is not just about enjoying the years ahead, but also about ensuring they don’t burden their children or other heirs. Parents should prioritize their own financial security by budgeting for long-term care, healthcare, and any other anticipated needs in their retirement years.

Having a plan for this will allow parents to demonstrate financial clarity and self-sufficiency to their family members. This open communication can go a long way in setting realistic expectations for heirs and preventing misunderstandings about the wealth transfer. While it may not be easy to address these uncomfortable issues, it is essential to help heirs understand that their inheritance may not materialize as quickly as they’d hoped, if at all, if it isn’t planned for.

The Family Office: Creating a Comprehensive Financial Plan

This is where a trusted financial advisor comes into play. By building a comprehensive financial plan that prioritizes the older generation’s lifestyle first, The Family Office helps parents maintain their lifestyle throughout their extended retirement. Only after addressing this will a clear plan emerge regarding what, if anything, is available for gifting. The result is clarity and peace of mind for both the parents and their heirs.

As life expectancy continues to rise, the dynamics of wealth transfer are evolving rapidly. The longevity dilemma poses a unique challenge for both the aging generation and their heirs. Through comprehensive planning, transparent communication, and prioritizing self-sufficiency, families can navigate these challenges and ensure a smooth transition, whenever that transfer of wealth may occur.

In this new era, financial planning isn’t just about passing on wealth, it’s about preserving well-being, fostering clarity, and building a lasting legacy that serves the entire family for generations to come.

The Longevity Dilemma: Managing Wealth When Retirement Lasts 40 Years

Income has returned to the center of portfolio construction. Yet the ways investors generate it have changed. Traditional portfolio frameworks, including the long-standing 60/40 model, have struggled to deliver the “40” allocation with the consistency investors once expected. Public fixed income, once seen as predictable, has become more sensitive to interest rate shifts, inflation concerns, and policy uncertainty. Yields may appear attractive at times, but price volatility and duration risk have made outcomes less stable.

Against this backdrop, private credit has moved from the sidelines into a central role. What was once considered a niche allocation is now a key source of financing for the real economy. For investors looking ahead to 2026, private credit is no longer just an income strategy. It reflects a deeper change in how companies are funded.

At The Family Office, we see this as a structural shift rather than a short-term response to market conditions.

For many years, banks were the main providers of loans to mid-sized companies. That role has gradually changed.

Since the global financial crisis, banks have faced stricter capital rules and higher regulatory requirements. While these changes strengthened the banking system, they also reduced banks’ appetite for certain types of corporate lending, particularly in the middle market where loans tend to be less standardized and more balance-sheet intensive.

As a result, many healthy businesses have found it more difficult to secure financing through traditional banking channels.

Private credit has stepped in to fill this gap. Rather than competing directly with banks, private lenders have taken over areas banks are no longer focused on, offering tailored financing to companies that value certainty of execution, speed, and long-term partnership.

This is not a temporary development. As regulatory constraints remain in place, private lenders are becoming a permanent part of the corporate financing landscape.

One reason private credit has gained traction is the way income is generated and protected. Most private credit strategies focus on senior secured loans. These sit at the top of a company’s capital structure and are backed by collateral, placing lenders first in line for repayment if a borrower encounters financial difficulty.

Many of these loans are also floating rate. This means income adjusts as interest rates change, helping reduce sensitivity to rate volatility. As interest rates are expected to decline modestly from recent levels, private credit continues to benefit from an embedded illiquidity premium, with contractual coupons that remain attractive relative to public fixed income markets.

According to Morgan Stanley, global private credit assets under management exceeded $3 trillion in 2024, up from around $1 trillion a decade earlier, and are expected to continue growing in the years ahead.

The combination of seniority, security, and floating-rate income has positioned private credit as an attractive option for investors seeking yield without taking on the full risk profile of equity ownership.

Private credit is often described as resilient, not because it avoids risk, but because of how risk is managed.

Unlike public bond markets, private lending is relationship-driven. Loan agreements typically include covenants, regular reporting, and ongoing engagement with borrowers. This allows lenders to identify potential issues earlier and, where possible, work with management teams to protect value.

While defaults can occur in any lending environment, senior positioning and active monitoring have historically supported stronger recovery outcomes compared to unsecured or covenant-light credit.

Looking ahead to 2026, default rates in private credit are expected to rise gradually as economic conditions remain uneven across sectors and regions.

 Even so, defaults are likely to remain below long-term historical averages.

In this environment, outcomes are likely to diverge more widely across the private credit universe. Variations in loan structure, underwriting discipline, and portfolio construction are expected to contribute to greater dispersion in returns. This makes the framework within which capital is deployed increasingly important.

Despite its growth, private credit remains difficult to access directly.

Many of the most attractive lending opportunities are sourced through long-standing relationships and private networks. Deal quality, borrower resilience, and downside protection can differ significantly across managers, leading to wide dispersion in outcomes.

For investors, diversification across borrowers, sectors, and lending strategies is essential. So is careful manager selection.

At The Family Office, private credit is treated as part of a broader portfolio strategy. Client capital is aggregated to access established credit managers with a focus on disciplined underwriting and structural protection. The objective is not simply to generate yield, but to do so with consistency across market cycles.

As we begin 2026, income remains a core portfolio requirement. Public fixed income continues to play a role, yet its behavior has become less predictable during periods of volatility.

Private credit offers a different approach. Income is often supported by contractual cash flows and senior positioning, while its continued growth reflects lasting changes in how capital is provided to businesses rather than short-term market dislocations.

This is not about forecasting interest rates or timing the cycle. It is about aligning portfolios with how financing operates today.

At The Family Office, we help investors build private credit allocations designed to generate reliable income while maintaining a disciplined approach to risk. In a more complex investment environment, private credit has become an essential component of modern portfolio construction.

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