Recently, in an interview, Nicolai, CEO of the Norwegian government's Global Pension Fund Tangen was unusually calm. When it comes to the impending trade war and the potential global recession and shrinking asset values, his strategy is surprisingly simple – one word: "Boil"!

Doesn't that sound a bit counterintuitive? But in fact, there is a deep meaning behind it.

What is the strategy of "boiling"?

The so-called "boiling" is actually to stay calm and stand still. Tangen believes that during periods of market volatility, frequent portfolio rebalancing can bring more risk than gain. On the contrary, stick to a long-term investment strategy and not be swayed by short-term fluctuations, but can better weather the storm.

You can imagine sitting on a boat in the middle of a storm rather than jumping ship in a hurry. Sometimes, the best course of action is not to act.

Why "boil"?

Long-term perspective: The Norwegian Government Global Pension Fund is one of the world's largest sovereign wealth funds, with more than $1 trillion in assets under management. Its goal is to fund future pensions and therefore focuses more on long-term returns rather than short-term fluctuations.

Reduced transaction costs: Frequent buying and selling not only increases transaction costs, but can also lead to missed market rebound opportunities. In contrast, "boiling" can avoid these unnecessary expenses.

Historical data supports: Historically, many major economic crises have eventually passed, and markets have gradually recovered. Those who endure in a crisis are often rewarded well.

The "boiling" strategy adopted by the Norwegian government's Global Pension Fund is actually a prudent investment approach based on a long-term perspective. In the face of the uncertainty and market volatility brought about by the trade war, they chose to remain calm and remain unmoved.

There's not much investors can do?

Tangen said in an interview:

Now in the world, it can be said that the hot war, the cold war, the technology war, and the trade war are all going into battle together, and the global supply chain, trade system, and geopolitics are all splitting at an accelerated pace. In the face of this complex and chaotic situation, he said something quite realistic: "There is not much that investors can do." This sounds a bit "Buddhist", but it is actually a sober judgment based on reality.

His strategy: long-term + diversification. Two words: stay up.

More precisely, it is to maintain a long-term investment vision and adhere to diversified allocation. He believes that history has repeatedly proven that markets usually repair short-term volatility and trauma as long enough.

What does asset allocation look like in reality?

Interestingly, although Tangen advocates "no toss", the asset allocation of this fund is actually very representative: about half of the assets are invested in U.S. stocks and bonds, mainly stocks; At the same time, it also has a large exposure to the European market. However, due to the average performance of the European economy this year and the impact of geopolitical risks, the overall performance of the fund was basically flat.

But Tangen also issued a rather heavy warning:

If the global trading system were to be further fragmented by tariff barriers, the global economy would be hit and inflation would rise again, the fund could face a loss of more than a third of its value – a whopping $600 billion!

This number is not intimidating, it reminds us that even if you choose to "do nothing", you can't ignore the existence of systemic risk.

So the question arises: is it really reasonable to do nothing?

Tangen's approach may seem negative, but it is actually a passive but rational way of coping. After all, in an environment of high uncertainty, "making fewer mistakes" is sometimes more important than "making more money". But for ordinary investors, is there any other option besides "boiling"? Of course!

What else can investors do?

Optimize the structure: On the basis of maintaining diversification, moderately tilt towards anti-inflation, safe-haven or policy-supported sectors, such as gold, energy, defense, rare earths, etc.

Dynamic Balance: Regularly adjust the asset allocation ratio to avoid a single market or too high a proportion of assets, thereby reducing extreme risks.

Focus on geopolitical dividends: Some industries may benefit from fragmentation, such as localized manufacturing, domestic substitution, independent and controllable fields.

Enhance defensive positions: Increase holdings in companies with stable cash flow and high dividend rates, such as utilities and consumer leaders.

｜对普通人来说，“熬”可能太难了

For most ordinary investors, it is natural to be anxious in the face of wild market volatility and potential asset shrinkage. After all, everyone's money does not come from oil revenues, but from hard-earned savings. We may be concerned about:

Will the market keep falling?

Will everything really get better?

What if you can't wait for recovery?

These questions are all real and important.

Mackintosh's warning: This could be a new era

Investment expert Mackintosh makes a more grim point: we may now be entering a new economic era.

He believes that the impact of the Trump administration's high tariff policy on the economy may be more serious than the short-term decline in the stock market. In the future, we may have to face more downward pressure than just a correction in equity prices.

He also mentions a sobering historical contrast:

In the 19th century, if you bought stocks, you could still lose money by the end of the century – because the stock price was even lower than the starting point at that time. The returns of the entire century have been almost entirely supported by dividends.

Sound familiar? Now, as President Trump pushes for high tariffs similar to the "Gilded Age", many are starting to worry: Will history repeat itself?

If this is the case, then we need to be prepared: the market environment is likely to be more volatile and asset prices are likely to fall sharply.

What should investors do? Since we can't "wait decades" like the state, and we can't ignore systemic risks, what can we do?

Jingtai recommends that you do the following:

Be rational and don't panic: Market volatility is the norm, and panic selling is often the worst option.

Focus on cash flow rather than price: In times of uncertainty, prioritize companies with stable dividends and strong profitability.

Moderate defense: You can appropriately add some anti-inflation and safe-haven assets, such as gold, treasury bonds or energy and resource assets.

Open positions in batches and control the rhythm: don't do all at once in, don't be completely short, and use the method of "regular investment + dynamic adjustment" to deal with the unknown.

Look for structural opportunities: Some industries will benefit from this environment, such as domestic substitution, high-end manufacturing, defense and military industry, rare earths, etc.

Should investors "boil" or "move"?

Earlier we talked about the CEO of Norway's sovereign fund Nicolai Tangen's view: the market is too chaotic, it is better to "do nothing", hold for a long time and be patient. But what if you're not a sovereign wealth fund, but a regular investor?

For retail investors, another option is active investing. Compared with the huge "oil tankers" of Norway's sovereign fund, our "small boats" can be more flexible to turn around and change courses.

Mackintosh pointed out that when market sentiment is high and funds are frantically pouring into certain hot themes (such as AI and new energy), actively adjusting the position structure and avoiding bubble sectors have the opportunity to outperform the market.

But there's also a big premise: you have to take the time to research, you have to be judged, and you have to be able to execute.

Tangen himself actually questioned this approach: "Even the brightest investors with unlimited resources often don't time the market well. In other words, active investing sounds beautiful, but it's not easy to do. You need to keep learning, stay calm, and avoid being distracted by the noise of the market.

Active vs. Passive? In fact, you can "bet on both sides"

So which path should you choose? In fact, instead of black and white, we can come to a compromise strategy:

Allocate a part of defensive assets, such as gold, treasury bonds or high-dividend stocks, as a "ballast stone";

Retain a part of flexible funds to capture structural opportunities, such as policy-supported high-end manufacturing, domestic substitution, rare earths, etc.;

Regular investment + dynamic balance: use long-term thinking to lay out index funds, and at the same time appropriately adjust the industry weight according to market changes.

In this way, we can not only "survive" the fluctuations, but also "move" the opportunity.