Bridgewater Associates examines whether decades of rising global profit margins can continue after unusually favorable conditions for corporations. Margin expansion drove about half of developed world equity returns over 20 years, but fading globalization, weaker labor cost advantages, and shifting policy could challenge profitability.
Peak Profit Margins? A Global Perspective
Greg Jensen, rayan Atul Na
Article
1 Pages
Key Takeaways
Margins Drove Returns: Rising profit margins accounted for about half of developed world equity returns over the 20 years leading to 2019
US Returns Depend: Bridgewater estimates US equities would have been roughly 40% lower without the secular margin expansion accumulated over the prior 25 years.
Globalization May Fade: Globalization accelerated after 1990 and China joined the WTO in 2001, but Bridgewater finds the trend was already flattening by 2019
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