I work in a pension fund. And pension funds, as well as sovereign wealth funds, which are like pension funds for an entire country, need to have a long view. The liabilities can stretch-out for twenty or thirty years. And a lot can happen in between. What happens in-between is entered, of course, on how the markets will behave. But behind the long term trends the markets are things like demographics, changes in demand due to the adoption of new technology, and retirement. In some ways, it is easier to assess these risks that the risks emerging from shorter term gyrations in the final markets.

Demographics can be like a slow motion tidal wave that washes over society. Look at how our institutions have changed as the baby boomers moved into school age (remember split sessions as elementary schools become overcrowded ) and then college age, and then became home buyers.  And now as they move into retirement age of dissaving, of moving to Florida, and consuming more and more health care resources.

The thing about demographics is that you get plenty of warning. If the driving issue for risk is what twenty year-olds are up to, you get to know how many twenty year-olds you will be dealing with twenty years ahead of time. (Excluding immigration.) Which means you have a pretty good head start in knowing what lies ahead for as people retire. The same is true about climate change. We have a pretty good read on the direction, if not the magnitude, of climate change looking out twenty and thirty years. Technology is not so easy, because we can't always get a read on what might be coming down the pike. But when it comes to major trends for the adoption of technology that has made it to the market, for example, autonomous cars or alternative energy, we can assume an adaption rate and get a good sense of where things will be in ten or twenty years. 

Another thing that comes from the long term trends is a lot more concerning: social revolt. Even if it doesn't happen in the U.S., we will feel the collateral damage if it sweeps other parts of the globe.