Book Extract | The New Rules of Investing: Essential Wealth Strategies for Turbulent Times by Mark Haefele and Richard C. Morais

Let me give you a taste of what I do. In October 2022, UBS took over the entire five-star hotel the Fontenay in Hamburg, Germany, so that forty highly accomplished billionaire clients, who had flown in from around the world for the event, could have a safe and private place to network with their peers. It was such an important occasion the whole congress was carefully orchestrated and hosted by the bank’s exceptionally talented wealth

INTRODUCTION

management president, Iqbal Khan, who also happens to be my boss. Iqbal, an auditor by trade and by then one of the best-connected private bankers in the world, had choreographed every detail and handpicked every guest in the room. I was on set to interview a panel of global experts on the butterfly effect of geopolitical issues that were then dominating the headlines.

November was just days away, but it was, I recall, so warm that even the ducks on the Aussenalster Lake didn’t know whether they should stay put or fly south. They were not the only ones who were befuddled. If I had to give you one takeaway from this gathering of intensely wealthy and influential people, a conversation repeated week after week when I met with them privately, it is that the world has somehow changed.

Some of the commentary was sobering. While I cannot reveal the identities of who was in attendance, a comment I heard from a former president of an EU country while I was moderating that morning’s sessions made me sit up. This former president claimed that the war between Russia and Ukraine would last for years, and Russia wouldn’t be allowed back into normal relations with the EU for at least twenty years after Putin had left the scene.

I instantly pivoted toward my audience and underscored the need to rethink the possible longer-term consequences of a lasting war in Europe. Over the course of three days, while I was having one-on-one meetings with our clients, learning how I could help them achieve their goals, we heard from the industry and government leaders onstage. From well-connected sources in Asia and the United States, we learned that mainland China, outwardly supportive of Russia, was, at that point, being careful not to overtly cross America’s red line by busting sanctions and providing Russia with material support, even while we all had a keen eye on mainland

China’s relations with Taiwan.

The chart showing the Russian markets’ brutal plummet since the invasion was sobering, and a harbinger of what would probably happen to global markets if hostilities erupted in the South China Sea, disrupting the far more important Pacific Rim economies. That’s what my team and I do: we look at the markets in a judgment-free way, putting aside all the political

xii

INTRODUCTION

or moral ramifications of the hypothetical scenario we’re entertaining, and instead ask ourselves, Are our clients’ portfolios robust enough to withstand whatever shock the world might throw at us?

We were specifically asking ourselves: What portfolio hedges do we have in place to blunt the fallout of such a catastrophic Pacific-basin war and disruption? But there was also information exchanged leaning toward the upside.

The silver lining of the Russia-Ukraine war was that Europe was rapidly weaning itself off Russian oil and gas and furiously building up its green-energy infrastructure. Just days after our event, as if to underscore this point, the French senate passed legislation requiring the nation’s large parking garages to put solar panels on their roofs, with one stroke legislating into existence some eleven gigawatts of homegrown energy, equal to the output of ten nuclear power plants.³

From the brilliant scientists flown in from Boston, we heard that the process of creating cutting-edge immuno-oncology drugs theoretically capable of eradicating certain cancers was migrating, even at the initial stages of discovery, from the laboratory to the laptop. We heard futurists and a Nobel laureate in economics riff about the future of work, about productivity, and about how cities themselves need to be reinvented for the new way people want to work.

The concept of impact investing, as a means to become a steward of the planet, was another topic that frequently came up. Despite the dire headlines emanating from the United Nations and academic studies about missed emissions targets, we were told that investing 2 percent of global gross domestic product (GDP) annually in environment-friendly technology and infrastructure could prevent catastrophic climate change.

After a gala dinner at Hamburg’s newly opened museum Montblanc Haus, the event closed on the final day with a cofounder of one of the iconic firms of the digital age striding across the stage and pressing home his message that none of our companies would survive if we were “unwilling to disrupt” ourselves. The successful companies of our times must have a culture and “tolerance for risk” that endlessly “tries a lot of bad ideas”⁴—to find that one true gem on which tomorrow’s fortunes are built. So perhaps

xiii

INTRODUCTION

it was no surprise that the financial sophisticates in the room knew they had to adapt.

But how? they asked me.

That’s the subject of this book: how we must all change our way of investing to meet the needs of our times.

The sheer volume of assets my team manages at UBS means we can afford to go to great lengths in our efforts to provide our clients the information needed to make better investment decisions. But moving large amounts of capital in the markets also means the investment pronouncements I oversee can sway the direction of capital markets. These are some of the reasons why the globe’s most powerful financial institutions and the very wealthy—those forty billionaires gathered at the Fontenay, for example—want to know what my team and I are thinking about the markets and what our latest ideas are about where they should be investing—and how.

Well, this book is not just for them or restricted to Wall Street professionals.

This book is equally for you. It is meant to help you, the lay reader, become a better investor and, I hope, help you steadily accumulate wealth over the course of your life, in all its varied material and nonmaterial forms. You might miss a few of my more technical financial and economic explanations along the way, but that’s okay, because they are not the core of what it means to become a better investor. If you stick with me through the unfolding chapters, you will, I promise, walk away with a deeper understanding of how markets really work, while also learning practical tips on how to create greater wealth during your lifetime.

In broad strokes this is what I will help you understand:

How to follow the money to see how the world has profoundly changed
How this change has made investing more complex
How it requires you to change your approach to investing
Why the risk-adjusted returns of self-directed clients underperform clients who work with advisors to invest in our asset-allocation solutions
Why you should think about your wealth in three portfolio “buckets”
Why possessing self-knowledge and incorporating your personal money issues into your investment process are important
That the most inspiring investors today are transforming how we invest in the future through a technique called impact investing
That, if you follow the money, as we will do, it is possible to imagine how investing will be different by the middle of the twenty-first century
How cultivating humility is essential to becoming a successful investor
Now why, you might ask, would I share my knowledge with you?

The simplest answer is that at age fifty-three I am in that stage of life when I am concerned less with writing my résumé than I am with writing my tombstone. This is one way I hope to give back to the world.

But that’s a grandiose response. The more mundane and important truth is I needed to write down and articulate my own thinking about investing over the next twenty-five years because it is going to be different from the past twenty-five years in many ways. I would go so far as to say that many of the time-tested rules of investing, when put in practice today by the average investor, are dangerous to their wealth.

[...]

xviii

INTRODUCTION

Since that profound macro issue affects everything we do as investors, I begin this book by explaining this big shift before we get down to the essentials of portfolio construction and how to manage your wealth in a more fulsome way. That’s why chapter 1 looks at how a changing world is forcing us to reorganize our investment thinking around what we call the 5Ds of disruption.

[...]

xx
Mark Haefele and Richard C. Morais
The New Rules of Investing: Essential Wealth Strategies for Turbulent Times
HarperCollins Leadership / HarperCollins India, 2025. Hb. Pp. 234
The rules for investing have changed. Don’t get left behind.
Reboot your approach with this timely guide from a wealth management powerhouse.

It’s not hard to grasp why we need to change the way we think about investing. Over the past twenty-five years, new developments in world affairs, demographics, technology, and more have disrupted the old reality—and these changes directly affect the financial markets and your individual portfolio. Stock picking and Buffett-style investing are the financial tools of a bygone era, yet many investors are confused about what should take their place. So what do you need to know to protect and grow your wealth in these turbulent times?

As the chief investment officer of UBS, the world’s largest and only truly global wealth manager, Mark Haefele oversees the team that manages and advises around $4 trillion of clients’ invested wealth. Mark has spent decades advising investors of all kinds—from high school students to government officials and UBS’s unique global roster of billionaires. This has enabled him to sharpen his perspective while watching the old rules fall by the wayside.

In this playbook for protecting and growing your wealth, Haefele shares the investing strategies he uses at UBS and distills his battle-tested philosophy into a set of actionable rules that can guide you into a secure financial future. You’ll walk away knowing:

How to follow the money—see where governments are investing and how this insight can drive your own investment decisions.
Why you should allocate assets and think about your wealth in three portfolio “buckets” that cover short-term, long-term, and legacy scenarios.
How understanding yourself and your personal money issues pays off—literally.
How to get results beyond the balance sheet via impact investing, which allows you to grow your portfolio while benefitting causes you care about.
Accessible explanations, client case studies, personal stories, and bottom-line summaries make The New Rules of Investing a resource you’ll consult time after time. Whether you’re a novice working with a financial advisor, an experienced investor, or an investment professional, you’ll be better equipped to manage your wealth more efficiently, calmly, and successfully.
The book excerpt that has been published here is from the introduction to the book. Hence, it outlines what is laid out in rest of the book, chapter by chapter. It gives an overview of what to expect and how to use the advice constructively.

This is what the Nobel Laureate for Economic Sciences 2001, Michael Spencer, has to say:

“The New Rules of Investing presents a compelling argument that the investment environment has changed in consequential ways in the 21st century. In readable prose, it explains how investors can react to powerful new forces and shocks. These structural changes in process and in prospect are usefully captured in the 5 D's: debt, de-globalization, decarbonization, digitalization, and demographics. A very useful framework for navigating in a rapidly changing world.”

Mark Haefele is the global chief investment officer at UBS, named World’s Best Bank 2024 by leading financial publication Euromoney. Mark oversees the investment policy and strategy for around $4 trillion in invested assets at UBS. He leads a team of about 1,200 investment professionals whose passion and focus is to help clients reimagine the power of investing so they can live the life they choose today, prepare for their lives tomorrow, and improve the lives of others.