For the past three years, the word “inflation” has sat at the top of every investor’s worry list.

From record rate hikes to collapsing bond prices, supply shocks to mortgage stress, the market environment from 2021 to mid-2025 has been shaped by one defining macro narrative: the fight against inflation. That fight, it now seems, is largely done and with its retreat, we find ourselves at the edge of a new investment regime.

So, what comes next? More importantly, what must we, as long-term investors, unlearn and relearn in order to succeed in a world no longer dominated by the inflation fear trade?

This article is about rethinking how we approach opportunity and risk, when the tide of inflation recedes.

Inflation Was the Narrative Anchor and Now We’re Unmoored

Narratives shape markets far more than spreadsheets. Inflation, for a time, became the ultimate anchor for capital allocation decisions:

• Own energy and resources to hedge against price spikes
• Hold cash and short-term bonds to protect capital from duration risk
• Avoid growth and tech due to sensitivity to higher discount rates
• Be defensive because higher inflation implies a consumer squeeze and margin compression

This was, in many respects, rational. The cost of capital was rising. Central banks were clearly behind the curve in 2022. Commodities, cash, and tangible assets all outperformed.

But now, with inflation prints across the developed world falling toward target levels and central banks on hold or cutting, the rules of the game are shifting and perhaps faster than investors realise.

The Next Era: Return of the Long Game

When inflation peaks and rates plateau, market leadership often rotates. The winners of the “fear of inflation” regime begin to lag, and those businesses positioned for structural growth,  rather than cyclical protection, begin to shine.

A Few Key Patterns to Consider:

• Cash becomes less attractive: As real yields normalise and the prospect of falling rates looms, holding cash turns from safety to drag.
• Quality businesses outperform: Companies with pricing power, strong margins, and long-term tailwinds start to matter again, not just their short-term rate sensitivity.
• Growth is back in play: Especially those with clear earnings visibility, efficient reinvestment pathways, and proven management execution.
• Private capital moves: As public market volatility settles, private equity and infrastructure investors step up, often buying public companies before the market fully re-rates them.

We’re already seeing this pattern emerge in some corners of the ASX, small caps, in particular, are responding positively to any signal that the rate cycle is done. Many investors are underexposed here due to lingering macro fatigue.

The “Fear Trade” is Still Crowded

The irony is that many portfolios still reflect an outdated mindset. Having suffered bruising volatility over the past few years, investors are overweight cash, defensives, and energy/resource names. There’s logic to that positioning. But there’s also risk.

The real opportunity cost lies in not being exposed to businesses that can grow earnings in a disinflationary world.

A company with pricing power, global scale, clean balance sheet, and reinvestment runway becomes more valuable when interest rates aren’t climbing and margins aren’t under siege from cost shocks.

Even certain segments of infrastructure, which we love, may lag if they were primarily purchased as “inflation-linked bond proxies.” That’s not their only story.

Where to From Here?

At TAMIM, we see this moment as one of repositioning, not reaction. We believe the right investment stance now includes:

1. Owning Companies, Not Commodities

Commodities did their job. They protected portfolios from inflation, supply chain dislocations, and geopolitical flare-ups.

But in a disinflationary world, commodities are no longer the tailwind, they’re a mean reversion risk. That doesn’t mean avoid entirely, but it does mean reallocating capital into businesses that create value, not just sit on it.

We prefer businesses that convert commodity exposure into earnings power (think: logistics, infrastructure, mining services) rather than simple resource beta.

2. Valuing Duration Again

For years, anything that required a 5–10 year horizon to justify its price was punished. Now, duration is no longer a dirty word.

Growth businesses, those investing today for clear monetisation paths tomorrow, deserve another look. Especially founder-led, profitable, capital-efficient models that were thrown out with the speculative bathwater of 2021.

This doesn’t mean going all-in on profitless tech. It means acknowledging that a world of stable or falling rates changes the mathematics of value.

3. Looking Where Others Won’t

When macro fear dominates, investor herding becomes extreme. We’re seeing opportunities in the parts of the market that have been neglected for too long, small caps, international value, misunderstood tech, and certain niche asset classes.

We’re also leaning into M&A catalysts, where companies with improving fundamentals are being acquired before the market gives them full credit. The recent trend in ASX takeovers underscores how private capital is willing to look through the macro noise, often more boldly than listed investors.

The Opportunity is Process, Not Prediction

One of our core philosophies is that you don’t need to predict the macro environment to build a great portfolio. You need a process that allows you to:

• Identify mispricing
• Understand structural vs cyclical drivers
• Stay close to management and incentives
• Position early before the crowd moves

Now that the “inflation fear” anchor is being lifted, investors with clarity of process have the upper hand. The fog is lifting. Those with a map will outperform.

A Word on Patience

A turning point in the macro cycle is not a light switch. It’s a tide shift.

Just because inflation has cooled doesn’t mean markets will reprice overnight. In fact, this is when emotional discipline matters most. Investors conditioned to fear every CPI print or central bank comment may struggle to reorient.

But those who can step back, reassess, and reallocate will reap the rewards. As always, the market eventually rewards fundamentals, but only after it exhausts all other narratives.

The TAMIM Takeaway

The fight against inflation is ending and with it, the era of hiding in cash, chasing commodities, and fearing duration. This is the time to return to long-term investing: to focus on companies that are growing, generating cash, and reinvesting wisely, not just those that “protect” capital.

Repositioning your portfolio in a disinflationary world doesn’t mean blindly chasing growth or abandoning discipline. It means understanding what the new environment rewards, and being early to that rotation. It’s time to lean back into equities, lean forward into quality, and lean away from macro-driven paralysis.

The tide is turning. Are you ready?