Writing my fourth-quarter preview of the economy and markets, which I plan to share with youtomorrow, I started thinking about several big ideas that are in play right now. Though these themes aren’t particularly actionable, they will frame our discussion of the near- to medium-term future.

1. Policy versus fundamentals

I’ve mentioned this before, in terms of stock market valuations and performance, but the issue extends well beyond the market. The presidential debate, for example, offered little discussion of the facts (the fundamentals), instead focusing on the candidates’ ideas and policies, with trade and taxes in the foreground. Another example is the Fed’s “data-dependent” policy, which has pretty much ignored the data.

Policy can override reality for quite a while, but ultimately, the bill comes due. With both the election and a potential rate hike coming up in the next couple of months, we need to keep an eye on that gap.

2. U.S. versus the world

Another way to put this would be “us versus them,” as the idea isn’t limited to the U.S. Protectionism is rising, nationalism is rising, and it seems very likely that the international environment, both political and economic, will be very different in the next five years. It may end up being different in the rest of this year. As investors, most of our models are based on a globalizing world over the past 30 years. But that may not continue to be the case.

3. The rise of the 99 Percent

For the most part, U.S. policy has been tilted toward capital over the last 30 years. This was initially very successful, but the perception now is that capital has too much of an advantage over labor. The current version of this is the 99 Percent movement, which found political expression in both the Trump and Sanders campaigns. This sentiment is not going away any time soon and stands to be an increasingly important driver of policy.

4. Young versus old

With the U.S. budget deficit set to rise again as baby boomers retire, and with the Millennials becoming a more politically and economically active force in the country, a real conflict between generations is brewing. Tying in with the last point, older people tend to be wealthier while the younger people are working—again, labor versus capital.

Indeed, conflict seems to be the overarching theme here. Current trends can’t continue, and there will be disagreements over which way we go.

Driving this meta-theme is the perception of limited opportunities and resources. Monetary policy has been drafted to do what Congress won’t do with fiscal policy, because it doesn’t want to choose between tax increases and higher deficits. Countries want a bigger piece of the pie, and it doesn’t matter if the pie ends up being smaller. Large parts of the population feel like they haven’t gotten their fair share and that the pie is getting even smaller.

There are certainly opportunities here, but the risks are very apparent as well. This is the backdrop against which we have to look ahead to the next quarter and into the future.

Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by Brad McMillan.

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