"This time is different" has been a common line used in the investing world for ages, but ultimately the new "different" often turns out to be more of the same. That said, the current investing climate actually could be different, said speakers Monday at the 6th Annual Inside Alternatives Conference in Denver hosted by Financial Advisor and Private Wealth magazines.

"What we're seeing today is different from what any of us have experienced in our investment lifetimes," said Ben Hunt, chief risk officer at Salient Partners. Hunt spoke on a panel session that discussed living in a world of elevated risk levels. "You have to go back to the 1930s and the 1870s to see something similar, and what's similar is when politicians in general are successful in transforming capital markets into political utilities. I believe that's the big picture of what we're experiencing today, and it requires a different mindset."

"You can't put these political genies back in the bottle. Politics always trumps economics," Hunt noted. "This game of chicken is everywhere--it's between Russia and the West; between Iran and the West; it's between [U.S. Federal Reserve chairman Janet] Yellen and the markets. Everywhere you look it's a test of willpower. And while I think there are a lot of opportunities from this policy divergence, it creates all of these different examples of these tests of willpower, these games of chicken, and that creates an environment investors haven't had to face since the 1930s."

Hunt offered that the current status quo regarding the economy and monetary policy is a good situation for many investors, as the steady, low-growth environment coupled with monetary policy support has been a friend to both stocks and bonds.

"That's the new Goldilocks, which is a growth rate in the U.S. of 1.5 to 2 percent--which would be awful in prior decades, but now buttressed by incredible monetary support, that's working for us. It's a stable equilibrium," Hunt said.

"But politics makes it unstable, because it's always political shocks that upend these very nice, stable economic periods," he added. "That's what you have to look for. I really believe the elections next year in Italy and France could be the potential source for the shock that overcomes this very stable political utility equilibrium we've had across the global markets."

Politics are always a looming 800-pound gorilla, but the unprecedented liquidity unleashed by central banks globally since the Great Recessions creates a massive wild card that ratchets up the unpredictability in tandem with the political uncertainty. 

"There's always stuff going on geopolitically," said Jack Rivkin, CEO and chief investment officer at Altegirs. "The question is what does it lead to on the financial side of things. Investors are froclicking throught the buttercups, so to speak, because they're looking at QE [quantitative easing] where money is pouring into systems around the world and people are following the money. 

"The big issue as the U.S. stops its QE and does something about its balance sheet is we have divergence going on here," he continued. "As the U.S. comes to the end of its liquidity trail, the risk is we haven't really created inflation expectations yet. We're going to see divergence in policies, and that will create additional volatility that could be a major problem."

One of the panelists suggested we're in the fifth inning of the current investment cycle. Rivkin offered a different take.

"What you're seeing is we started a new game; what inning isn't important," he said. " We've lived in a declining interest rate environment since 1981. We've declined about as much as we can, but now we're going on the other side of that. So the saying we all use that 'past performance isn't indicative of future results' I think is absolutely true. We're entering into a new game versus an inning in the old game.

"And in the new game, it depends on your timeframe," he added. "I define the new game as being very slow global growth. And your classic asset classes won't be doing what they did before. You'll see very low equity appreciation over the next five to 10 years, or maybe significantly longer as we work throught this deleveraging that's happening on the debt side. At the same time, you're not going to get the returns or the safety that you've gotten historically from this continually declining [interest rate] period from the fixed-income side."

The solution? 

"We have to look at a whole new set of investments," Rivkin said. "By the way, I hate the word 'alternatives' because we're not talking alternatives here. We're talking about equity and fixed-income variations, and they're not alternative because the definition of alternative is something outside of the norm. This [so-called alternative and liquid alternative products] is really becoming the norm. But you have to understand we're in a different game now, and we're going to have to look for different ways to play ball."

As for how to invest in this environment, Rivkin said the short-term play is to follow the money, which means follow the QE and its backdrop of asset inflation. The longer-term view means looking at places such as South America and Mexico, along with Asia ex-China and Japan.  

The third panelist, Ali Motamed, portfolio manager at Boston Partners, waved the yellow caution flag for investors.

"I do think the markets are exhuberant right now," he said. "I think QE has pushed people toward equities because when they look out over the near-term that's the only place they see returns coming from. I think the problem is that people's durations are short-sighted; they're looking at the next 12 months and running while looking at their feet. But if you look at all of these things going on and at market multiples, there are a lot of risks out there."

And one of those risks is the potential impact of rising interest rates.

"People look at rate moves of 50 to 100 basis points," Motamed said. "The initial rate moves might not be a big deal, but when you look at a 100 basis point rate hike that implies about a 15 percent to 18 percent increase in financing costs. Put in those terms, that takes M&A out of the game and share repurchases out of the game. So I think investors are being exhuberant, and I think the risks out there are massive. When you look out over a two- to three-year horizon, I think more caution is warranted."