Results for search of category: Inflation

How to Hedge an Equity Sell-Off

Bonds don’t always go up when equities go down. In 2003, holding long-dated government bonds on average offset 50% of local currency losses in developed equity markets. That ratio has fallen steadily in each of the following major sell-offs, 2009, 2016 and 2020. This year, it was effectively zero on average for the seven largest developed markets. For some countries, it was negative - i.e. bonds went down just when you needed them most.   [Read More... ]

How to Manage Falling Treasuries

We think that the best way dealing with falling Treasuries is to stay in fixed income and to seek out situations in the credit markets, which are priced for high levels of risk, and where volatility is still falling. The problem with reducing duration or buying inflation-linked bonds is that the Fed and other central banks can force you to unwind it if they want to.  [Read More... ]

All That Glisters Is Not Gold

Most US investors are convinced that the 30-year bull market in US Treasuries is over, but there is little agreement about what to do next and the fiercest controversy is reserved for Gold.  [Read More... ]

What’s the Japanese for Inflation?

Since the Japanese election,the yen has depreciated by 15% against the dollar and Japanese equities have returned 37%. This is a nice trade for global macro managers, but conventional equity managers, have not been too excited because the TOPIX is only up 17% in dollar terms roughly the same as the S&P 500. However it is now time for the investment community to re-evaluate the Japanese equity market..  [Read More... ]

How Low Can We Go?

It doesn’t matter which currency we choose – sterling, dollars or euro - all our multi-asset models recommend a very low weighting in government bonds. This ranges from 0-3%, which is pushing the edge of envelope, even for a tactical asset allocation model. The obvious question is does this make sense, to which the equally obvious answer is that it depends which currency we are talking about.  [Read More... ]

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