We view recent developments on Chinese markets as a sharp correction rather than the start of a long-term bear market. In the meantime, the economic recovery in the US and the euro area continues to gain traction. Recent developments in China need to be seen in the context of long-term economic trends. China is in […]
One answer to cope with political uncertainty: diversification Comparing investors to tightrope walkers is obvious: both are constantly striving to perform a tricky balancing-act. When making decisions, investors are seeking to find the ideal balance between generating a good return and shouldering risk against a backdrop of uncertainties.The two crises involving Greece and China remind […]
The third mandate of the Federal Reserve For several years in our Secular Outlook, we have highlighted a change in the way developed-country central banks conduct monetary policy – nowadays taking into account the price of both fixed and circulating assets. We describe this trend as targeting asset prices. The crisis of 2008 demonstrated that […]
Jean Monnet, in the aftermath of the Great Depression and well before he made his central contribution to realisation of the European ideal, remarked: “People only accept change when they are faced with necessity, and only recognise necessity when a crisis is upon them”. Shock-waves from the two major systemic crises of the last decade […]
The merits of private equity Depending on the example taken, private equity (shares in unquoted companies) is seen as either an opaque and expensive investment for an unpredictable outcome, or as a safe and compelling investment that allows one to invest in known companies with a clearly identified economic function over which one exercises control, […]
Should investors cross the Atlantic? With an increase of up to 20% in certain indices, equity markets in the eurozone began 2015 with a bang, leading many investors to wonder if it might be sensible to reduce their US equity allocation in favour of European stocks. Quite a few have already taken the plunge, as […]
Two ways to manage negative rates Some believed that the race towards monetary easing had reached its climax with quantitative easing (QE) and the zero interest-rate policy. Yet against all odds, a further stage occurred with the introduction of negative interest rates in the eurozone, Denmark, Sweden and Switzerland. In the process, the yield to […]
Eurozone policy mix remains incomplete The European Central Bank had already signalled its intentions and did not disappoint investors when, on 21 January, it announced a plan to acquire sovereign debt to a minimum of €60bn monthly up to September 2016.To understand what this level of quantitative easing can do to boost the eurozone economy, […]
The oil price collapse is consistent with the long-standing themes in our Secular Trends Every year in November we review and update our Secular Trends publication. In simple terms, our prognosis for the decade favours – and has favoured – developed markets over emerging markets, the dollar over the euro, and technology over commodities. At […]
The effects of changes to QE are not linear The era of unconventional monetary policy began after the collapse of the Lehman Brothers investment bank in September 2009. One of the most controversial aspects of this policy is the direct purchase of assets by central banks, commonly known as quantitative easing or QE. At the […]
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