Investment Office

Excerpts:

“Plentiful money at near-zero cost has been the mood music of markets since the financial crisis. the result of this government-sponsored largesse? suppressed volatility, greater risk taking and a potential misallocation of capital. What happens to markets when financial conditions tighten and risks of a liquidity disappearing act pick up?”
…

“the US federal reserve is unlikely to raise rates until 2015 at the earliest, we believe, but volatility is set to rise from trough levels as the quantity of its stimulus wanes. This means portfolios today are more risky than they appear. Investors have to weigh the risk of getting caught out versus the risk of leaving the party too soon. Yet going against the crowd is difficult.”