An interesting article from The Economist looking at similarities between current market conditions and 2007
An interesting article from The Economist looking at similarities between current market conditions and 2007. The divergence remains around stimulus and the lack of euphoria in the current market compared to '07. The problem remains for investors that they are being forced to choose between the lesser of two evils - Equities or Bonds. The latest Bank of America Merrill Lynch poll of institutional investors found that a net 48% were overweight equities, even though a net 15% felt that stocks were overvalued. This apparent contradiction is easily explained since an even bigger share of investors felt that bonds were overvalued. The current stimulus settings pose the dilemma of either a weak economy in which case corporate profits will eventually disappoint. Alternatively, the economy kicks on and rates rise sooner than expected. Worth a read: (VIEW LINK)
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