The US wants to raise rates but shouldn’t, China wants to lower rates, but can’t. It’s a tricky investment landscape in 2016. One of the big concerns for investors continues to be Quantitative Easing (QE), with the wind-back in the US and expansion in Japan and Europe. “In the early stages of QE there was a sufficient risk premia to attract investors to invest in these other assets. But those assets have now been bid up to the extent that attractiveness no longer exists. So it’s a little bit like pushing on a string, QE is ineffective at stimulating demand now, but the corollary that it’s more effective at reducing demand when it’s wound back. That’s where we are today.” As a result of these concerns, we’re continuing to hold a large portion of cash in our funds. Watch this week’s Video Insight for Roger’s views on the US and China, and how they affect Australian investors.
Roger Montgomery founded Montgomery Investment Management, www.montinvest.com in 2010. Roger brings more than two decades of investment, financial market experience and knowledge. Roger also authored the best-selling investment book, Value.able.