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Investors Perceive Risks As Harder To Hedge Than Before

Government Bonds
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EDITOR NOTE: When the stock market crumbles, go to bonds, or go to cash. That’s traditionally what most investors do. In today’s monetary environment, that “ain’t gonna work.” Why not? With bond yields near zero, you’re hardly getting anything, something close to zero. With the dollar’s purchasing power poised for a severe inflationary plunge, it’ll be worth much less in the future as compared with today’s values. So where do investors go for safety? Isn’t that why Warren Buffett, Ray Dalio, and a host of other banks and financial institutions turning to gold?

Safe-haven assets seen as traditional hedges aren’t panning out as they once did, according to JPMorgan Chase & Co.

Easy-money policies may actually be keeping investors in cash and away from other traditional buffers, strategists led by John Normand wrote in a note Friday. That’s because such policies create a zero-yield environment where cyclical assets might be too difficult to hedge, they said.

This kind of conservative mindset may not become popular enough to affect th ..

Read more at Economic Times

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