This edition of Oliver’s Insights looks at the phenomenon of “risk on/risk off” that has seen listed growth assets like shares, corporate debt, commodity prices and the Australian dollar move together.
The key points are as follows:
- The “risk on/risk off” pattern that has prevailed in investment markets since the global financial crisis (GFC) is showing signs of breaking down.
- This reflects reduced risks associated with the US and Europe and should be seen as a good sign.
- It means that individual assets and investments can go back to better reflecting their underlying fundamentals.
- It should also mean that the benefits of having a diversified portfolio should start to become more evident in the years ahead.
To read this edition of Oliver’s Insights, click here.