Investor responses

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How are investors tackling the issues of de-globalisation and the impact on their portfolios?[vc_quotes layout=”accordion” 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title=”Moderator” el_class=””][vc_empty_space height=”10px”]

Key takeaways

Kate

• One of the mistakes we made at the Bank of England was that we thought the GFC would be over more quickly and we thought we could fix it on our own.
• The GFC wasn’t really a global crisis. This time the crisis truly is global, and it’s more important that we get it right.
• Central banks are less relevant in the pandemic because this is not a banking crisis. Thus far, policy response has broadly been viewed in a favourable light. Going forward policy may be less popular which will provide a significant challenge. Central banks will be concerned about the potential for stagflation
• Do we really need the government to play a bigger role? The private sector has been remarkable throughout the crisis and they should not be taxed out of existence or prosperity to pay for the stimulus measures.

 James

• This is the most difficult investing period of my 30-year career because there is so much uncertainty. Monetary policy is a blunt instrument and has probably reached its peak effectiveness. This contributes to significant policy risk.
• We shouldn’t be debating MMT, we should be debating the governance around it.
• It is easy to talk about building a portfolio that is resilient enough to withstand any environment but this is getting harder and harder.
• Given that many defensive assets don’t earn a sufficient return, balancing portfolio resilience and return can be problematic.

 Olivier

• There is much cause for pessimism:
• Asset classes are exhausted and expensive in part because our frame of thinking is outdated.
• Trust between nations is one of the most problematic issues.
• We have realised that we have been short-changed by China.
• We will have to choose between the US (who are letting us down) and China (who will not be a better master than the US).
• Civil unrest continues and populism remains to be about me, me and I.
• The EU suffered through the GFC (even though it started in the US) and also through COVID-19 (even though it started in Asia).