Monetary and fiscal stimulus are generating strong cyclical ‘animal'

ON BONDS

In early 2009 we went from a situation where deterioration was simply slowing, to early signs of positive surprises, and then a clear improvement in sentiment and data.

Whether you expect slow growth or not – does that not sound like a cyclical economic recovery? We think it is an economic recovery, and various economic data clearly point in this direction. As expected, the monetary and fiscal stimulus are supporting positive economic growth and generating a strong cyclical “animal”. This is important when making investment decisions, as you either expect a steady, even if slow, improvement or steady deterioration. As a result, we believe it is not worth trying to fight this animal. When it comes to valuation, an important consideration is most ...