Risk-averse investors should not overlook ITs

ON ASSET ALLOCATION

Markets have finally lost patience with the ‘mañana' policies in Europe resulting in the worst quarterly declines for equities since 2008.

The rhetoric from the world’s leading central banks has not been soothing with Fed chairman Ben Bernanke recently talking about ‘significant downside risks for the US economy’ and Mervyn King, stating that “the world was facing the worst financial crisis since the 1930’s, if not ever”. Meanwhile, stubbornly high inflation, a sluggish labour market and falling (in real terms) wages in the developed world hardly seems the ideal backdrop for investors while fears the emerging markets may not be as decoupled as previously thought has hardly inspired confidence. However, with interest rate...