Two alternative strategies for today's 'new normal' environment

ALTERNATIVES

Now, more than ever, there is a greater need for investors to revisit diversifying strategies for their portfolios, writes Elizabeth Savage, research director at Rathbones.

An investor trying to make a definitive assessment on the US or UK economy, based solely on the level of equity markets, faces quite a challenge given today’s landscape.  The last time equities were at this level back in 2007, UK interest rates was close to 5%; CPI inflation was running close to 3%; unemployment was hovering near 5.5%; 10-year real bond yields were close to 2%, and the Bank of England’s balance sheet was something investors thought very little about. Wind forward six years, and the interest rate is at 0.5%; CPI inflation is running at 2.8%; unemployment is hovering ar...