How to invest in the age of deflation (and high volatility)

CIO letter» |

November 19, 2014

We are convinced that we are now entering a new phase, after the long bull market run, where volatility is going to remain a principal feature and where returns are going to remain suppressed for long. What is materially different from the period 2009-2014 is the poisoned combination of higher debt, stretched asset class valuations, higher economic volatility and lower expected effectiveness of Central Banks’ actions. In this new environment, we believe that three elements - an enhanced diversification approach, the ability to generate excess returns and the evolution of a risk management discipline that includes a behavioral component - will be the key tools in driving successful investment management in a new era of stretched valuations and higher volatility.

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