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Benedicte Gravrand, Opalesque London: Two investment giants, BlackRock and State Street Global Advisors, have released their outlook for the second half of 2016. Both see volatility ahead, low rates for longer, and are concerned about the impact of Brexit, the UK’s vote to leave the European Union, on the rest of the world.
Our current low-growth and low-return world is not an easy one for investors, who may opt for riskier strategies and riskier assets to get the returns they are seeking. But this would be a good time for those who can navigate volatility.
Volatility raises the importance of diversification
According to the BlackRock Investment Institute (BII)'s Mid-Year 2016 Global Investment Outlook, there is more volatility ahead for global markets.
The BII has updated its three themes for this year to: 1) We are living in a low-return world; 2) Monetary policy has been a key driver of asset prices — but its effectiveness looks to be waning; 3) We see more volatility ahead as Brexit-related anxiety weighs on Europe’s economy and the business cycle matures.
Up till now, easy monetary policies suppressed volatility, prompting many investors to flock to similar assets, such as the yen, US equities and precious metals. The BII sees volatility driving more investment flows into high-grade credit, quality equities and dividend gro...................... To view our full article Click here
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