Malcolm Bell's  Instablog

The combination of a sluggish recovery in the economy and concerns over the UK’s fiscal position and credit rating has weighed on UK asset markets over recent weeks.

The rally in the equity market has lost steam, while UK bonds have underperformed their overseas counterparts and the sterling exchange rate has fallen sharply. Such concerns seem unlikely to dissipate and the recent hung parliament result of the general election has added to a feeling of instability.

Equity markets over-priced the recovery and are now correcting (10/15%). Treasuries are low yielding given flight to quality and are unattractive at these prices in the long run because of associated inflation and default risks. In our view, commodities remain volatile and Gold is due for a correction, (surely gold plated ATMs in Abu Dhabi are a sure sign of a bubble). Besides, alternative defensive holdings, such as cash and gold, are not yielding. Inflation risk in medium/long term with negative real interest rates

How then to invest for absolute returns?

http://www.slideshare.net/malabells/absolute-return-investing-through-volatility


Disclosure: No positions