Investors shifted money away from safe haven assets and poured into equities and other risky asset classes on the expectation of less geopolitical risks in the markets.
But it is really a third asset class between bonds and equities.
If the fiscal-cliff debate lingers, some analysts expect gold to act as a risk asset and track markets like equities, while others look for the precious metal to regain its safe-haven appeal.
FORBES: FOCUS: Gold Market Focused On Fiscal Cliff--Safe Haven Or Risk Asset?
We can see this best by examining what has happened to different asset classes of equities in those years, and the impact that has had on individual companies.
They can also fill the role of a less-correlated asset for investors with more traditional positions in equities and fixed income.
N?w techniques are coming on stream all the time and I see equities as the best asset class of choice as a result of the setback.
FORBES: Japan's Quake/Tsunami Is Terrible...Stocks Will Bounce Back
Some firms have separate systems for different asset classes, such as foreign exchange, equities, and options.
FORBES: Chicago's Sun Trading Consolidates Asset Classes on Kx
These days, however, funds increasingly specialise in one asset class international equities, say and investors do their own mixing.
Yet, other times gold has instead risen and fallen with the euro and equities, thereby acting as a risk asset itself.
But in reality, if you look at how the asset class behaves, it behaves a little bit like equities and a little bit like bonds.
Whether the latest meltdown caused you to rethink your asset allocation or you are sticking with the division between bonds and equities that you chose previously, chances are you need to rebalance your portfolio in light of recent events.
This year commodities and emerging market equities are proving to be constraints on the asset management returns for Goldman.
FORBES: Goldman Sachs Gets To $164, No Thanks To Asset Management Biz
Purcell told the attendees at a financial services conference sponsored by UBS (nyse: UBS - news - people ) that the morale issues were contained to equities and investment banking and that things are fine in asset management.
Another point that those of a more perma-bull persuasion make regarding the huge bond fund inflows over the past few years (and flows out of equities), is that investors have shifted their asset allocation from stocks to bonds at precisely the wrong time.
These theories have recently become suspect, with the correlated market declines that wreaked havoc on efficient markets, causing broad-based distortions in prices across most asset classes: the sovereign debt of Greece, Italy, Portugal, Spain and Ireland, the equities of European and domestic banks, high-yield and corporate bonds and emerging-market and domestic equities.
Our conservative asset allocation model suggests maintaining a 50% exposure to equities, diversified among large-, mid- and small-cap domestic stocks and international stocks.
FORBES: You May Have To Rebalance Your Portfolio Due To Health Care Costs
It provides high current income, and therefore is probably best thought of as a high-income asset class, perhaps a substitute or something that would go along with an investment in high dividend equities and obviously more high-quality bonds.
Our strategy at Hanlon Investment Management is to attempt to minimize downside risk by exiting risk asset classes, such as equities, during periods of uncertainty, getting invested in more conservative asset classes, such as money markets and short-term bonds, and re-entering into risky asset classes when we identify them as attractive, when the trend is our friend and positive!
FORBES: Watch Out: 2011 Looks A Lot Like The Market Top In 2007
应用推荐