Saturday, November 10, 2012
Is this safe?
So pension funds are moving to gilts and bonds, away from shares because shares are volatile. I don't think this is so safe because the only possible move for interest rates is up, they cannot go lower, in which case all debt instruments will lose value. So the pension funds are sitting on an inevitable loss by holding debt now, the one thing you really don't want to do I would have thought.The fact that shares are bad does not mean therefore debt is good.. which seems to be the reasoning although regulations probably have a lot to do with it.Pension funds then have been selling out of the stock market, although the ftse100 has been heading up..The looting continues basically. Additionally shares priced in gold are near their cyclical bottom .Telegraph has a different take on this to me.