Wednesday, December 5, 2018

Cash is The King, Better Risk-Adjusted Return Than Equities

Stock market in US still gloomy, One of the biggest Asset Management company in US said, Cash isn’t only a safe place to invest, it now offers a better risk-adjusted return than equities, so there is a strong signal for a new era of stock market crisis? maybe..
Cash is the King is a strong words, That was highlighted by the firm’s multi-asset strategy team, with $260 billion under management, which upgraded its recommendation on U.S. cash to overweight for 2019. For the first time in a decade, investors can get a lot more from safe, liquid securities than from the S&P 500 Index, adjusted for volatility, they argued.
“Our cash and duration overweights really distill down to overweights in U.S. cash and Treasuries, where ex-ante Sharpe ratios are now well ahead of those for U.S. stocks for the first time in a decade,” according to John Bilton, head of global multi-asset strategy at JPMorgan Asset Management. A Sharpe ratio is a measure of an asset’s performance relative to its volatility.
source: bloomberg

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