People want to make sure there is flexibility to reallocate assets. They are trusting us to make the asset allocation decisions.
Sentiment: POSITIVE
In various countries around the world, assets that had previously been in the hands of governments were sold off to the private sector in the hope that this would lead to a more efficient allocation, that these assets would be put to better use.
I think that the first thing is you should have a strategic asset allocation mix that assumes that you don't know what the future is going to hold.
And so it can be very much in the interest of bank A to sell-short bank B shares, or buy CDSes on bank B, because they have exposure to bank B. It's the responsible thing to do as a fiduciary, and yet if everyone does it at the same time, it's destabilizing because everyone is selling.
People should have an escape valve for their money, their assets. If you have substantial financial assets, the government is going to confiscate the purchasing power of those assets and spend it.
I think it's a mistake to rely too much on any one economic factor. It's why investors try to spread their portfolio round.
Assets put money in your pocket, whether you work or not, and liabilities take money from your pocket.
We tend to focus on assets and forget about debts. Financial security requires facing up to the big picture: assets minus debts.
Illiquid asset purchases are all about capital and encouraging private capital to come in.
The assets you want to buy are the ones people have to sell.
Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition.