Over the past couple of years investors have understandably sought comfort in cash, given the high rates on offer and the significant market uncertainty.
We think it could be the right time for investors to review their cash allocations versus riskier assets, both from a risk and opportunity cost perspective, especially as we move toward an environment characterised by falling rates.
We have been deploying cash into bonds, attractive stocks and liquid alternatives in the appropriate portfolios where we have the discretion.
Long-term loss
Cash may seem appealing if we look at current yield levels, and it certainly has applications for balancing equity exposure and short-term liquidity needs.
Central banks have begun the year on another tightrope between balancing inflationary forces and the pressure to drop interest rates.
In our view, the global economy faces an asymmetric outlook in 2024; meaning greater dispersion in regional returns and greater opportunities for investors willing to embrace risk.