Session recording and slides

Atul Lele: Rapid policy response and the unprecedented speed of asset reflation

Rapid policy response and the unprecedented speed of asset reflation

There are some expectations that the coronavirus pandemic hit could see a reversal in US corporate profit margins that could lead to a lost decade for equity investors. On the other side of the coronavirus, should investors expect an increased percentage of zombie corporations that not even the Federal Reserve will be able to support, and an even larger asset bubble?

Speakers:
Atul Lele, portfolio strategist, Bridgewater Associates
Moderator: Colin Tate, chief executive, Conexus Financial

VIEW ATUL’S PRESENTATION SLIDES HERE

Key Takeaways

  • Governments around the world are using the pandemic and recessionary conditions to consider a new focus of coordinating monetary and fiscal policies that touch on themes described within modern monetary theory.
  • This paradigm will maintain the push towards flat or negative bond yields which will have significant implications for the pricing of all other asset classes.
  • Given that the range of outcomes is so vast the prudent approach from investors will be to consider a number of forms of diversification and seeking to spread the geographic risk entailed with overweight allocations to the US.