WAVERTON – THE RISK OF DOING NOTHING

Hardly a day goes by without a story that financial markets are in “bubble” territory. Stock markets around the world, including the FTSE All-Share, are at record highs and bond yields are at record lows. The former means that valuations are at the upper end of historic ranges. The latter has meant that many unusual things can be sold to investors anxious for yield. Recent examples include a 100-year bond with a coupon of just 2.1% that raised €2.5 billion for Austria. Possibly a better risk than the three 100-year bonds issued by Mexico in recent years but at least the Mexican government prints its own currency.