FT Adviser essay considers the factors influencing the financial markets & wealth preservation .. low interest rates have driven investors away from bonds to speculate in stocks in which both the risks & potential rewards are higher .. emphasizes the negative effects of inflation & low interest rates on investments .. “Bonds are nominal assets rather than real assets, so they do not grow their income in order to counter inflation. This fact, along with the prospect of interest rates rising to counter higher expected inflation, will be on investors’ minds. Once investors have moved to high-yield bonds, the step up the risk curve to equities is no longer a million miles away – the advantage being that equities are real assets, and so may be expected to grow in line with, or even ahead of, inflation.” .. highlights the effects of financial repression on keeping interest rates close to 0 to stimulate the economy .. 

LINK HERE to the article

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