Why it’s time for investors to consider other options such as buying businesses
Mark Haefele, Global Chief Investment Officer at UBS, makes a case for why, in these times of falling yields and fewer investment opportunities, investors need to up the ante and consider less liquid investments e.g. buying private businesses. He argues that the lack of liquidity with these investments is more than compensated for by the better risk-adjusted returns, ineffieciencies in the private market (making for better opportunities) and the greater social / environmental impact achieveable through these investments.
As mentioned in my most recent letter, the Bank of England’s actions after the Brexit vote have exerted downward pressure on global yields. This has clearly benefited risk assets, but the persistent low-yield environment poses challenges for investors.