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Language Notification

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

The-coming-financial-repression

Perspectives

The coming financial repression and why investors will not be paid to sit on the sidelines

David Bailin

By David Bailin

Chief Investment Officer

October 26, 2020Posted InFixed Income, Investment Strategy and Equities

  • We think 2021-22 will be a period of strong economic growth and solid market performance. Markets will be driven by a recovery in depressed industries and a consolidation of gains for sectors that have already boomed.   The four reasons are 1) highly likely viable and available vaccines 2) a rebound in trade and industrial production 3) pent up demand for services and 4) fiscal stimulus globally.

 

  • The Fed is likely to keep shorter-term interest rates atypically low for years to come. This “Financial Repression” has major implications for portfolios.  Higher equity allocations are recommended as bonds will provide fewer diversification benefits.  Our most important observation is this:   We think that investors who are waiting for attractive real interest rates and depressed equity valuations may spend a great deal of their investment lives waiting for a “better time to invest.”

 

  • Many investors assign greater anxiety to the fear that that their decision to invest today will be poorly timed and suffer immediate losses.  Therefore, investors appear to believe that if they enter markets “early” and suffer initial losses, they will lose more than if they had “just waited”.  Case in point: During 2020, when markets were in turmoil due to the largest exogenous shock in a century amid COVID-19, missing just the two best days would have reduced an investor’s return in US equities by 19.3%.

 

  • Global investors have always behaved tentatively before recent elections.  Tentativeness – fear of policy uncertainty – has abated only after the election uncertainty has lifted.  Yet, when we look back, global equity fund inflows have followed each of the prior four US elections.
Read the CIO Strategy Bulletin

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