Here's today's headline from the Australian Financial Review: "Upgrade to shares, RBA tells savers"
The Reserve Bank of Australia has signalled that interest rates are so low investors should shun low-earning term deposits in favour of riskier assets such as new housing and shares...
..Colonial First State Global Asset Management’s senior portfolio manager Naz Ressas recently said: “One of the unintended consequences of lower interest rates is investors will in their search for yield buy assets regardless of their risk.”..
..RBA Governor Glenn Stevens said: "Savers are facing increased incentives to look for assets with higher returns"..
Read more here; http://afr.com/p/national/economy/upgrade_to_shares_rba_tells_savers_PcuN1r6AX1ykEOLM1nYmRI
So even our central bank chief is encouraging investors to take on added risk by chasing higher yields. Given the global risks that clearly remain, Glenn Stevens & leading fund managers will rue these comments if investors get burnt by their newly adopted bullish positions.
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