A Second leg down

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Why Are Equity Investors So Upbeat?

 

We think of investment markets as largely driven by two moving parts: inflows of liquidity and the portfolio exposure of investors to risk assets. The first leg down in a bear squeeze often comes from falling liquidity: the second leg down comes from greater risk aversion. Using US data, we show that this comprises both a lower demand for equity risk and the greater supply of government bonds.

 

 

 

See our latest published research, Global View Why Are Equity Investors So Upbeat? - June 2022

 

 

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