A phrase, or variation of it, that is increasingly used by fund managers is the equivalent of the sportsman’s or politician’s cliché “cautiously optimistic”. This year they have been describing their investment strategy as being in “conservative risk-on mode”.
It’s not a particularly attractive phrase, and it is more often deployed by equity investors than bond investors, but it accurately reflects the dichotomy at play. On the one hand, a great deal of scepticism remains about a resolution of major problems in key economies throughout the world, which should temper an enthusiastic plunge into markets on the other hand, the liquidity that has been pouring from accommodating central banks since...
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