Why central banks are like gorillas

ON ASSET ALLOCATION

Saltus' Dan Kemp explains how the action of gorilla-like central banks is forcing investors to be increasingly short term in their outlook.

Question: Where does a 500 pound gorilla sit? Answer: Anywhere it wants to. Although useless as a source of merriment, this old joke provides a useful insight to the challenges facing asset allocators in the current environment. The gorillas in question are central banks and policymakers, who are throwing their weight around the capital markets by deliberately manipulating asset prices in an attempt to create a sustainable recovery. Although driven by a common goal, the challenge faced by each country is different and often contrary to each other. As a result, several conflicts are...