Investors make a return tohigher risk

The flight to safety following the events of 11 September appears to have ended, with higher-risk, higher-yield investments returning to popularity as investor confidence in a global recovery starts to pick up

In the flight to safety that immediately followed the 11 September terrorist attacks in the US, corporate bond prices fell in tandem with equities as investors shifted into Treasury bonds and Swiss francs. Liquidity in corporate bond markets dried up, new issuance ground to a halt, and the yield difference over government bonds widened. However, in response to aggressive monetary easing by the Federal Reserve and a substantial fiscal stimulus by the Bush administration, investors soon began to anticipate a US-led global economic recovery in 2002 and shifted their attention back to higher...