The whole market has reached an inflection point and investors must now start to adapt to life without "massive stimulus", according to Psigma manager Bill Mott.
Mott, manager of the Psigma Income fund, said Fed chairman Ben Bernanke's 22 May speech hinting at a slowdown in quantitative easing in the second half of 2013 marks the end of the 'Big Ease'. That is the case even if QE continues for a while yet, according to Mott, who has begun to adjust to the changing situation by cutting "bond proxy" equities such as utilities. "Fed officials have been moved to say that they would not do anything hasty and that they will only "taper" if the economic recovery is sufficiently strong. This has rallied markets, but we think the ‘cat is now out of the...
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