The growing use of leverage amid calm markets and rising stock prices could ultimately hurt investors, according to Allianz SE's chief economic adviser Mohamed El-Erian.
The growing use of leverage amid calm markets and rising stock prices could ultimately hurt investors, according to Allianz SE's chief economic adviser Mohamed El-Erian. Building up risk on the assumption that markets will remain stable has historically been a self-fulfilling prophecy, El-Erian has told Bloomberg. "The more you leverage your positions, the more the markets are calm," he said. "The problem with that is you get to a tipping point at some stage." Volatility in US stockmarkets reached the lowest level since 1993 this week, as investors focused on strong corporate ear...
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