Home Capital Tong's Portfolio

Reallocating sector exposure with higher inflationary expectations

Asia Analytica
Asia Analytica10/14/2021 11:35 AM GMT+08  • 6 min read
Reallocating sector exposure with higher inflationary expectations
Inflationary pressures will not be as transient as initially expected and some of the higher costs may well be permanent.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Investing in global stocks is, undoubtedly, a winning strategy, particularly since the global financial crisis and against a backdrop of low and lower interest rates. The Covid-19 pandemic may have ended the longest US bull market in history, but stock prices rebounded very quickly and strongly. Notably, each correction has been relatively shallow and short — following which stock prices have inevitably gone on to record higher highs (see Chart).

The key driver underpinning this remarkable rally is liquidity. Major central banks have been aggressive in expanding their balance sheets for more than a decade through quantitative easing and injecting massive liquidity into the global financial system. Governments, too, have given out generous stimulus/relief monies to the people in response to the pandemic — resulting in trillions worth of excess savings worldwide.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.