Time for risk-rebalancing as inflation climbs

clock

Elliot Farley, fund manager at T. Bailey, explains how inflation has caused a dynamic shift in what we traditionally perceive to be low-risk assets.

It used to be so simple: “Cash safe; equities risky”. Bonds were somewhere in between; gilts nearer to cash and high yield corporate bonds closer to equities. Picture it like a child’s seesaw with the cash child sitting on one end, bottom comfortably close to the ground, and equities up in the air, legs akimbo looking slightly nervy. But the current combination of low interest rates, escalating taxes and rising inflation has had a dramatic impact – it is like the class heavyweight clambering on board the high end. Our understanding of general risk in the current environment has theref...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Committee warns of Treasury 'passivity' on financial stability private markets risks

Committee warns of Treasury 'passivity' on financial stability private markets risks

Concerns around gap in policymakers' evidence

Patrick Brusnahan
clock 12 January 2026 • 2 min read
Darius McDermott: The lessons from 2025 and opportunities ahead

Darius McDermott: The lessons from 2025 and opportunities ahead

'2025 has been a salutary lesson in the difficulty of timing markets'

Darius McDermott
clock 07 January 2026 • 5 min read
Trump, Modi and US-India trade tensions – who cares?

Trump, Modi and US-India trade tensions – who cares?

A bottom-up approach to finding hidden gems

Gabriel Sacks
clock 02 January 2026 • 4 min read