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

Advisers zoomed in on capital accumulation in Q4 2025

Advisers zoomed in on capital accumulation in Q4 2025

Titan Square Mile research finds

Jen Frost
clock 30 January 2026 • 3 min read
Measure for measure: How to track your tracker fund

Measure for measure: How to track your tracker fund

Tracking difference and tracking error

Terry McGivern
clock 28 January 2026 • 3 min read
SJP and AJ Bell pivot from US mega-caps in MPS as concentration woes continue

SJP and AJ Bell pivot from US mega-caps in MPS as concentration woes continue

Healthcare, energy and EM preferred

Linus Uhlig
clock 28 January 2026 • 2 min read