David Jane: Why investors must look across asset class boundaries

One of the principal features of the current, long-running period of ultra-low interest rates and inflation has been the distortion of asset prices. Investors now seek returns from riskier assets because the prices of lower risk assets are inflated by central bank intervention. This is nothing new and has been the case for some time, but some of the anomalies created by this effect have become extreme. In the perfect world envisaged by market theorists, particularly those in the ‘efficient market' hypothesis camp, all obvious anomalies would quickly be arbitraged away by return-seeking i...