On reaching for yield and ECB QE

I believe investors are reaching for yield and there are multiple signals indicating such. This is a direct outgrowth of easy money policies by central banks as nominal yields are at record lows and real yields are negative.
Investors, particularly pension funds, are having a hard time adjusting to the new monetary regime of financial repression and low nominal returns. Pension funds will have to reach for yield, take on risk, or run the losses from the new investing climate through the balance sheet and income statement, lowering income for the companies they are attached to.
Insurance companies can charge higher rates on policies. But pension funds have to meet the new lower nominal return environment by either moving out the risk spectrum to maintain return or by recognizing their p...


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