David Thomson: The answer to the risk-on/risk-off dilemma is to hold a bit of both
RISK-ON or risk-off is a relatively permanent question for many active investors that tends to have implications across the spectrum of asset classes.
Certain assets, such as equities or currencies, are perceived to be risk-on while others are believed to be safe havens – or risk-off.
The latter are generally the type of assets investors will turn to when economic or market conditions do not look favourable.
Deciding whether the environment is risk-on or risk-off is difficult enough for investors in the prevailing environment, which has seen the market distorted by quantitative easing (QE).