Investors should take the long view
Global investment manager Standard Life Investments has joined the chorus of those suggesting that investors are increasingly ready to exit cash and other so-called "safe haven assets".
In an analysis published in its latest Global Outlook, Standard Life Investments highlights the benefits of investors making longer-term return estimates based on thorough research and a repeatable investment process.
The company said it believed that the discipline of making a long-term estimate forced investors to decide on credible key assumptions and assess the sensitivity of the final numbers, helping them to align risk to long-term investment return objectives.
Standard Life chief executive Keith Skeoch said 2012 had seen stock-picking rewarded as investors started to look through the big picture, as could be demonstrated by the performance of many equity funds.
"Robust equity returns at a time when macro concerns remain high may be a sign that the nature of returns are changing, back to a focus on the fundamentals, the importance of research and a robust and repeatable investment process," he said.
Skeoch said the long-run signals suggested the returns environment shaped by the post-crisis world was starting to change.
"I firmly believe that it was never a question of simply 'risk on, risk off', but more 'where is risk likely to be rewarded?'," he said.
"History and common sense suggest that, looking forward, this is unlikely to be the safe-haven assets, where prices are still close to 100-year highs," Skeoch said.
"It will take time for the new return environment to emerge. However, there is an increasing probability that it will do so in 2013."
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