How Income Investors are Still Feeling the Recession

2017 will mark the 10-year anniversary since the onset of the global financial crisis. Since this time, investors have found it increasingly difficult to find income

Richard Whitehall 24 January, 2017 | 12:22PM
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2017 will mark the 10-year anniversary since the onset of the global financial crisis. Since this time, investors have found it increasingly difficult to find income from traditional sources such as cash or fixed income. This is mostly attributable to authorities worldwide using aggressive monetary policy to try to boost their flagging economies.

At first, central bank base rates were slashed close to zero, followed by the introduction of quantitative easing and in some countries, negative interest rates followed.

This collapse in yields was an acceleration of a trend that began in the 1990s as inflation expectations fell. The causes of which are widely considered to include China’s increased participation in world trade, demographic changes in the developed world and inflation targeting by autonomous monetary authorities.

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About Author

Richard Whitehall

Richard Whitehall  is a portfolio manager for Morningstar Investment Management