A two-way street: It’s not just one-way traffic; property capital flows traverse Europe and Asia
As investors — institutional and retail, corporate and individual — we are told that we should diversify as a way of spreading and reducing risk. Diversify away from the domestic base into other asset classes, sectors, geographies and currencies. Our liabilities — usually a payout of retirement income of one sort or another — will remain domestic in nature but until that payout is needed we should play with the full range of available investment vehicles in an effort to stabilise returns, reduce risk, maybe get some outperformance and help achieve a fund level that will give us the desired outcome and income. They say that diversity is the spice of life. And we’re all different. What do we do when everyone has diversified? When we’re all facing the same risks?
Bizarrely, this is what appears to be happening. As the world develops, as the dividing line between developed economies and emerging markets becomes blurred, so an investor homog