Wise investors should resist the urge to flee, reduce their holdings of risky assets and stare down the bear.
Already central Banks have relaxed their rules on what they will accept from Banks as collateral, which has helped to support the prices of risky assets.
"When the housing and mortgage markets cratered, the lack of transparency, the extraordinary debt loads, the short-term loans and the risky assets all came home to roost," the report found.
So we expect the risky assets' price to recover, sooner or later.
Second, undo the effects of uncertainty on the portfolio side, and help recycle the funds towards risky assets.
Very low short-term interest rates also encourage investors to seek higher returns by moving into risky assets such as equities and corporate bonds.
"Using TARP authority for any purpose other than purchasing risky assets from troubled financial institutions to address an emergency in our financial system is inappropriate and illegal," he said.
It affects portfolio decisions. It has led to a dramatic shift away from risky assets to riskless assets, or at least assets perceived as riskless.
In RECENT years the yen has been a profitable carry-trade currency, used by investors to borrow cheaply in order to splurge on risky assets around the world.
Payrolls will determine whether risky assets end the week on a high.
Germany must stop dithering over what to do about its Landesbanks - regional institutions that had an unusual predilection for risky assets.
On the days when risky assets fall (like September 21st) the dollar tends to go up.
Citing two persons close to the plan, the newspaper said RBS could exit by the end of this year the program set up to protect U.K. Banks against bad or risky assets.
The passing of the stress test 'event risk' may propel risk higher in the near-term, but with more questions raised than answered, we think gains in risky assets are likely to prove unsustainable.
In one class of models, misperception of risk generates excessive demand for risky assets, housing and financial assets in particular.
So at times of trouble they will retreat from risky assets such as hedge funds and into cash and government bonds.
That would mean that everybody is holding that same portfolio of risky assets and nobody is different, they're only different in how — what proportions they hold the risky — the tangency portfolio.
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