Although many investors welcomed the new year with fairly high hopes, the markets have been on a stomach-churning ride since the start of the year, wrenched up – but mostly down – because of alarm over a slowdown in China and the plunging price of oil to $29.70 a barrel last week, its lowest level in 12 years. European shares ended on Friday at their lowest since mid-December 2014, hit by losses in commodity-related stocks as BHP Billiton announced a major write-down. The Dow Jones was also down almost 10% since the start of 2016 with S&P 500, Nasdaq and Dow Jones down by 2.17%, 3.34% and 2.19% respectively for the week ending January 15, 2016.
Investors are becoming increasingly nervous, having already pulled $12.4bn from US equity funds since the start of this year, FT reports. Similarly, European investment funds counted net withdrawals for the first time since the start of October 2015. Investors have favoured the relatively low-risk money-market funds, which attracted $10.4 billion last week while treasury funds attracted $1.9 billion. Nevertheless, persistently low interest rates mean commercial paper and government bonds do not provide investors with compelling risk-adjusted returns. Thus, global institutional investors display continued appetite for real estate because it offers returns that they cannot currently reasonably achieve with a similar risk level in bonds.
Source : BrickVest