Interesting article from work:
Article of Interest – The Cost of Safety
Safety first is the name of the game for many investors right now. And with wild day-to-day swings in the markets and hugely divergent performances by securities within the same asset class, who can blame them?
Tolerance for risk is at extremely low ebb, a development reflected in the fact that yields on risk-free assets are at historic lows?in the case of US Treasury bills at levels not seen since World War II.
Yet this risk-averse behaviour masks one of the paradoxes of investment.
In good economic times, when comfort levels are high, the expected return from risk assets is less favourable. In those times, the cost of our willingness to take a risk is a lower expected return.