American humorist Will Rogers presciently pointed out a long time ago that he was more concerned about the return of his money rather than the return on it.
In case anyone doesn't understand, Rogers' observation is a metaphor for what's going on big time in today's markets as investors scramble for yield while turning a blind eye about the risk to their capital.
As this Thursday approaches and the nearly consensus market expectation the ECB will roll out some form of QE, interest rates are likely to head lower once the economic cards hit the table in full view.
In a world of falling interest rates or one central bank instigated and supported with a put option, investors will be scrambling for yield more than ever.
Such a scenario would bode well for safer dividend yielding stocks and certain asset mangers who can out perform returns investors get from traditional accounts like savings and CDs.
If you feel the limb getting slimmer and slimmer as investors scoot farther and farther away from the trunk, you're probably onto something.
One might say the interest rate and yield climate is the opposite of what's going on in the oil market where any positive news is being totally ignored and only the negative given any traction as many Wall Street firms that completely missed the oil downturn are only now tripping over each other to get out their most bearish reports.
In our view too many investors are expecting QE European style to mimic what QE American style did at least in part and that is keep volatility in check.
That's a meter for the last couple of years that's been relatively flat.
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