Central Bank Bull Market

Excerpt from a conversation with S Naren (CIO ICICI Prudential MF)

1. Central Banks across rue globe pumped in more than $28 trillion when debt , equity and commodities markets crashed in March 2020 after the coronavirus outbreak. That gave rise to a "Central Bank Bull cycle"

2. Entire amount so far has gone into assets, leading to asset inflation which makes everyone feel rich and happy. At some point in future, that money will seep into prices and cause price inflation, then the day of reckoning will come.

3. Individual investors can survive this using disciplined asset allocation. Diversified holdings in equity, debt and gold are key in a central bank bull market and investors should not get drunk on leverage and think this bull market will go on forever. If an investor is caught in only one asset class when the inflation turns, they will be in trouble.


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