The investment risks of quantitative easing

Quantitative easing may have prevented a follow-up recession, but the real problems persist

The unconventional monetary policy stance of quantitative easing (QE) that central banks employed after the 2008 recession has had the desired effect. It has managed to improve global economic growth even though this has been at a snail’s pace. The policy however holds various market, economic and investment risks and challenges, which indicate that QE is not a permanent solution to the world’s economic problems. It has bought us time, but the underlying problems still need to be fixed. Eventually the distorting effects that QE has on the markets and the fact that investors are forced to take on more risk will take its toll.