We asked 6 big money investors about their biggest market fears — and they all had the same answer
AP Images / Bernd Kammerer
What keeps you up at night?
It's a question you'd expect to draw a wide range of responses when posed to investors responsible for tens of billions of dollars. After all, it's not exactly like there's a shortage of anxiety-inspiring headlines floating around each day.
But as Business Insider found out through a series of interviews, there's one worry to rule them all: the Federal Reserve's reversal of the unprecedented monetary stimulus that helped drag the US out of the last financial crisis.
More colloquially described as the Fed "unwinding" its balance sheet, the mere prospect of it happening is apparently enough to strike fear in to even the most experienced money manager.
Don't believe us? See for yourself. Below is a collection of excerpts from seven interviews conducted by Business Insider, many of them by deputy executive editor Matt Turner. Each of which arrives at the same potentially horrifying conclusion.
Watch all of Turner's interviews here.
Mike Ryan — Chief Investment Strategist for UBS Wealth Management Americas ($1.1 trillion AUM)
His biggest market worry: "One of the things that always keeps up at night is the risk of a policy mistake. I tell people, 'Look, every time I checked, every one of the central banks all around the world, the pencils come with erasers at the top.' There's no infallibility. Vatican City's the only place that claims infallibility. Central Bankers do not have that, nor do they claim it. We have to also understand we're living through what has been the greatest monetary-policy experiment in history. We've never seen this before.
"Think about the Federal Reserve, the Bank of England, the European Central Bank, Bank of Japan, what they've all engaged in is this extraordinary balance-sheet expansion that commonly has been known as quantitative easing. That's been extraordinary in terms of helping stabilize markets and allowing the economy to recover. Now we're in the process, the very early, beginning stages of policy normalization. That's going to be a bit of a challenge, so there is no rulebook, there's no guidepost to how we do this.
"I think what it's going to require is very prudent actions by central bankers; they're going to have to be cautious in terms of how they apply policy changes. They're going to have to be very open and transparent with markets about what they intend to do and what they are doing. I'd say, if you ask me what the biggest concern I have, is for a policy misstep. It's that somewhere along the line, central bankers get it wrong, either they move too quickly or they move too slowly."
Dennis Ruhl — Chief Investment Officer of JPMorgan's US Behavioral Finance Equity Group
His biggest market worry: "A few a different things. One, of course, there's the possibility that in the unwind of QE, something huge happens. I think that that's more likely to stem from another region of the world outside the US — not a huge likelihood, but it worries me."
Mark Haefele — Global Chief Investment Officer at UBS Wealth Management ($2 trillion AUM)
His biggest market worry: "For us, the No. 1 concern is Federal Reserve policy. If they remove too much stimulus too quickly, if they raise rates too fast, that would be a likely cause for the economy to turn down. Basically, it's this idea that they start to take away the punch bowl."
See the rest of the story at Business Insider
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