Investment Strategy and Portfolio Management - 2 Essay

Investment outline and Portfolio Management - 2 - Essay ExampleThe move towards conservatism is a reaction to the recent crisis, as more people worldwide felt that not enough regulation was exercised by the government to go over risky instruments and markets. However, there is also a possibility that a more protectionist attitude may restrict the new administration, which may hamper economic result. The more conservative economic policy may lead either way it could provide a more stable environment for business by eliminating risks, however at the same time it might limit business opportunities. Thus new directions must be carefully watched post-election.According to the Wall Street Journal report, this years treasurys calculate deficit forecast, at 12.6%, remains to be the highest in the nations history, while forecasts for 2011 to 2011 economic growth appear to optimistic. Tax receipts remain weak be motility of the poor earnings level in twain the business and household sec tors of the economy (Norman, 2010). However, the Office of National Statistics reported that the UK economy actually grew by 0.1% for the uttermost quarter of 2009, the first following six quarters of economic contraction. It may not be determinate that the recession is ended, but it does provide a hopeful sign which may be confirmed in the coming quarters (Angus Reid, 2010)According to Price (2010), the current high levels of US government debt is a cause for worry. The uncertainty in the possible outcome of the credit tug-o-war itself exerts pressure on the market to perform with great volatility (erratic price movements). Price notes that the supply of gilts is moving upwards consistently, and together with it the UKs credit fundamental principle go out continue to quickly deteriorate. What would be worse is the threatened debt downgrade from one of the ratings agencies. This could mean that the UK will be able to source additional debt only at higher interest