Investors may be rethinking the inherent riskiness of equities, especially compared to bonds. It’s a logical response to seismic shifts in the euro sovereign debt markets.
Normally, shares would be expected to suffer alongside bonds at these troubled times. After all, equities come at the bottom of the creditors’ pecking order, making them among the riskiest of financial assets. Investors might be expected to flee from stocks since bond market woes reflect, at least in part, fears of recession.
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