Remaining too cautious on your investments could leave your portfolio subject to the dangers of inflation, an investment manager has warned.
Even as both interest rates and inflation sit at record low levels in U.S. and European economies, Chris Wyllie, chief investment officer at Connor Broadley, told CNBC Thursday that remaining defensive on assets could be a bad move.
"At a time when interest rates remain extremely low – less than inflation – it's a reminder that being defensive, being cautious in markets comes with a cost," Wyllie said.
Bank chiefs as well as senior economists have advised central banks to gradually start exiting the ultra-loose monetary policy environment.
Earlier this week, Deutsche Bank chief executive officer John Cryan called on the ECB to change course on providing cheap money, warning he sees price bubbles in stocks, bonds and property. Low interest rates add pressure on bank's margins thus making it difficult for banks to make profits.