Huge Flood of Capital to Invest Spurs World-Wide Risk Taking.

The article reports on a major trend in global investment. There is an unprecedented amount of capital to be invested and owners are anxious for the best return they can get. World pension, insurance, and mutual funds have $46 trillion to invest and global central bank reserves have doubled to $4 trillion. Other measures of available capital have also increased. Investments are being made into risky assets, including emerging markets, real estate, commodity funds, fine arts, and private equity funds. Low short-term interest rates at world central banks are also having an impact on the amount of capital being invested, since leaving cash in a money market account would have little yield. The article considers the source of all this capital and suggests that there has been a global savings glut and that corporate profits are at record levels.