Roberts Nash Advisory Group

August Asset Allocation: Start With Why

Why do we have central banks? We argue that, in its most basic form, the main purpose of having an independent institution in charge of monetary policy is to smooth out the inevitable ups and downs of business cycles so that a society and its people can achieve their full growth potential without the adverse effects of wild economic fluctuations. Looking at U.S. data going back 164 years, we do observe a significant and gradual reduction in the vagaries of the economy after the creation of the Federal Open Market Committee (FOMC) in 1935.

How do central banks manage to achieve their ‘why?’ While there are some nuances from country to country, the ‘how’ of all modern-day major central banks evolves around ensuring stability in prices (inflation) through the use of monetary policy.

Full Report

** I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial **

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