Being brave this year has mostly in part been rewarding. And continuing that bravery throughout 2019 probably won't. Inflation is worrying me and worrying our team because actually it’s one of the ways you see a reversion to historical norms and given the concerns over the lack of wage inflation in the last decade. We think Central Banks will intentionally be behind the curve that will initially probably boost risk assets but be a very painful cliff edge when they finally start to catch up.
We are expecting for next year quite decent return. But this return should be associated with a much higher level of volatility, more risk in the system because there is nowhere to hide. Traditionally when you are facing on spreading tops type, the place to hide was made of funds. And this time as of today, year to date returns are more or less negative for any type of assets except for US equities. So surprisingly, the place to hide was perhaps made of US equities. The story now is to know how long can it last.
A lot of what happens in the fixed income markets will feed into the broader arena. Certainly, it has already in 2018 and we're expecting it to do as well in 2019. We're coming into a period of, exiting a period of quantitative easing and moving into a period of quantitative tightening. It does give us pause and it does make us think that now is the time to be looking at quality assets, how we want to be positioned relatively conservatively.
Frankly speaking, yes. We are facing a unique moment and the only thing we have to consider now is to talk about unprecedented situation.
2019 isn't the time to be brave and realistic. It’s the time to you know lock into yields higher than you're seeing the prime markets. And I guess the things that worry me are if interest rates or inflation take off more rapidly than everyone's expecting. The investment grade buildings at sort of 4% yields are much more attractive and much less likely to be damaged if you get a surprise uptick in interest rates than if you've already paid 2-2.5%.