Where next for investment markets?
The continued rise in markets around the world can perhaps induce complacency in investors. Many believe that equities are the only place to invest.
We mustn’t forget though that the quantitative easing that dominated the press not so many months ago hasn’t gone away. Bond markets have spotted that Governments are beginning to make more noise about unwinding this debt and there are (currently gentle) moves to do so. This unwinding of debt will necessitate tightening economic policies and markets will react. How large the reaction is will depend on the severity and pace of the unwinding. So taking it gently is the strategy but it needs to be ‘just right’ not to spook the markets.
Staying invested has invariably been our recommendation to clients, as long as diversification and regular portfolio monitoring are part of the investment process.