Alex Borer

“This month we reverse our tactical shift of last month and buy the 5 per cent equity exposure back and reduce the winning government bond position accordingly. Equity markets sold off on the back of the European sovereign crisis. Continued worries and overreaction by investors call for an anti-cyclical tactical portfolio strategy. Of course there will be deflationary pressure in Europe based on waning fiscal policy support. But first, Europe is not the world and second, equity markets do not necessarily enter into a bear-market when economic indicators begin to soften. Valuation support for risk assets is considerable.”