There is no change to the risk budget this month. For the moderate risk investor the allocation to bonds is 50%, risk assets 45% and cash 5%. The extreme overbought condition of the US stock market persists so I will continue to hold a modest amount of cash. There are some minor changes within the portfolios but the overall allocation [...]
The S&P 500 made a new high last week, finally closing over the 1900 level. European stocks were also higher on the week and have continued the rally today even after election results over the weekend showed an uncomfortable gain for some parties that are, well, let's just say that some of their ideas are not exactly in keeping with [...]
In light of the current low interest rate environment, we are watching particularly closely for instances of "reaching for yield" and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals. It is worth emphasizing that looking for historically unusual patterns or relationships in asset prices can be useful even if you believe that asset [...]
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