- Despite the market ructions witnessed in February, nothing seems to deter investors for long. A strong cyclical backdrop and robust earnings growth seem to forever ratify the prevailing ‘Buy the Dip’ mentality.
- Yet, take a step back and you can see momentous transformations taking place. Markets have digested their initial shocks well, but these may simply represent the vanguard of a much broader shift in the prevailing investment paradigm.
- These tectonic shifts may not immediately affect asset prices, but they will eventually reach a point at which they could fundamentally alter the way investors view, and value, risk assets.
- As a result, it is time to scale back risk, in particular in US equities and long term rates.