Equities likely to be hit by a long-overdue correction

ON ASSET ALLOCATION

Premier's David Hambidge discusses why he is reducing his exposure to equities.

It is nearly two years since equities hit their trough and investors have decided it is time to fill their boots with stocks and abandon the pitiful returns available on cash during the same period. This is according to the Merrill Lynch Fund Manager Survey. The global economy is looking in better shape, certainly in the US, which is still the most important driver of world growth. We have seen encouraging manufacturing numbers, strong consumer confidence surveys and more encouraging news on jobs recently. Corporate earnings have again been stronger than forecasts and it seems logical th...