Olympics and elections will distract from anaemic growth

ON AA

Setting a firm strategy for the whole year is difficult given there are still so many moving parts, but for now we prefer to proceed with caution, with several ‘insurance policies' remaining in place.

Nervousness about the eurozone’s future remains, but markets are braced for some form of fragmentation. While eurozone sovereign debt troubles are expected to rumble on, there is perhaps greater scope for, and willingness by, the various authorities to find a longer term solution than there was just a few months ago. Defensive companies with high and increasing dividends retain their appeal, although bouts of perceived market or economic calm could see the risk tap turned on again, in which case more defensive, equity income funds could underperform and growth companies could do well aga...