Balancing short-term risk and long-term opportunity the key to better returns

How are we to read the recent ebullience in the market? Our instinct is these highs are indicative o...

How are we to read the recent ebullience in the market? Our instinct is these highs are indicative of a bear-market rally. Valuations for certain cyclicals are now looking stretched as all boats have risen with the tide. Indeed, some charts suggest many of these areas are now looking extremely overbought when compared to more defensive sectors. In order for this rally to look sustainable, we believe it needs to broaden out, something it is showing few signs of doing yet. We are also wary of the level of optimism in the 'green shoots' theory that continues to grip markets - this also shows...