The three factors we need for a strong equity rally

Aberdeen's multi-asset specialist Mike Turner has outlined three crucial factors which must be aligned to support a sustained equity market rally.

The manager of the £571m Aberdeen Multi-Asset fund expects to see another sell-off in markets this year before stocks are able to repeat their performance of Q4 2011.  “For stock markets to perform, three things have to be aligned: the direction of global growth momentum, liquidity and valuations. All these have to be positive to get a sustained rise in markets such as we saw in Q4 last year,” he said. “At the moment we have one and a half out of the three, because we have attractive valuations and some liquidity through the implementation of Operation Twist and Bank of England asset p...