Overpriced assets are no insurance against adverse economic developments
The priciest stocks, tech ones, have alarmingly become ‘safe havens’
Any review of the holdings of global pension funds, unit trusts, hedge funds, passive exchange traded funds (ETFs) and retail investor portfolios shows that almost all are heavily exposed to a narrow group of securities.
Few global portfolios are not dominated by stocks that represent the winners of the past three years: US large caps, technology, growth and quality. We are also witnessing a global capitulation, out of what has not worked in recent times — especially cheap stocks, value funds, emerging markets, and contrarian investment strategies...