WHY IT'S TOO EARLY TO RETREAT FROM RISK
CIO MONTHLY | FEBRUARY 2018
Although confronted with a maturing growth cycle and the likelihood of more modest returns, strong growth is widely expected to persist in 2018. We discuss why it's too early to retreat from risk, and highlight five macro and market signals we need to keep seeing in order for us to stay engaged with risk.
As we've exited 2017, an outstanding year for markets and one where risk assets have performed handsomely, we find ourselves still immersed in an increasingly robust and synchronised global growth cycle—indeed, the most synchronised in over a decade.
The end of 2017 also delivered other up-beat signals. These included continued low global inflation that seemingly ensures only a modest rise in interest rates; US tax reform that stimulated growth and earnings; as well as geo-political risks that barely simmered. Consequently, asset markets advanced, and fears about a sharp correction have surfaced.