Richard Bernstein was out with a piece in the FT today describing why he believes investors should focus on safer assets. He says the risk-on rally in beta names won’t last:
“Investors use the hackneyed term risk-on to refer to assets that have tended to outperform when investors are bullish. Commodities, real estate and emerging markets would be prime examples. Risk-off assets are perceived haven assets such as US Treasuries, German Bunds, the US dollar and even US stocks.”
Bernstein has long maintained that the better values in this environment are the high quality assets:
“Risk-off assets will likely be the secular investment theme of the 2010s. US-based assets (both stocks and bonds) continue as our favourites. In fact, this significant secular shift is already under way. Despite the recent attention-grabbing rally in risk-on assets, the S&P 500 has outperformed Bric equities for more than four years.”
Read the full piece here.