- The consensus has been disturbed by inflation fears, raising worries about tighter monetary policy, higher bond yields and the interest rate sensitivity of equity markets.
- When the primary cause of equity market volatility is rising rates, the traditional portfolio diversifiers, government bonds, are unlikely to offer protection.
- At the start of the year, we were concerned about the level of short-term consensus even though we ultimately agreed with broad consensus views over the 12-month horizon of 2021.
For further details see:
Recoveries Are Rarely Straight Lines