02 February 2010 at 14:26 GMT
Our Asset Allocation Model is maintaining an “Outright Bullish” stance after having changed from “Outright Bearish” five months ago. The reason is a sharp turnaround business activity (according to our Global Business Cycle Indicator) and that means that the overall allocation has changed and now recommends a bigger, net long (however moderate) position in equities and larger exposure to commodities.
Our global business indicator is an expression of how much global economic activity is accelerating or decelerating. We now have strong acceleration, but it is from a very low starting point in the beginning of 2009.
Risky asset classes should do well in this market, despite significant rises in stock markets already. However, if we get a gadual recovery, stocks and commodities could extend their gains.
We have changed from the suggested +10-year maturity bonds to a maturity no longer than three years, as we fear that irresponsible fiscal policies will lead to a bond market dislocation – hurting the long-maturity bonds the most.
Download the Saxo Asset Allocation for February