Pretty much in-line with the standard view on Wall Street these days – buys stocks, sell bonds, buy commodities, etc. (via JPM):
- Economics
Our Japan growth forecast is raised, but the UK is cut. Our global growth forecast for 2011 is unchanged at 3.5%.
- Asset allocation
Our top performers for 2011 should be equities and high-yield. But do include commodities on tight supplies and their good diversification value against certain inflation and political risks.
- Fixed Income
We go short duration in Treasuries, with yields near the bottom of their recent range.
- Equities
Rising geopolitical and inflation risks favours an OW in Commodity sectors and an UW in EM equities.
- Credit
Overweight high quality CMBS as property prices recover and vacancy rates decline
- FX
Be long EUR/USD, and short GBP versus EUR, SEK and CAD.
- Commodities
OPEC likely to increase production gradually from here, but we still expect Brent to break well over $100 this year.
Source: JPM
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.