High yield and equities best value in summer of discontent

ON ASSET ALLOCATION

ELLIOT FARLEY, manager of the T. Bailey Dynamic Cautious Managed fund and Defensive Cautious Managed fund on Asset Allocation

Now is the summer of our discontent. The markets look as unsettled as the weather – and just as unpredictable. The macroeconomic news is gloomy; leading indicators are rolling over; the global liquidity position is tightening, and there is little sign from central banks they are ready to inject more liquidity. Ben Bernanke agreed to reinvest proceeds from maturing mortgage-backed securities, but this merely maintains the liquidity status quo. The aftermath of the sub-prime carnage remains in the US, with the housing market struggling and consumer confidence rocky. The hope was that, h...