Why 'cyclical trade' may run to end of 2017 but is not a multi-year proposition

Performance of commodities has big impact on markets

Ian Brady, CIO and director of Harpsden Wealth Management, has said "investors fundamentally underestimate the impact of commodities on the overall profitability of markets", with implications for portfolio positioning in 2017 and beyond.

He noted the performance of commodities, and the energy sector in particular, has a much greater effect on markets than on the overall economy. "There is a huge impact right across the market spectrum," Brady (pictured) said. Commodities: Buy in January and sell in May? "As commodities and industrials are bigger parts of equity, corporate bond and high yield indices than they are of the overall economy, the impact is even more positive on financial assets." He said the rise in commodity prices throughout 2016 meant he had a maximum weighting to heavily pro-cyclical equities with...