Are US equities a safe investment?

NORTH AMERICA

US equity valuations are the most attractive they have been for decades. But will cooling conditions mean investors are in for a nasty surprise?

After surging from market lows last year, the US equity market has become fixated on the possibility of an economic relapse. A strengthening dollar threatens the translation of overseas profits for US firms and also reduces the attractiveness of US sourced products. Anxiety that started in Greece sovereign debt has quickly spread to a number of countries across Europe. Direct exposure to Greece is limited but the market has become wary of the argument that the problem is small and contained after a similar line of reasoning was used to minimise the risk of sub-prime mortgages in the U...