Why a bond bear market would not derail equities

Canny investors should have heeded the "clear signal" to buy equities in December, as they are set to rise despite the threat of a bear market in bonds, said Investec's Max King.

In an April strategy outlook, the portfolio manager on Investec’s global asset allocation team said the rally in equities in Q1 took many investors by surprise, although “it is hard to remember a market upturn that was better flagged”. Investec’s asset allocation team has tipped both developed and emerging market equities to trend upwards in the medium term, driven by robust corporate earnings. “Continued earnings growth in 2013 promises further upside next year. However, a short-term market setback is possible, and last year’s down-trend to earnings forecasts could resume. A furth...