Rathbones' Stick: Back to basics as exuberance takes hold

EQUITIES

When the Beeb's breakfast news programme pumps consumer-oriented reports from "a trading floor in the City", stoking up public enthusiasm for a risky asset class, it is time to worry, and ask "have we not been here before"?

Since the start of the year, we have suggested that tensions within equity markets have presaged a more challenging start to the year, than has ultimately come to pass. Yes, equities are cheap versus other asset classes, short-term economic data have been supportive, and companies are looking mean and lean. However, the long-term stresses and strains in the global economy remain – they are just not in full focus when shares and run-away markets are making headline news. We therefore err on the side of caution. 2012 represented a good 12 months performance-wise, but how much of that re...