Welcome to the Consolidation Phase
We have already left the first half of the year behind us and with it some of the trends in financial markets that have been with us since last year. The recovery phase is over and we are now in a consolidation period. Risk assets remain well supported and interest rates are also likely to rise again after a pause. We are largely sticking to our positioning with broad diversification and small active bets. It is difficult to predict how long this phase will last. However, it seems clear that portfolio returns are likely to be lower than during the recovery phase. In this phase, investors should not go too far out on a limb, because they will no longer be compensated accordingly for higher risk.