Despite seeing the longest US stock bull market in history this year, many advisers are now bracing themselves for a downturn.
The US stock market marked its record in August for the longest upward rally, when it made it to 3,543 days without a fall of 20 per cent or more.
According to Thesis Asset Management director Lawrence Cook, advisers have started to look away from assets that have been a ‘safe’ bet during the last 18 months.
Cook says: “Portfolios that have performed particularly well were focused on long gilts and had a heavy weighting towards equities and particularly in the US.”
The US Treasury bond 10-year yield is now 3 per cent, double the figure from mid-2016, meanwhile UK gilts are yielding 1.25 per cent.
Cook adds: “We had number of advisers who recognised those assets had a really good run, and they would like to take a more cautious risk towards managing risk in the future.”
“Rather counter-intuitively, they moved from solutions that have been doing really well. They believe that because of where the markets are, we are entering a period of risk in which we could be in for a much higher level of volatility.”