11 August 2017

North Korea: A problem not of Trump’s making.

Missile development program slowly shifts the political balance

North Korea’s recent successful test of a missile capable of reaching much of the US mainland is clearly a concern but it is not because such an attack is imminent or likely. The history of military rocket development suggests that it will still be some years before North Korea could be assured of a successful, let alone multiple, strike on the US or even Guam. However, in the event of any attack, the overwhelming superiority of US forces would undoubtedly ensure the destruction of North Korea. Therefore in many respects Trump’s most aggressive comments this week were a statement of the obvious and investors should accordingly not over-react, even as volatility has risen during thin trading over the holiday season.

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27/07/2017
Equity strategy and market outlook - July 2017

In this month’s strategy piece, Alastair George believes that good times to invest are when there are a multitude of ways to win and limited downside. At present, however, the bull case for equities seems to be increasingly based on a single ‘Goldilocks’ scenario contingent on the persistence of high equity valuations, easy monetary policy and low volatility. The path for even adequate returns on equities therefore seems rather narrow at present. This absence of upside, rather than any specific downside trigger is, in his view, sufficient reason to run portfolios at below benchmark risk levels.

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