In the past 6 months, we have been advising our clients to increase weightings towards equities, at the expense of reducing weightings in bonds. We repeatedly have reiterated this call, in the face of many other strategists who have called for a major 7% – 10 % correction for equities since late January 2013.
Several short term technical aspects are showing further evidence that this outperformance for equities might continue, well into the seasonal period of weakness starting in May, “Sell in May & Go Away”, when particularly European Balanced Fund managers are switching from particularly high-yielding equities, which are paying their annual dividends (unlike the US and UK corporates which are paying quarterly dividends) from late February – late June.