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Advisers are moving away from ‘safe bet’ assets

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.”

Can advisers really beat the market downturn?

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 counterintuitively, 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.”

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