Weekly Digest – A Weizmann once said
In 1998, researchers at the Weizmann Institute of Science in Rehovot, Israel, showed that electrons passing through a membrane behave differently when being observed. In a similar way, investors looking for the next bear market are affecting its timing. Bear markets are typically preceded by a period of irrational exuberance, which seems a quantum leap from where the collective mood in markets is today. Traditional indicators such as the shape of the yield curve and the level of equity market valuations have proved ineffective thus far in this latest cycle; little surprise perhaps given the changing rules of the game, with risk free rates (here thinking about US Treasury Inflation Protected Securities) having declined to zero over the past 23 years. Instead of adhering to any single rule of thumb, we have preferred to stay invested on behalf of our investors and broadly diversified, to good effect in 2019.