Gareth Lewis, CIO at Tilney Bestinvest, believes the recent events in China and Greece as well as the looming US rate hike will make people think twice about whether or not they want to hold risk assets.
But, stops short of the coyote metaphor, saying he remains unsure of just whether or not this will be enough to truly threaten the market’s current sanguine attitude.
He does, however, believe there is a certain level of complacency that is the result of quantitative easing and the view that if things go wrong, central banks will inevitably bail you out.
“You want investors to be cognisant of the risks that markets can go up and down, especially given how low liquidity levels are. So, periodic warning shots are good. But, there will eventually be an event that threatens that complacency,” he says.
The broader question then is where this leaves markets more generally? Will they take the events in Greece and China largely in their stride, at worst stumbling slightly on the way, or will they look down and suddenly realise that what was holding things up was a lot less substantial than they thought.
