Macro survey shows mixed concerns

The Barclay's macro survey showed that the biggest concern for investors is geopolitical risk, but there is the expectation that growth will surprise on the upside. Commodities and emerging market equities are expected to be the best assets to hold over the near-term. There is also the belief that the low volatility environment caused by easing monetary policies will start to turn by the end of the year.

This is a strange combination of fear and optimism. Fear about geopolitical risk and higher volatility but the idea that holding risky assets is the right play. This is another variation of a momentum hope strategy. Hold risky assets which have been performing better until a shock causes you to bail. My view is that when markets are tilted to overvalue any negative shock is greater reason to unload assets. A correction is more likely when expectations are for upward surprises that never come for low risk overvalued assets.