The chief investment officer for Seven Investment Management said there were several possible “drivers” behind current market optimism, many of which were based on improvements to the US economy.
He pointed to US dollar strength and the recovery in US housing, as well as the development of shale oil and gas supplies in the US, saying that the latter “has shown that the world’s largest economy can reinvent itself”.
Mr Darbyshire said investors were also noticing a general reduction in the volatility of equities, which could signify a return to the markets over the coming months.
He said: “Equities have displaced corporate bonds as the best source of risk-adjusted return. Asset allocators have to take notice.
Mr Darbyshire added that further momentum could come from companies “rediscovering” capital expenditure, boosting economic growth, from policies – if growth overcomes austerity – and from improvements in emerging market economic growth.
ADVISER VIEW
Alan Turton of Rowley Turton in Leicester said: “I would agree that developments in the US have contributed to the market optimism. The optimism is likely to continue, but may be hindered by periods of pessimism, which will peter out.”
