Talking Point  

Advisers weigh up risks to rising US stocks

Advisers weigh up risks to rising US stocks

Some 47 per cent of advisers think nothing will derail the current bull market in US equities and it will continue, according to the latest FTAdviser Talking Point poll.

The poll which asked, what do clients invested in US equities think will derail the bull market, showed 24 per cent believed potential trade wars, including political risk, would conclude its run.

Anthony Rayner, manager of Miton’s multi-asset fund range, said trade wars and political issues do pose a risk to the US stock market’s derailment. 

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"Politics is a different ball game. Markets have always struggled to price political risk and we do too," he said. 

He noted: "There’s a fairly full pipeline of events coming up, including US midterms, Italian budget proposals, Brexit negotiations and a Brazilian election."

The bull market in US stocks has lasted for more than nine years and five months, now making it the longest running bull in history, according to Schroders. 

A bull market is defined as an extensive period of a rising market, which does not fall more than 20 per cent from its peak during the period, and often leads to speculation as to when it will end and what will end it, the asset manager explained.

The poll results showed 19 per cent of advisers thought central bank action could conclude the record-breaking bull, while a mere 10 per cent said tension in emerging markets could play a part in the end of the bull market.

But Joshua Gerstler, financial adviser and company director of The Orchard Practice, believes the short-term outlook for US equities was unlikely to affect clients’ investment allocation.

He said: "I work with my clients in planning for the next 80 years so I encourage them to ignore the market noise."

Mr Gerstler added: "The US equity market will go up and it will go down, any short-term fluctuations will not have a significant impact in the grand scheme of things."

Arun Mohammed is an intern with Financial Adviser