At the start of the year, I wondered if it was time to reassess the generally bullish view of markets that I had held since the last quarter of 2008. Faced with some increasingly widely-held concerns about the outlook, I began to question whether I should temper my optimism.
The short answer was, and remains, no. Valuations are not materially higher than their long-term trend and the behaviour of investors is not as aggressive as it tends to be at market tops. Flows into equities are not excessive and many investors continue to scale the wall of worry which is typical of a bull market.
My view is coloured by a continuing conviction about the case for investing in China, where I have been living for almost a year. China is not just any emerging market. It is the dominant economy in Asia and one of the two most important in the world. This will continue to have important repercussions for investors.