Warning signs

The length of a cycle does not necessarily condemn it. Indeed, the recent trend in developed markets has been towards lengthier cycles and generally lower macroeconomic volatility (GFC aside). But, as a component in a broader basket of signals, concerns about the length of the advance certainly have validity. We think the evidence is sufficient to warrant maintaining downside protection.  The US equity market in particular is vulnerable at current valuation levels. The story for being long gold and bonds remains compelling.

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