The hidden concentration risk is that a large ecosystem depends on the spending decisions of a few CEOs
FOUR years of double-digit equity returns can do strange things to investors. Risk starts to feel theoretical; every dip becomes a buying opportunity; and a 20 per cent return from Nvidia somehow looks disappointing.
That is usually when it pays to become slightly less brave.
After staying overweight on equities for a full year, we recently moved to neutral the day after the US Federal Reserve hiked interest rates.