Last week Neal Foundly set out his slightly pessimistic view on equities. This week Mike Deverell responds.

The art of debate and discussion is alive and well at Equilibrium Asset Management. When it comes to decisions about investments, no-one has the perfect crystal ball and thus all worthy contributors are welcome.

We are often asked our views on funds, asset classes or regions we don’t invest in, have we considered them and why have they not made the cut? Often it is on the back of strong performance and/or heavy media coverage.

In a world of rising asset class correlation, diversification is more important in portfolio construction than ever. This is especially true if markets were to dip or we entered into a bear market period. Asset prices have generally been pushed up over the past few years through a combination of quantitative easing (by any name) and near zero interest rates.