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Heads I win, tails you lose

The story goes that Brian Clough, a famous English football manager, owned a two-headed coin that he used when his team tossed for the first choice of changing rooms at Wembley stadium ahead of cup finals. He would always choose the "home" facilities – otherwise known as the lucky changing rooms – and invariably go on to win the match.

The football fans among you will have to forgive a degree of poetic license in recounting this story, but many investors over this last quarter will have felt they have been in possession of a two-headed coin. The price of risk assets has risen on good news days and also climbed higher on bad news days – a truly win/win environment for those with cash invested in markets. It is clear this wave of optimism has been driven by the "do whatever it takes" rhetoric, and the subsequent policy follow-through, delivered by the European Central Bank (ECB) and the US Federal Reserve (the Fed). Improving data surrounding the US housing market and a raft of solid, if unspectacular, earnings numbers has provided further impetus to rising prices, with valuations – outside of core developed-country government bonds – generally supportive too.

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