Europe still a big unknown
Europe remains a key risk to investment markets as they seek to move beyond the global financial crisis, according to Vanguard European economic specialist Peter Westaway.
Addressing the SMSF Professionals' Association of Australia conference (SPAA) in Melbourne, Westaway said that while a number of risk factors were playing out on markets, Europe represented a key risk.
He said the big macro risks were the unconventional policies pursued to counter the impacts of GFC; the continuing uncertainty in US; the possibility of a hard landing in China; and Europe and the pace of structural reform.
Westaway said he believed investors needed to be conscious of the fact that European recovery was likely to be both lumpy and slow, with the possibility of further set-backs.
However he said it was too early to rule out a "malign scenario" involving another major set-back.
Westaway said the appropriate approach was therefore for investors to maintain well-diversified portfolios amid continuing uncertainty.
"The simple point is that simple strategies have done better," he said.
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