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Investment theme du jour: don’t overthink it

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Markets and finance thrive on sounding clever. But over nibbles and wine at a recent event, a couple of professional fund managers admitted their grand investment thesis at the moment is as follows: the market wants to go up. Don’t overthink it.

Yes, it’s bad to talk about “the market” as if it’s a person. No, it’s not a very sophisticated analysis. But it has been a widespread worldview of late, so much so that Goldman Sachs this week said its Risk Appetite Indicator — a measure of enthusiasm for risk across a wide range of asset classes — was close to its highs from 2021, and moving towards the highest levels since 1991.

Such an upbeat mood tends to make market nerds nervous. It smacks of complacency and bakes in extra vulnerability to shocks…

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