As investors push equities and other risk assets to multi-year highs, one question being raised by analysts is whether upbeat markets are becoming too complacent.
Lim Say Boon, chief investment officer at DBS Private Bank in Singapore, says while markets are probably not pricing in long-term structural problems such as huge debt levels in many major economies, the sharp and swift move into stocks this year do not reflect complacency.
Instead, the rally in risk assets shows investors are finally taking a step back from high levels of fear and anxiety that ruled last year. In the past three months, shares in the U.S. and Asia have rallied more than 6 percent, while stocks in Europe have gained 4 percent, as fears about U.S. fiscal worries subside and economic data paint a brighter outlook for global growth.
It's a sharp contrast to the middle of last year, when a surge in Spanish government bonds yields and worries about a break-up of the euro zone triggered a sharp fall in the euro and equity markets globally.