If you think developed markets are in a low growth environment for some time, invest accordingly and take a view on the growth outlook, says Stewart Richardson, RMG Wealth Management.
For Richardson that means equity and cyclical commodity markets are overvalued.
“QE2 (the second round of quantitative easing) boosted these markets from September last year, and with stimulus set to end these markets are vulnerable to a correction assuming no QE3,” he told CNBC.
The big-picture strategy is to be positioned a bit short equity markets, and long high quality assets that generate strong cash flows.
So Richardson is long UK gilts, long dollar/sterling, and short European banks. He has taken down some of his short exposure recently because he thinks there could be a bounce from the short term oversold conditions.
"We covered our short silver trade and part of our European equity trade and long $/£ trade,” he said.
He likes the gilt story because he thinks the market is mispricing the pace of tightening in the UK and rates will stay lower for longer.
Elsewhere, Richardson can only get excited about one sector of the commodity trade: he is looking to buy grains.
This is a weather-related trade. He thinks conditions are having an impact on planting and growing in Europe, the US and possibly also China.
"This at a time when global demand continues to grow each year, and year end stocks are quite tight," Richardson said.