His bearish views on property are one of the reasons Brookes’ asset allocation outlook for 2016 is ‘unashamedly similar’ to how he has been positioned in 2015, he said.
Alternatives Brookes favours ahead of property for 2016 are absolute equity and absolute macro, as has been the case this year.
In equities Japan and Europe continue to remain a significant way behind the US and UK in their recovery, meaning they remain favoured going into next year Brookes said.
He remains negative on emerging markets and US equities in particular, partly because he expects dollar strength to persist over the coming year.
Well known for having a bearish outlook on bonds recently, Brookes’ thoughts on 2016 are not much different. If anything his concern over the prospects for fixed income has grown.
Brookes said the ‘delusion of liquidity is underappreciated’ and quoted Charles Himmelberg of Goldman Sachs in saying ‘the tide has gone out’.
