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In early September equity markets sold off after a US Federal Reserve official suggested interest rates could be increased at the September Fed meeting. Markets recovered later in the month when interest rates went unchanged.

August saw another rise in global equity prices despite increased talk from US Federal Reserve officials that suggest they are looking to raise US interest rates in either September or December.

The “X factors” that had been dominating negative market views – bad debts in the Italian and Chinese banking system, terrorism, political issues and the rise of anti-globalisation – have given way to a “fear of missing out” rally.

We review July conditions and recommend overweight exposure in cash and alternative assets, with underweight positions in fixed interest, property and Australian equities, while keeping neutral exposure to international equities.

It was a difficult month for equities with an initial sell off in early June, following the release of weak jobs growth figures in the United States and another decline later in the month following the UK’s decision to leave the European Union.

Brexit is a significant shift in the geopolitical landscape, with associated uncertainty. Investors will need compensation for this with lower share prices. We believe a 15% global equity sell-off over the next 6-8 weeks is a reasonable base case.

Read more to learn how you could use asset-backed securities in your portfolio

In most of the major economies the outlook remains fragile, as a result of political uncertainty and disappointing earnings results. However recovery in equity prices has continued into April, primarily to the bounce in commodity prices and supportive central banks.

We all want to understand and profit from the latest trends, particularly when it comes to investment opportunities and strategies – but is it worthwhile jumping on the bandwagon? Here we explore the upsides and downsides of investing for or against market trends.