Riding Asia's 'Great Moderation' era in 2015
High-quality rather than high growth could spell a prolonged period for harvesting equity returns
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SINCE the beginning of 2014, I have been alerting investors to the emergence of the "Great Moderation" dynamic in Asia. This refers to "The Great Moderation", a sustained period of macroeconomic growth and reduced volatility that began in the 1980s in the US, and which has provided an important backdrop to the strong performance of US equities over the past three decades.
We see Asia's economic slowdown developing into a period of sustained but moderately high growth, characterised by sensible economic policies and responsive corporate behaviour that could spell a prolonged period for harvesting equity returns.
Focusing on the quality rather than pace of growth
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