Stocks and commodities made an astounding comeback in 2009 after a disastrous 2008. Emerging markets and Asia ex-Japan equities posted their best performance last year — with strong 67.7 per cent and 61.7 per cent gains respectively while the MSCI World Equities Index managed only a 23.8 per cent gain.

Unfortunately, equity performance in January 2010 cast a wet blanket over expectations. However the market picked up a positive momentum later in the quarter.

Economic data to date have been encouraging. Many nations, such as China and Singapore, have reported strong economic growth and even lag indicators — such as unemployment rate — have been showing encouraging signs of recovery globally.

We continue to hold our view that risky assets such as equities and commodities will continue to do well in 2010 as more news of economic recovery and strong corporate performance present themselves.

We also believe that the current low interest rate in most parts of the world will come to an end in the later part of the year as more signs of economic recovery turn up. We are therefore bearish on bonds this year.

We suggest investors shift the weight of their portfolios towards equities and commodities and away from bonds. ETFs are extremely helpful when constructing investment portfolios and should be used as the starting point of any portfolio construction.

The global economic recovery however fuels the fear of inflation.

With loose monetary and generous fiscal policies present in many parts of the world, many are now concerned that inflationary pressures will start to force governments to take early evasive action to prevent inflation from becoming a full blown issue. However, others are of the view that the shaky world economy may not be ready for a withdrawal of fiscal policies and a tightening of monetary policy.

We suggest investors shift the weight of their portfolios towards equities and commodities and away from bonds. ETFs are extremely helpful when constructing investment portfolios and should be used as the starting point of any portfolio construction.

The global economic recovery however fuels the fear of inflation.

With loose monetary and generous fiscal policies present in many parts of the world, many are now concerned that inflationary pressures will start to force governments to take early evasive action to prevent inflation from becoming a full blown issue. However, others are of the view that the shaky world economy may not be ready for a withdrawal of fiscal policies and a tightening of monetary policy.