Investors should 'mind the gap'

Global equity sell-off may be precursor to disappointing year

In some Underground stations in London, you are repeatedly reminded to "Mind the Gap" as you enter and exit the train. The aim is to reduce injuries occasioned by a structural anomaly that results in a large gap between the platforms and the trains.

Judging from market valuations, I sense quite a gap between consensus market expectations and key political and economic realities, especially in the US. If the gap isn't bridged by the validation of the more optimistic expectations, investors may well find that January's global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks.