Markets remain calm despite rising risks, from new U.S. tariff threats on India to hawkish central banks and geopolitical tensions. Barry Jones of Isio warns that this complacency is dangerous, urging investors to take profits, prepare for market dislocations, and address portfolio constraints before volatility returns.
Barry Jones, Head of Investment Strategy at Isio, comments: “Markets are pricing perfection. Volatility is low, spreads are tight, and risk assets continue to toil higher, all while the global backdrop becomes increasingly unstable. We’ve seen tariff threats resurface this week, central bank signals become more hawkish, and geopolitical tension intensify, yet markets barely flinch. It’s not that the risks aren’t real – it’s that no one seems willing to price them in.
That complacency is dangerous. Trustees can’t afford to anchor their thinking to a market that’s numb to reality. If a trigger does arrive, whether inflation reignites, politics destabilise central banks, or global shocks hit confidence, the unwinding could be sharp, and the window to act very narrow.
We’re talking to schemes about three priorities. First, take profits where assets look stretched and reinvest into areas where the risk-reward dynamic is more attractive. Second, make space in portfolios for dislocation strategies, vehicles that can move quickly and buy into markets when others are forced to sell. Third, get ahead of structural constraints. Illiquid holdings are still blocking some schemes from taking advantage of market opportunities or moving towards endgame.
This isn’t about fear, it’s about preparation. If markets aren’t reacting to news, that doesn’t mean trustees should do the same. There’s still time to act but being intentional now will make all the difference if the calm breaks.”
