Markets have had a ‘delicate’ start to the year and headlines such as 'Sell everything’ appearing on Investment Week do nothing to soothe nerves. http://www.investmentweek.co.uk

My knee jerk reaction was that the current situation is a great deal away from where it was in 2008. The situation in the global banking sector is very different and, while memories in stock markets are pitifully short, they are not that short.

I don't know the precise rationale for RBS to rush into safe assets. The general concern weighing on investors surrounds the explosive growth in Chinese debt since the crisis. Much of this debt does not sit on the government's books but on the books of the state owned enterprises (SOEs). If these bonds begin to sour there will be repercussions across the country. The Chinese financial markets are still largely closed and I doubt that many foreign investors will have direct exposure to these debts. I'm guessing that the local banks and WMPs have the majority of the exposure. If this does all go wrong, expect to hear much more about Chinese WMPs (wealth management products)!

China remains very opaque. In the worst case, this will be hopefully just a localised problem. Contagion across financial markets (as happened in 2008) seems to be a remote threat though it could be that a sneeze in the Chinese economy will give the rest of the world flu.

I'm no expert on China though I remain more optimistic than the pessimists. Yes, there are issues but the shift away from industrialisation towards services may result in a number of economic indicators failing to reflect growth in the new branches of the economy.

I don't know the guys at RBS (I'm guessing that this came from their bond team). I would be far more concerned if we were hearing similar levels of disquiet from the managers who we respect in the region.

Our portfolios are largely fully invested but we remain biased towards more defensive equities. As a result, they have held up relatively well during the periodic sell offs and have participated strongly in any market advance. Frankly trying to read the economic runes is harder than ever and our preferred strategy is to identify pockets of relative stability in a sea of uncertainty.