Turning to equity and commercial property markets, which are currently performing very well, it seems to me that they are quite different from the equity boom of the late Nineties and the real estate boom several years later in that they were fuelled by over-optimism and an unhealthy wish to speculate. Today’s investors seem to be much more interested in dividend income and capital preservation. This has driven them into so-called safe havens such as transatlantic technology shares and consumer brands and trophy assets such as buildings in the City and West End of London. Such investors should ask themselves whether it has ever been more risky to play safe. The flight to safety in the property market can be seen in the huge difference in yields available on prime buildings (low) and secondary properties (high yields). Prime properties are considered lower risk and are therefore worth paying up for in a risk-averse world. The reality is, I believe, rather different because the bulk of overall returns comes from income not capital growth: the former is high and stable and the latter volatile and unpredictable.

Similar comments can be made about the equity market: investors have bought investments that they perceive to have low volatility and reliable and predictable growth prospects and the more that such shares go up, the more money that they attract to the point where they are decidedly over-valued. To my mind, it is more important than ever to look for value in the less fashionable sectors of the market that risk-averse investors have over-looked. When the price is right for a building or a share, investors may find that taking on risk is the safest strategy to follow.