Peter Elston, chief investment officer at Seneca Investment Managers, explains why his funds now hold no US equities.

The last two equity bear markets, in 2001/2 and 2008/9, saw rolling three-year returns from global equities at their trough hit -45 percent and -42 percent respectively.

Anticipating such dramatic declines can help add value to portfolios, enabling shifts to more defensive positioning. Markets, however, are notoriously hard to predict, so how can one do this?

The answer is to keep it simple, and to make asset allocation shifts gradually and progressively.

The decision-making ...