Does the adage 'Sell in May and go away' still apply?
Shares are choppy: central banks around the world are reverting to a cycle of rate rises, bonds have been hit by the euro-zone crisis, and commodities have seen serial sell-offs.
Our experts look ahead.
Emil Wolter (head of regional strategy, Asian equities, RBS) is optimistic. While a rally in 'ultra-safe' government bonds has led to suggestions that economic growth is being replaced by another recession, he says the most reliable of recession predictors - the yield curve - suggests that we are only halfway through the economic cycle.
He says this should support equity, currently forecast to grow 14 per cent - in line with nominal gross domestic product growth - this year.
While there are concerns that that liquidity conditions are peaking as the US Fed completes its programme of quantitative easing, Wolter says global money supply indicators are trending higher while credit growth recovers.
'In Asia, banks are lending rapidly, and foreign exchange reserves are exploding upwards. Finally, the pricing of risky assets such as junk bonds suggests no shortage of easy cash,' he says.
He adds that Asian equities now yield 5 per cent more than regional bonds, which he views as a buy signal.
Yonghao Pu (chief investment strategist, Asia Pacific, UBS Wealth Management) believes 'Sell in May and go away' is too simplistic. He notes, for example, that 2007 and 2009 delivered good returns from May to July.
He sees turbulence in Asia in May-July this year, however, given mainland inflation and the Greek debt crisis. 'However, market setbacks should be viewed as corrections, not the start of a bear market,' Pu says. 'The US recovery is on track, and both US corporations and consumers are in good shape. Asia's rate tightening won't derail its recovery.'
Pu sees buying opportunities. For example, as the Fed unwinds quantitative easing, he expects the US dollar to climb, which he views as an opportunity to buy Singapore dollars, yuan and Korean won.
Erwin Sanft (deputy head of Asian equities research, BNP Paribas) foresees a summer slowdown. 'Economic growth in China is on the slide, and with a third round of quantitative easing in the US looking unlikely, a quiet summer beckons,' he says.
He adds that valuations are attractive, however, and counsels investors to look for cheap stocks. 'Both the H-share and A-share markets have derated significantly over the past two years, and even once-hot sectors, such as the consumer sector, are trading on attractive multiples these days,' Sanft says.
Catherine Cheung (head of investment strategy and research, Citibank Global Consumer Group) says historical data argues for staying in markets. She points to the MSCI EM Index as an example.
From 2004 to 2010, the index rallied in the second half of each calendar year except 2008. The rally averaged between 20 per cent and 30 per cent, Cheung says.
'Against this backdrop and the fact that equities were again sold off last month, investors may consider buying on dips, positioning to capture a potential rally in the second half of the year,' she says, adding that she likes Chinese and Brazilian equities in particular.
Chinese equities were down 7 per cent over the course of last month on concerns that inflation will accelerate because of drought, and that economic growth will slow, she says.
However, she expects that Chinese stocks to rally in the third quarter as inflation pressures ease.
Cheung also notes that Standard & Poor's has recently revised upwards the outlook on Brazil's credit rating to positive.