A staunch supporter of the bull run in equities says his chief concern at present is that investors don’t stay the course and miss out on the rewards as stocks keep grinding higher.

“The risk today in our opinion is not the risk of a meltdown, it’s more of a risk that equity markets continue to go up and people don’t participate,” said Ash Alankar, head of global asset allocation at Janus Henderson Investors, which oversees about $357 billion. “Central banks are giving you a gift, so take it,” he said in an interview via video conference from Melbourne.

Alankar’s willingness to stick with equities comes as Morgan Stanley strategists cut their global stocks allocation to a five-year low and BlackRock Inc. dialed back its equity risk. Janus Henderson is also optimistic on inflation-protected Treasuries, known as TIPS, expecting U.S. monetary easing to spur price pressures.

Further down the road, looser central bank policy is increasing the chance of an inflationary shock to the economy that will cause equities to slide, said Alankar, suggesting investors should be carefully monitoring any upticks in prices.

“My big worry today is what could put this calm environment at risk is if unexpected inflation hits because central bankers are unnecessarily being too accommodative, particularly in the U.S.,” he said. “It really makes no sense why Powell and the team should cut rates. The conditions just don’t warrant it.”

Alankar, based in Denver, monitors derivatives markets for signals on how and when to invest alongside his strategist colleague, Myron Scholes, a Nobel Prize winner. They monitor options prices across a range of asset classes to determine what the market is currently expecting in terms of upside or downside to each over the next 60 days.

Those signals are flagging the most opportunity in Asia-Pacific equities -- Australia and Japan are the top picks in the developed world, while India and Taiwan stand out among the region’s emerging markets, Alankar said. U.S. equities appear the least attractive globally.

Bloomberg News.