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Interest rates continue to bump along near historical lows. Given the asymmetric risk/reward of holding bonds with extraordinarily low yields, some investors have been reconsidering their holdings. Investors worried about rising interest rates have several options (among them, shortening duration and using derivatives), but none are without opportunity costs and implementation challenges.

We anticipate a period of market consolidation leading up to, and including, the summer and would not be surprised to see more elevated levels of volatility. However, over the longer term we see risk assets continuing to be supported by valuations and abundant liquidity, although tail risks to growth from global fiscal policy remain.

Deutsche Bank is still optimistic on stocks, especially those with a history of growing dividends. In fact, the average corporate dividend yield is actually higher than the yield on 10-year U.S. Treasuries, and that alone should enable equities to outperform bonds. Specifically, they are skewing their portfolios toward the U.S. and emerging markets, while underweighting Europe due to the serious issues it faces.

Returning risk appetite in combination with currently oversold equity and commodity markets could end up bringing a strong relief rally. This rather positive but still realistic scenario should put long short equity and emerging market funds (directional strategies) in the best position to outperform other strategies. Managed futures should perform the worst under this assumption, mainly because the deterioration in technical indicators recently forced mid- to long-term trend followers in particular to open net-short positions.

It appears that uncertainty and volatility are going to be riding with us for a while. There are big risks, to be sure, but big opportunities as well, and the key is to have capital available to capture those opportunities, which means that you have to avoid meaningful losses during the really rough times. It will take prudence and commitment to emerge from this journey safely and securely.

Rockefeller Capital Partners Investment Research Analyst Jessye M. Ball reports on the views of Asian hedge fund managers after a recent trip to the region.

We remain in a cyclical bull market for equities. As has been the case in recent weeks, the European situation will be a periodic negative for U.S. investors. The risk of it turning into a 2008 Lehman-style, global contagion, however, is relatively low. Nevertheless, one chief investment officer is closely watching systemic risk indicators for any such signs.

Risk assets are likely to stay weak while uncertainty persists. Investment committee members see this gradually creating a buying opportunity because, whatever the outcome for Greece, they believe the ECB will use overwhelming force to protect all other Euro countries, allowing markets to recover.

The sluggish pace of growth on a worldwide basis coupled with heightened international geopolitical risk leaves the U.S. economy more susceptible to exogenous shocks. Though the probability of the U.S. slipping back into recession has fallen, Fiduciary Trust remains cautious on economic growth going forward.