Last edited: Oct 9, 2018 at 10:44 PM An intriguing article which appeared in today's Business Insider: MORGAN STANLEY: The stock market has reached a 'tipping point' - and the market's most beloved companies could be hit hardest Note: This is the Morgan Stanley equities team, which AFAIK invest on behalf of the company. Morgan Stanley Wealth Management, which advises a string of wealthy retail clients, already recommended taking profits in the consumer discretionary sector last month. Like it or loathe it, the job of these analysts is to anticipate market cycles and evade the pain if they can. (Though I know many here object to this on a philosophical or metaphysical basis. Which is fine, we all have our point of view.) My main problem with this article is that they don't mention the specific relationship between rising interest rates and the subsequent tightening of the free flow of discretionary income which tech-gadget and other luxury-item companies rely on for their business model. Anecdotal data and statistical data (on low levels of savings and record-high levels of consumer debt) tell us that people are borrowing money in order to buy things like cars and smartphones. Will people still do this as borrowing becomes more expensive? A liquidity crunch would pulverise the markets in a heart-beat. But even a modest decrease of borrow-and-spend behaviour could just lead to a gradual downturn in certain sectors. They could peter out over a number of years. Morgan Stanley's choices for a defensive portfolio are interesting. I'm contemplating food commodity stocks at their cyclical lows (coffee, sugar, corn) and, more sceptically, precious metals stocks (gold, silver). What do others here think - both of Morgan Stanley's reasoning and the best prospects for capital preservation within the markets?