Trade talks are the one concern facing stock markets at the moment and, if the talks go awry, there could be a summer of volatility ahead on markets.

That's according to Peter Brown of Baggot Investment Partners and the Institute of Investing and Financial Trading.

He was commenting on the selloff on global markets yesterday, prompted by the threat from Donald Trump to raise tariffs on $200 billion of Chinese imports from 10% to 25% later this week.

"Financial markets are in a benign and good place. Central banks are dovish, interest rates are low, which is good for stocks. The one worry is trade talks.

"Trump is not happy with the pace of the talks. There's a delegation coming over from China this week to try and accelerate the talks. The market looks on [Trump's threat] as a bluff, but the talks are very important."

A consensus was building that talks between the US and China were progressing well and that a deal was close.

Peter Brown said the Trump tweets were likely an attempt to nudge a trade deal over the line, but that it could backfire.

"Trade wars are terrible. They're like a punch-up in a bar. It starts very small and then it escalates into total mayhem and everyone is involved. They don't benefit anyone. Nobody ever wins. If this escalates, then the stocks markets are in trouble.

He said the suggestion that stock markets are simply over-valued at the moment was certainly true in the case of US stocks.

"European stocks are half the price of American stocks. The US has had a hot run. The dollar is over-valued, stocks are over-indebted."

However, he said stock markets remain the only place to invest for yield at the moment.

"Last year we saw US bond yields go to 3% and bonds became an alternative, but then growth in the US hit a wall and the yield fell and traders roared back into the markets for the first five months of this year.

Peter Brown said he wouldn't encourage people to be overly active with their pensions and investments but that sometimes a re-balancing was needed.

"We've had nine years of growth with US markets up 335%. The dollar has been roaring. Now is the time to actively engage and do something different for the next few years."